Index1. Introduction

Trade Policy Foreign Trade

2. History of Foreign Trade 3. Legal Framework Of Foreign Trade Policy 4. General Framework 5. Provisions on Import & Export6. Banking & Finance 7. External Trade & Investment

Global Trade Relations Balance of Payment Foreign direct Investment Currency Income & Consumption Import Duty & Taxes

8. Indian Imports & its Composition 9. Trend in India’s Foreign Imports

Trade Performance World Trade Scenario Import Of Sensitive Items Summary of Import Sensitive Items Import of Principal Commodities

CHAPTER I

INTRODUCTION

Creation of appropriate institutional framework and supportive environment facilitates the growth of external trade. In a developing country like India, the real barometer of sustained economic development is the growth index of exports. Sustained growth in exports can only be accelerated by conducive framework. The primary objective and emphasis of the framework is towards accelerated development with the required regulation to support theFramework structure. The role of regulation is to protect the interests of consumers, obtain conditions of competition and foster the institutional framework. The present regulatory framework in India is highly supportive. The attitude of the government, a very important aspect for faster pace, is poised in that direction to make the framework achieve the sustained growth, removing the bottlenecks, hindering the path of progress and development.

TRADE POLICYTrade policy is one of the many economic instruments for achieving economic growth. The basic twin objectives of the trade policy have been to promote exports and restrict imports to the level of foreign exchange available in the country. The inherent problems of the country have been non-availability/acute shortage of crucial inputs like industrial raw materials, supporting relevant technology and required capital goods. The problems can be removed by imports. But, continuous imports are neither possible nor desirable. The gap between exports and imports is financed through borrowing and foreign aid. However, imports must be financed by exports, in the long run. The basic objective of the trade policy revolves round the instruments and techniques of export promotion and import management.

FOREIGN TRADEForeign trade is recognized as the most significant determinants of economic development of a country, all over the world. For providing, regulating and creating necessary environment for its orderly growth, several Acts have been put in place. The foreign trade of a country consists of inward and outward movement of goods and services, which results into outflow and inflow of foreign exchange. The foreign trade of India is governed by the Foreign Trade (Development & Regulation) Act, 1992 and the rules and orders issued there under. Payments for import and export transactions are governed by Foreign Exchange Management Act, 1999. Customs Act, 1962 governs the physical movement of goods and services through various modes of transportation. To make India a quality producer and exporter of goods and services, apart from projecting such image, an important Act—Exports (Quality control & inspection) Act, 1963 has been in vogue.Developmental pace of foreign trade is dependent on the Export-Import Policy adoptedBy the country too. Even the Exim Policy 2002-2007 lays its stress to simplify procedures,Sharply, to further reduce transaction costs. Today’s international trade is not only highly competitive but also dynamic. Necessary responsive framework to make exports compete globally, is essential. In order to harness these gains from trade, the transaction costs, in turn dependent on the framework support, involved need to be low for trading within the country and for international trade. International trade is a vital part of development strategy and it can be an effective instrument of economic growth, employment generation and poverty alleviation. Market conditions change, almost daily, requiring quick response and more importantly, anticipation of the future requirements is the need of the hour. To gear with the changing requirements, it is essential that the framework has to remain in pace and change in anticipation, accordingly, and then only international trade can pick up the speed envisaged.

CHAPTER II

HISTORY OF FOREIGN TRADE

Why Imports?Because of tough competition, you can sell only if the quality of your product is better than that of your competitors, the price most competitive and the buyers get delivery on time. In order to achieve all this, one needs to have access to international standard quality materials and capital goods. We also need to have better technology at our command as there is a sea change in the markets worldwide. We have moved from letters to e-mails, tele faxes to video conferencing and manually operated phones to cellular phones via satellite. Today it is not possible to compete in the world without a better technological product. We cannot match the standards of quality and services that others offer if we happen to be out-dated – and that means out of market as well. By accepting membership of the World Trade Organisation (WTO), India has become a part of the global village. New trade blocks are emerging and new world order is getting established.Even regional trading arrangements (RTAs) are mushrooming an it is estimated by the WTO that by 2010 there would be close to 400 RTAs. Even India is negotiating bilateral agreements with various countries and regional groupings. A number of joint ventures are being signed for export promotion as well as better quality production for domestic market.

The FDI inflows into the country from 1991 to June, 2008 stand at more than $ 89 billion. We have witnessed a major change in this area between the years 1992-2007 and if one scans through the newspapers, one will find that economic news has taken priority over political news. The area in which the imports are almost essential are defence requirements, crude oil, fertilizers, capital goods, industrial inputs like raw materials, components, consumables, spares, etc., import of samples, import of technology, import of drawing and designs, import of services etc. There are many vital areas where there is a need to import capital goods - new as well as second hand – in order to upgrade our products and services.

