Foreign trade of India

Foreign trade in India includes all imports and exports to and from India. At the level of the Central Government, trade is administered by the Ministry of Commerce and Industry. Foreign trade accounted for 48.8% of India's GDP in 2018.

History

Even before independence, the Government of India maintained semi-autonomous diplomatic relations. It had colonies (such as the Aden Settlement), who sent and received full missions, and was a founding member of both the League of Nations and the United Nations. After India gained independence from the United Kingdom in 1947, it soon joined the Commonwealth of Nations and strongly supported independence movements in other colonies, like the Indonesian National Revolution. The partition and various territorial disputes, particularly that over Kashmir, would strain its relations with Pakistan for years to come. During the Cold War, India adopted a foreign policy of non-alignment policy itself with any major power bloc. However, India developed close ties with the Soviet Union and received extensive military support from it.

Around 100CE

The Periplus of the Erythraean Sea is a document written by an anonymous sailor from Alexandria around 100 CE, describing trade between countries, including India.

Around 1500

In 1498, Portuguese explorer Vasco da Gama landed in Calicut (modern day Kozhikode in Kerela), and was the first European to ever sail to India. The tremendous profit made during this trip made the Portuguese eager for more trade with India and attracted other European navigators and tradesmen.

Pedro Álvares Cabral left for India in 1501 and established Portuguese trading posts in Calicut and Cochin (modern day Kochi), returning to Portugal in 1501 with pepper, ginger, cinnamon, cardamom, nutmeg, mace, and cloves. The profits made from this trip were substantial.

1991 economic reform

Prior to the 1991 economic liberalisation, India was a closed economy due to the average tariffs exceeding 200 percent and the extensive quantitative restrictions on imports. Foreign investment was strictly restricted to only allow Indian ownership of businesses. Since the liberalisation, India's economy has improved mainly due to increased foreign trade. Reforms in India in the 1990s and 2000s aimed to increase international competitiveness in various sectors, including auto components, telecommunications, software, pharmaceuticals, biotechnology, research and development, and professional services. These reforms included reducing import tariffs, deregulating markets, and lowering taxes, which led to an increase in foreign investment and high economic growth. From 1992 to 2005, foreign investment increased by 316.9%, and India's GDP grew from $266 billion in 1991 to $2.3 trillion in 2018.

Trade in services

As of 2023, India is the seventh largest exporter of commercial services in the world, accounting for 4.6% of global trade in services. India's service exports grew by 27%. In September, India's prominent services industry experienced an acceleration in growth, buoyed by robust demand in the sector. A recent survey also indicated that businesses displayed the highest level of optimism in over nine years. According to S&P Global's India services purchasing managers' index, there was an increase to 61.0 last month from August's figure of 60.1. This surpassed projections in a Reuters poll, which had anticipated a slight dip to 59.5.

The spectrum of India's services exports encompasses a diverse array of sectors, ranging from information technology (IT) to the provision of medical services by professionals overseas. The RBI, while not providing monthly disaggregated data on services exports, periodically releases a classification of such exports as part of its quarterly balance of payment data. This classification encompasses transport, travel, construction, insurance and pensions, financial services, telecommunications, computer and information services, as well as personal, cultural, recreational services, among other business services.

Within India's services export landscape, software exports retain a dominant position. However, noteworthy is the recent surge in "other business services" exports, which constituted 24 percent of the total services exports in the initial nine months (April-December) of FY23. This marks a notable increase from the 19 percent reported in FY14. This category encompasses a range of services including legal services, accounting, auditing, book-keeping, tax consultancy services, management consulting, managerial and public relations services, as well as advertising, market research, and public opinion polling services.

Exports and imports

India exports approximately 7500 commodities to about 190 countries, and imports around 6000 commodities from 140 countries.

Pharmaceutical industry

Oil and gas industry

Diamond Processing

Automotive Industry

Trade statistics

Summary table of recent India foreign trade (in billion $):

Trading partners of India

See also

• Economy of India
• Foreign relations of India
• Remittances to India
• Business process outsourcing to India
• List of exports of India
• List of Indian states and union territories by exports
• List of largest trading partners of India
• Indian diaspora
• Indianisation
• Directorate General of Foreign Trade (DGFT)
• Merchandise Export from India Scheme
• Make in India
• India Inc.
• Medical tourism in India
• Electronics and semiconductor manufacturing industry in India

References

External links

• Directorate General of Foreign Trade
• Major Problems Hindering Indias Export Growth
• India Exports and Imports