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India's Foreign Trade in Goods

India accounts for a small share in world trade, its exports and imports Rs. 606 crores in 1950-51 which increased to Rs. 2,93,367 crores in 2003-04, representing an increase of over 480 times over the last five decades or so (see Table 11.2). The country's imports too show a similarly phenomenal increase. Total imports which were Rs. 608 crores in 1950-51 raised to Rs. 3,59,108 crores in 2003-04, thus recording a growth of about 590 times during the same period. Compostion wise, textiles and garments, gems and jewellery, account for major economic activities for the country. Owing to the faster growth attained at the external front, share of foreign trade in the country's Gross Domestic Product (GDP) has significantly raised to 24.1 per cent in 2003-04 from 14.6 per cent in 1990-91. In absolute terms, the exports and imports have both witnessed exceptional growth over the years. India's total merchandise exports were engineering products and chemicals and related products and agricultural and allied products are India's major items of exports (see Table 11.3). Though in overall terms India accounts for just 0.8 per cent of world exports, in many individual product items such as tea, pearls, precious and semi-precious stones, medicinal and pharmaceutical products, rice, spices, iron ore and concentrates, leather and leather manufactures, textile yarns fabrics, garments and tobacco, its share is much greater and varies between 3 per cent and 13 per cent. Also, as regards commodities such as basmati rice, tea, and ayurvedic products, India holds the unique position of being the largest exporter in the world. As far as imports are concerned, products likes crude oil and petroleum products, capital goods (i.e., machinery), electronic goods, pearl, precious and semi-precious stones, gold, silver and chemicals constitute major items of India's imports. USA, UK, Belgium, Germany, Japan, Switzerland, Hong Kong, UAE, China, Singapore and Malaysia are India's eleven major trading Partners. While USA has been India's leading trade partner with a share of 11.6 per cent in India's total trade (including both exports and imports), shares of other ten countries have been in the range of 2.1 per cent to 4.4 per cent in 2003-04. Outstandingly over the the last four decades. The change in the composition of services exports is a remarkable matter. Software and other miscellaneous services (including professional technical and business services) have turned out as the major sectors of India's exports of services. While the relative share of travel and transportation has declined from 64.3 per cent in 1995-96 to 29.6 per cent in 2003-2004, the share of software exports has gone up from 10.2 per cent to around 49 per cent in the corresponding period (see Table 11.7).

Key Terms

International business FDI Licensing International trade Portfolio investment Franchising Merchandise trade Exporting Outsourcing Invisible trade importing Joint ventures Foreign investment Contract- Wholly owned subsidiaries manufacturing.

India's Foreign Investments

It is evident that there has been a exceptional increase in foreign investments flow into and from India. While the inward foreign investments have grown more than 750 times from just Rs. 201 crores in 1990-91 to Rs.1,51,406 crores in 2003-04, India's Investments in foreign countries have increased much more exponentially -around 4,927 times - from Rs. 19 crores in 1990-91 to Rs. 8,3,616 crores in 2003-04.

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