Further, there is an increase in factor mobility. The various factor of production like raw materials, labour, capital goods, spares, consumables, etc. have become mobile. It is easy to relocate any of these factors from one country to another depending on where they are needed. This gives rise to opportunities where various components of a value chain are completed in different countries. For example, a company in USA may buy fabric from China, source design from Italy, labour from Bangladesh and Sri Lanka and arrange to make a garment to be sold in Europe. Likewise, in the case of contract manufacture, a firm makes a contract with another firm abroad whereby the contracted party manufactures or assembles a product on behalf of the contractor. The contractor retains full control over marketing and distribution whilst the manufacturing is done by the local company.

The advantages of such outsourcing are:

There is no need to invest in plant overseas The risks of asset expropriation are minimized Risks associated with currency fluctuations are better managed Control of marketing is retained by the contractor A product manufactured in the overseas market may be easier to sell, especially to

government customers Lower transport costs and Sometimes lower production costs can be obtained.

To sum up, it is not possible to survive without imports when the world is moving so rapidly towards globalization and liberalization. The phenomena of global sourcing at the most competitive costs and the need to increase productivity of the domestic industry through the imports of hi-technology products has resulted in import liberalization being an imperative tool for economic growth.

CHAPTER III

LEGAL FRAMEWORK OF FOREIGN TRADE POLICY

India’s exports and imports are governed by:

Foreign Trade (Development & Regulation) Act, 1992 Foreign Trade (Regulation) Rules 1993 Foreign Trade (Exemption) Order 1993 Export and Import Policy - now called Foreign Trade Policy Handbook of Procedures – Vol. I Handbook of Procedures – Vol. II incorporating the Standard Input Output Norm ITC (HS) Classification of Import and Export Policy

Foreign Trade (Development & Regulation) Act, 1992The Salient features of the Act are as follows:(1) Objective: Development and regulation of foreign trade by facilitating imports and

augmenting exports.

(2) Section 3 : Enables the Central Govt. to make development and regulation of foreign trade and prohibit, restrict or otherwise regulate import and export of goods

(3) Section 5 : Enables the Central Govt. to formulate and announce the Export and Import Policy and also amend the Policy

(4) Section 6: Provides for appointment of Director General of Foreign Trade to advise the Central Govt. in the formulation of the Export and Import Policy and be responsible for implementation of the same.

(5) Section 7 : Provides that any import/export can be made only by a person holding an Importer Exporter Code Number

(6) Sections 8 and 9 : Provide for issue, renewal, refusal or cancellation of Importer Exporter Code Number or license to export or import

(7) Sections 10 to 14 : Provide for search and seizure, fiscal penalty/confiscation in the event of contravention, and adjudication and reasonable opportunity to the owner of goods

(8) Section 15 to 17 : Provide for Appeal, Revision and powers of adjudicating and other authorities

Foreign Trade (Regulation) Rules, 1993

These Rules are made under the Rule making powers vested with Central Govt. under Section 19 of the Foreign Trade (Development and Regulation) Act, 1992. The salient features are:(1) Rule 3: Enables the Director General of Foreign Trade to issue Special Licences to

persons whose Importer Exporter Code Numbers have been suspended or cancelled.

(2) Rule 5 : Specifies the scale of fees to be paid towards applications for licences and categories which are exempt from payment of fees

(3) Rule 6 : Details the general conditions applicable to licences and Import Certificates issued under the Indo-US Memorandum of Understanding

(4) Rule 7 : Specifies the circumstances under which a licence can be refused

(5) Rule 8 : Enables the licensing authority to amend a licence

(6) Rule 9 : Deals with suspension of licences

(7) Rule 10 : Deals with cancellation of licences

(8) Rule 13 : Indicates the manner of utilization of goods allotted by STC etc. and of the goods imported against a licence

Foreign Trade (Exemption from application of Rules) Order, 1993

The main feature of this Order is that it details the categories of imports and exports, which are exempt from the application of Rules. Important exemptions are as under:

A. Imports(1) Imports for defence purposes(2) Import by Central/State Government or Public Sector Undertaking through the India Supply Mission at Washington and London(3) Imports for transit to other countries(4) Imports under Baggage Rules(5) Personal Imports(6) Imports by Diplomatic Personnel(7) UN officials(8) Temporary Imports for fairs, Exhibitions etc.

CHAPTER IV

GENERAL PROVISIONS REGARDING IMPORTS AND EXPORTS

Import Policy– ITC (HS)The liberalization of Indian economy started with the external sector. The Rupee was devalued in two stages in July 1991. This was immediately followed by abolition of direct export subsidies. Import licensing was abolished for many items, including capital goods. A new type of import licence called Exim Scrip was introduced. Exim Scrip was available against export of goods and it was freely transferable in the market. The licence was valid for import of a broad range of goods. So, importers wanted Exim Scrips but only exporters could earn them. The premium on sale of the Exim Scrip was an incentive for theexporters.

In February 1992, the Union Budget introduced a dual exchange rate mechanism. Under the Liberalised Exchange Rate Mechanism (LERMS), Reserve Bank of India sold foreignexchange for essential purposes at official exchange rates. Other importers had to buy foreign exchange at market determined rates, whereas the exporters could sell foreign exchange at a composite rate i.e.60% at market rates and 40% at official exchange rates. Exim Scrips were abolished after dual exchange rate mechanism was introduced.

