CHANGES IN COMPOSITION AND DESTINATION OF EXPORTS & THE EFFECT OF GLOBALIZATION ON INDIA’S EXPORTS

PRESENTED BY :

• SAYAN BOSE.• DIVYA AGARWAL.• PREETI DALMIA.• SUJOY

CHAKRABORTY.• DEEP NANDY.• DEBRAJ SAMANTA.• RAHUL SURANA

INTRODUCTION The globalization of 1990s were undertaken in

many ways such as: devaluation of rupee dismantling import license system full convertibility on trade account fiscal retrenchment and credit squeeze abolition of export subsidies introduction of import entitlement scheme for

exporters unification of the exchange rates, removal of the quantitative restrictions, massive reduction in the tariff rates and protection rates, easing the restrictions on foreign investments.

IMPACT OF GLOBALIZATIONThe major benefits that the country has beenreceived during this globalization of 1990s are asfollows: accelerated rate of economic growth trade openness, capital flows low inflation stable current account balance of payments reduction of poverty, etc.

GLOBALIZATIONS IMPACT ON EXPORT• The amount of exports has been increased from a low of

USD$ 17865 million in 1991 to a high of USD$ 182631 million in 2008 and it is about ten-fold increase in the past 18 years

• There are also considerable variation in the annual growth rates of exports. While the percentage change of exports varied from a low 3.76 % in 1991 to a high of 30% in 2003

• India’s export and its growth is comparatively low in contrast to imports. Hence, trade balance is negative and has been increasing over the years, both in absolute term and in relation to total trade.

CONTINUED……• The amounts of exports as a percentage of amounts of

imports have been declined from 92.0% in 1991-92 to 57.7% in 2008.

• This indicates that the flow of imports is much higher in contrast to flows of exports in the country during the globalization era.

• This leads to overall increase in trade in the economy.

MAJOR PRODUCTS

PRIMARY • (A)Agriculture and allied

products

Tea ,Coffee ,Rice ,Wheat, Cotton

• (B)Ores and Minerals

Iron ore & Mica

SECONDARY•  (A) Leather products• (B)Engineering goods• Iron&Steel,Electronic goods• (C)Gems and jewellery• (D)Handicrafts • (E)Textile and Textile products

Cotton yarn, Woolen yarn,Jute,Carpets

• (F)Petroleum Products• (E)Chemical Products• Plastic,Rubber,Cosmetics

 

EXPORT SINCE 1994-95 TILL 2008-09

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PRIMARY

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Now let us have a look at the contribution of primary products i.e, agricultural and ores and minerals.This shows a steady rise since liberalization policy was implemented. (it rose from 13269.4 Rs.crore in 1994-95 to 116525.9 Rs core in 2008-09).

SECONDARYIt includes sectors like leather, chemicals, engineering products, textile, gems and jewellery & handicraft items. This sector has shown a rise from 64067.1 Rs crore in 1994-95 to 566402.2 Rs.crore in 2008-09

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PETROLEUM PRODUCTS

This sector was contributing very less to the share of export of INDIA .It was 1309 Rs.crore in 1994-95 till 1010.6 RS.crore in2001-02,since then it has also started playing as a major player and in 2008-09 its share rose up to 123397.9

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OTHERS There has been rise in other fields share in export of our country since 1994-95.in 2008-09 it contributed 34428.9 RS.crore.

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A STUDY ON AGRICULTURE ,TEXTILE,TEA, MARINE PRODUCTS,LEATHER &GEMS AND JEWELLERY

TEXTILE

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• Indian textile is in huge demand in foreign markets particularly in countries like USA , UK & other countries of European union.They show a speedy rise since 1994-95 (22348.6 Rs.crore) to 2008-09( 92061.9 Rs.crore )

•  The Indian textile exports have increased from USD 12.45 billion in 2002-03 to USD 17.85 billion in 2005-06 and are estimated at USD 19.24 billion dollars in 2006-07.

• The exports are projected to grow at a rate of 22 per cent between 2007 and 2012 and are targeted to reach USD 55 billion by 2012, Elangovan said.

• Total investment in the textile industry between 2004-07 was around Rs.64,478 crore in India,he said adding it was expected to reach rs.1,50,600 crore by 2012.

AGRICULTURE

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• Since the success of GREEN REVOLUTION our country became self sufficient in food and agricultural products like tea, wheat, rice, cotton, spices etc. are exported to other counties owing to huge demand for them in international market. The following line graph shows the increase in agriculture in export from 1994-95 to 2008-09 (13269.4 RS.crore to 80648.9 RS.core).

