Indias Export Performance In The Nineties Leaves A Lot To Be

The countrys export performance has been far from satisfactory in the nineties. Valuewise, its share in total world exports is still around 0.5 per cent. The average growth rate of exports and imports during the first five years (1990-91 to 1995-96) of the nineties was 45.4 per cent and 36.3 per cent respectively.

Much of this growth is likely to have been caused by crude oil exports and higher prices rather than the volume of exports.

An attempt has been made here to review the countrys trade relations with major trading partners, i.e., Belgium, Canada, West Germany, France, Iran, Italy, Japan, Saudi Arabia, UAE, UK, the US, and the erstwhile USSR.

 

Together these countries contributed around 56 per cent of the total exports and around 57 per cent of the total imports.

The countrys exports to the UAE during 1990-91 and 1995-96 went up by Rs 3,978 crore while to the US it rose by Rs 13,662 crore. Exports to Japan climbed by Rs 4,375 crore, Belgium Rs 2,485 crore, the UK Rs 4,590 crore, Canada Rs 742 crore, Germany Rs 4,085 crore, Italy Rs 2,399 crore, France Rs 1,721 crore and Saudi Arabia Rs 1,186 crore.

Exports to the erstwhile USSR fell by Rs 1,467 crore during 1995-96 from the level of 1990-91. The US, Japan, Germany, the UK, Hong Kong and the UAE accounted for 47 per cent of total exports in 1995-96 as against 44.1 per cent in 1990-91.

On the other hand, the countrys imports from the erstwhile USSR rose by Rs 1,459 crore, while from the US it climbed by Rs 7,560 crore. Imports from Japan increased by Rs 4,816 crore, Germany by Rs 7,020 crore, Belgium Rs 2,954 crore, Italy Rs 2,463 crore, Saudi Arabia Rs 3,849 crore, UAE Rs 3,509 crore, the UK Rs 3,538 crore and from France Rs 1,497 crore.

The US, Germany, Japan, Saudi Arabia and Kuwait topped the list of nations from where the country sourced its requirements in 1995-96.

Together, these countries contributed 37 per cent of the total imports during the year.

However, in 1990-91 it was the USSR which headed the the list followed by the US, Japan, Germany and the UK. Together they accounted for 54.6 per cent of the total imports during that period.

Among the major trading partners, the largest trade deficit in 1995-96 was recorded in the case of Saudi Arabia, followed by Germany, Switzerland, Australia, Belgium, Malaysia and South Korea. The surplus of Rs 2,707 crore with the USSR in 1990-91 turned into deficits of Rs 209 crore in 1995-96.

On the other hand, deficits of Rs 767 crore and Rs 449 crore with the UK and the US in 1990-91 turned into a surplus of Rs 285 crore and Rs 5,653 crore respectively in 1995-96.

For a country-wise analysis, let us start with the US. While the country had an adverse balance of trade with the US in 1990-91 during 1992-96 it maintained a positive balance of trade.

Major items of exports to the US during 1990-91 to 1995-96 were gems and jewellery, engineering goods, readymade garments, carpets, marine products and leather and leather manufactures.

The US became the largest purchaser of Indian goods in 1995-96. In 1995-96, the value of Indian exports to the US more than tripled compared with that of 1990-91. The growth was due to the increased purchase of traditional Indian goods coupled with an expansion in industrial products exports.

In 1990-91, the USSR was a huge market. They imported tea, coffee, black pepper, spices, tobacco, jute goods and mica from India. Non-traditional export items such as readymade garments, woollen knit-wear and medicines have also found a market in the erstwhile USSR.

Indian imports from the country include machines and equipment, oil and petroleum products, chemicals etc.

In western Europe, the UK continued to be Indias single largest trading partner, followed by Germany, Belgium, Italy and France. Exports to the UK were Rs 6,717 crore in 1995-96 against Rs 2,127 crore in 1990-91. The major items were tea, leather and leather manufactures, gems and jewellery, chemicals and allied products, tobacco and crude oil.

In 1995-96, the countrys exports to the UK accounted for 6.3 per cent of the total exports. Similarly, imports from UK were approximately 5.3 per cent.

Exports to Germany comprised tea, coffee, oil cakes, leather and leather manufactures, gems and jewellery, readymade garments and chemical products. In 1995-96, India exported goods worth Rs 6,634 crore as against Rs 2,549 crore in 1990-91.

Diamond was the main item of trade with Belgium. India buys rough diamonds from Antwerp and sells cut and polished diamonds to that country.

The countrys exports to Belgium rose 197.4 per cent to Rs 3,744 crore in 1995-96 from Rs 1,259 crore in 1990-91.

India trade with Italy trade is quiet insignificant. Italys exports and imports to and from India in 1995-96 was around a mere three per cent each. During 1990-91 and 1995-96, Indias exports and imports to Italy aggregated Rs 3,400 crore and Rs 3,554 crore respectively and the deficit was Rs 154 crore. Leather and leather manufactures and readymade garments are the major items of exports.

India imports light and medium oil, non-electrical and agricultural machinery and chemical and chemical products from Italy.

Major items of exports to France are castor oil, leather and leather manufactures, readymade garments and gems and jewellery. In 1995-96, goods worth Rs 2,497 crore was exported against Rs 766 crore in 1990-91. Imports stood at Rs 2,801 crore in 1995-96.

Among the OPEC members, Saudi Arabia continued to be the principal exporter to the country during 1990-91 and 1995-96. Iran is also another important supplier of oil.

Indias balance of trade with Saudi Arabia has always been negative. The trade deficit increased from Rs 2,481 crore in 1990-91 to Rs 5,144 crore in 1995-96, primarily due to the heavy import of petroleum and petroleum products. The main items of exports are rice, oil meals, chemicals and chemical products and readymade garments.

The countrys exports to Iran have been rising of late. During 1995-96, Iran accounted for 1.6 per cent of the countrys imports and 0.5 per cent of exports. India had an adverse balance of trade with Iran throughout the period under study.

India exports tea, oil meals and iron ore while imports constitute petroleum and allied products.

In North America, after the US, Canada is the countrys largest trade partner. Trade with Canada rose from Rs 840 crore in 1990-91 to Rs 2,274 crore in 1995-96, leaving an adverse balance for the country.

Exports rose to Rs 1,023 crore in 1995-96 from Rs 281 crore in 1990-91. Major items of exports are leather and leather manufactures, rice, chemicals and allied products, cotton yarn, fabrics, readymade garments and carpets. Imports from Canada include chemicals, newsprint, engineering goods, wood pulp, rapeseed oil and food and beverages.

The two-way trade between India and Japan increased to Rs 15,475 crore in 1995-96 from Rs 6,284 crore in 1990-91. Exports showed a significant rise, touching Rs 7,417 crore in 1995-96 from Rs 3,039 crore in 1990-91. Imports climbed to Rs 8,061 crore in 1995-96 from Rs 3,245 crore.

Japans share in the total exports and imports in 1995-96 was 6.9 per cent and 6.6 per cent respectively. That countrys share in the total exports to India has declined significantly from the 9.3 per cent in 1990-91. Similarly imports too dipped from 7.5 per cent.

The main exports items were iron ore, leather and leather manufactures, gems and jewellery, marine products, readymade garments and jute goods.

Indias trade with the US, the UK, Hong Kong, Japan and the UAE has been encouraging but is has lost ground in the erstwhile USSR, Australia, Belgium, France and Iran.

A significant achievement during the period was the declining trend seen with regards to imports from Iran and Saudi Arabia. Hopes are that India might be able to reduce imports further in future.