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Mount Carmel School,AN, New Delhi by darKRomeo
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INTERNATIONAL TRADE IN
INDIA
International trade is exchange of capital, goods, and services across international borders or territories. In most countries, it represents a significant share of gross domestic product (GDP). While international trade has been present throughout much of history (see Silk Road, Amber Road), its economic, social, and political importance has been on the rise in recent centuries.
What Is International Trade?
Importance of International Trade
Without international trade, nations would be limited to the goods and services produced within their own borders.
International trade is the backbone of our modern, commercial world, as producers in various nations try to profit from an expanded market, rather than be limited to selling within their own borders. There are many reasons that trade across national borders occurs, including lower production costs in one region versus another, specialized industries, lack or surplus of natural resources and consumer tastes.
Risks in international trade
Buyer insolvency (purchaser cannot pay);Non-acceptance (buyer rejects goods as different from the
agreed upon specifications);Credit risk (allowing the buyer to take possession of goods
prior to payment);Regulatory risk (e.g., a change in rules that prevents the
transaction);Intervention (governmental action to prevent a transaction
being completed);Political risk (change in leadership interfering with transactions
or prices); andWar and other uncontrollable events. In addition, international trade also faces the risk of
unfavorable exchange rate movements
Trade In India Trade and commerce have been the
backbone of the Indian economy right from ancient times. Textiles and spices were the first products to be exported by India. The Indian trade scenario evolved gradually after the country’s independence in 1947. From the 1950s to the late 1980s, the country followed socialist policies, resulting in protectionism and heavy regulations on foreign companies conducting trade with India.
India’s major imports comprise of crude oil machinery, military products, fertilizers, chemicals, gems, antiques and artworks. Imported goods are divided into the following categories:
Freely importable items: For these items, no import license is required. They can be freely imported by an individual or a firm.
Canalized items: These items can only be imported by public sector firms. For example petroleum products fall under this category.
Prohibited items: Items such as unprocessed ivory, animal rennet and tallow fat cannot be exported to India.
India Trade: Imports
India’s Import Performance
India's Import Performance (1999-2000 to 2003-04)
77237
566135158850056
61572
49799
37172
0
10000
20000
30000
40000
50000
60000
70000
80000
90000
1999-2000 2000-01 2001-02 2002-03 2003-04
Years
US$
mill
ion
All Commodities Petroleum crude & products Non-POL items
Indian exports comprise mainly of engineering and textile products, precious stones, petroleum products, jewelry, sugar, steel chemicals, zinc and leather products. Most of the exported goods are exempt from export duties.
India also exports services to several countries, primarily to the US. In fact, India is among the world’s largest exporters of services related to information and communication technology (ICT). It is also the key destination for business process outsourcing (BPO).
India Trade: Exports
India’s Export Performance
India's Export Performance (1999-2000 to 2003-04)
63623
47742
52856
439764414736760
29751
0
10000
20000
30000
40000
50000
60000
70000
1999-2000 2000-01 2001-02 2002-03 2003-04
Years
US$
mill
ion
All Commodities Agricultural & allied productsOres & minerals Manufactured goodsPetroleum & crude products
EXIM BANK
Set up by an act of parliament in September 1981
Wholly owned by Government of India Commenced operations in march,
1982 Established “for providing financial
assistance to exporters and importers, and for functioning as the principal financial institution for coordinating the working of institutions engaged in financing export and import of goods and services with a view to promoting the country’s international trade…”
Where Does India Stand Globally?
International Trade of Select Countries in 2003
Country Exports Imports GDP Trade as % of GDP(US$ bn.) (US$ bn.) (US$ bn.)
Korea 197.6 175.5 605.0 61.7China 438.3 393.6 1446.9 57.5Mexico 165.4 171.0 626.1 53.7Russia 135.9 75.4 433.5 48.7South Africa 38.7 35.0 160.1 46.0Argentina 29.4 13.1 129.7 32.8Brazil 73.1 48.3 492.1 24.7India 57.0 74.3 588.8 22.3Source: Economist Intelligence Unit
India’s share in global merchandise exports: 0.8% (2003)
THANK YOU
Made By:-Shivansh Jagga
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