TEA EXPORT IN INDIA

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TEA

The percentage share of India’s tea export in total

agricultural exports has declined drastically. During 1981 90 the share was 20.16 per cent, declined to 10.23 per cent during 1991-95 and further declined to 8.11 per cent and 5.78 per cent during 1996-2000 and 2001-04 respectively.

The growth rate of India’s tea export in terms quantity shows that during 1981-90, it is -0.79 per cent per annum and further negative growth rate of 6.86 per cent during 1991-95.

However, during 1995-04 revival is witnessed, during this period growth rate in terms of quantity increased by 1.21 per cent per annum, but in terms of value it is -0.88 per cent per annum during the same period.

MARINE PRODUCTS• During 2009-10 for the first time in the history of Marine

product exports, the export earnings have crossed 2 billion US dollars and Rs.10,000 crore mark. 

• Export has crossed all previous records in quantity , rupee value and US $ terms.  Exports aggregated to 678436 tonnes valued at Rs.10048.53 crore and US Dollar 2132.84 million. 

• Compared to the previous year, this recorded a growth of 12.54% in quantity, 16.74% in rupee earning and 11.75% growth in US $ earnings as shown below:-

• Destinantion: U.S., Japan, China

LEATHER INDUSTRY

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LEATHER India is the third largest leather producer in the world

after China and Italy. The leather industry occupies a place of prominence in

the Indian economy on account of its massive potential for employment, growth, and exports.

The exports of leather and leather products gained momentum during the past two decades. There has been a phenomenal growth in exports from Rs.320 million in the year 1965-66 to Rs.69558 million in 1996-97.

Moreover,the industry employs more than 2.5 million people and was responsible for about US$2.4 billion of exports in 2004-05, much of it to the developed countries.

CONTINUED……………….

The exports from the leather sector constitute 7% of India’s export basket.

Destinantion:Gemany,UKFrance,Spain,Russia,Portugal

GEMS & JEWELLERY

• According to our research report “Indian Gems and Jewellery Market Forecast to 2013”, Presently, the country is considered as the major export hub of gems and jewellery to various geographical locations, including the USA(28%), the UAE(15%), and Hong Kong(21%).

• Exports from the industry yield US$ 17.1 billion in 2006-07 against US$ 16.64 billion in 2005-06, reflecting a growth of 26 %.

• While the diamonds accounted for 64 % of the total exports, gold jewelery accounted for 30.47 %, colored gem stones and others accounted for 1.44 % and 1.04 % respectively last year.

PRIMARY VS SECONDARY

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ANALYSIS OF GRAPH

1995: Primary Sector boomed heavily because there was major contribution towards export, products like coffee,rice,wheat,tobacco and sugar played a major role, however Secondary Sector at that time did not contribute much of India’s exports.(Growth percentage of primary sector-48.26% and in secondary sector-23.984%)

1999: We can see that there is a negative growth in the primary sector because of products like tea, coffee, wheat, cotton raw, oil meals, iron ore growth percentage fell drastically while secondary or manufacturing sector boomed tremendously because of products like chemical related products, and mainly engineering goods, textile products, gems and jewelry showed tremendous growth. (Growth percentage in secondary sector 18.666%

ANALYSIS OF GRAPH

2008: Manufacturing sector boomed drastically because of products like engineering goods, chemical products, leather, woolen fabrics,plastics,pharma products, rubber contributed to a great extent etc.while primary sector was affected badly. (Growth percentage of primary sector: 5.048%% and in secondary sector:36.614%)

ANALYSIS OF GRAPH

RECOMENDATION• Ramu S. Deora, president of the Federation of Indian

Export Organisations, said-“The economic integration of India with the rest of the world has resulted in such exponential growth in India’s exports,”and also told that Indian exports were likely to touch the $500 billion-mark by (2014-15.)On sectoral growth in exports, the commerce secretary said that during the April-February period, exports of engineering goods surged 81 percent to $52.7 billion; gems and jewellery, 5.4 percent up at $26.9 billion;

• petroleum oil and lubricants, 34 percent up at $32.9 billion; cotton yarn, 43 percent at $4.9 billion and electronics, 40 percent at $7 billion.Exports of plastic increased 41 percent at $4.1 billion; chemicals, 22 percent at $7.5 billion; leather, 11 percent at $3.3 billion; and marine products, 20 percent at $2.3 billion. So, here by we can substantially state that the impact of globalization is, however, multidimensional.

RECOMENDATION

THAT’S ALL WE HAVE