The liberalization process called for abolition of controls. The 1992-97 Export and Import Policy (Exim Policy) heralded historic changes. It was the first five-year Policy. It was coterminous with the Eighth Five Year Plan. The Policy recognized that trade can flourish only in a regime of substantial freedom. It reinforced the direction set by the trade policy reforms initiated in July 1991. The Policy complemented the changes in industrial andfiscal policies.

The fundamental feature of the new Policy was to substantially eliminate licensing, quantitative restrictions and other regulatory and discretionary controls. Earlier, all goods were restricted for imports unless specifically permitted for imports. The new Policy ordained that all goods could be freely imported unless specifically restricted, through a Negative List of Imports.

The Negative List was kept as small as possible and the Policy of the Govt. was to prune the list from time to time as the economy gained in strength. The restrictions were on the grounds of public policy. The restrictions were considered necessary foreconomic reasons as well as on grounds of safety, security, environment, employment and the like.

In the 1992-97 Policy, the List of Restricted Items consisted of 11 categories as under:(a) Consumer Goods (11 entries)(b) Precious, Semi-precious and other stones (5 entries)(c) Safety, Security and related items (6 entries)(d) Seeds, Plants and Animals (4 entries)(e) Insecticides and Pesticides (2 entries)(f) Electronic Items (9 entries)(g) Drugs and Pharmaceuticals (9 entries)(h) Chemicals and Allied Items (2 entries)(i) Items Relating to Small Scale Sector (16 entries)(j) Miscellaneous Items (15 entries)(k) Special Categories (2 entries)

Also, eight categories of items like Fertilizers, Petroleum Products, Edible Oils etc. imported only by Designated Canalizing Agencies like STC, MMTC, IOC etc. but for which the Govt. could grant licenses to others to import.

Duty Free Import Authorization Scheme – DFIA

The new DFIA scheme is a combination of Advance authorization and DFRC. Under the new DFIA scheme all the duties are exempted. This can be either post export scheme or the inputs can be imported and utilised for production. Like DFRC the inputs and finished products are freely transferable with the condition that such transfers should be affected on payment of additional duties.

The minimum value addition to be achieved under the new DFIA scheme is 20% as compared to 25% under the erstwhile DFRC scheme. This facility of DFIA is available only for the products which have SION. Under this scheme, an exporter who wishes to export under DFIA scheme should apply before he affects such exports and provide the application reference in export documents. He can use his duty paid inputs and later replenish after subsequently importing the same. He need not pay any duty on such importsUnlike DFRC where he was required to pay Additional duty of customs.

If the exporter wishes to use the same for further production, he can do so, or he can transfer either input as such or finished product on payment of applicable duties. As with DFRC, nexus condition –but broader in nature – is kept for some export products also.

Import for Jobbing

Many exporters could get orders for jobbing i.e. the foreign buyer supplies all or most of the inputs or even moulds, jigs, fixtures etc., required for making the end product on job-work basis and pays only the job-work charges to the manufacturer. Such imports had to be made duty free against an export obligation but as no payments were involved for the value of inputs or for the value of the export products, the QBAL scheme was not quite appropriate. So, the Govt. maintained a scheme of Advance Customs Clearance Permits (ACCP) under which the requisite inputs, moulds etc. could be imported duty free against obligation to export the resultant products and achieve the 10% value addition. ACCP was abolished in 1995 and the scheme is being administered under a Customs Exemption Notification 32/97.Under the Customs Exemption Notification no. 32/97, jobbing has become much simpler. There is no need for a licence. The manufacturer has to approach his jurisdictional Central Excise authorities, take a special registration and execute a bond and make an application to allow the duty exemption on materials that the foreign supplier sends free of charge. On the basis of the bond and application, the C.Ex. Authorities issue an Import ProcurementCertificate (IPC). On the basis of the IPC, the Customs allow the duty exemption. The manufacturer jobber has to export the manufactured goods and give necessary proof to the C.Ex. Authorities.

Import of SparesEarlier, there was a limit of 10% on import of spares. Now that limit has been withdrawn. Spares can be imported upto any value within the EPCG licence value. Moreover, even spares for existing machinery can be imported under EPCG scheme. Spares can be imported anytime within the validity of the licence. The capital goods have to be imported within 24 months from the date of issue of licence. The usual relaxations for validity of licences will be available for EPCG licences also.EPCG licence scheme has been liberalized so much that the Government expects to bring down the cost of setting up a project substantially. This is expected to enable even smallentrepreneurs get second hand capital goods at 3% duty. The Government expects substantial boost to industrial and economic activity through the EPCG scheme.In January 2004, the Government has further liberalized the EPCG scheme by allowing exports by group companies to discharge the export obligation. The EPCG committees at various licensing offices have been abolished. Regional Licensing Authorities can grant licences up to Rs. 50 Crore against a Chartered Engineer’s certificate. The EPCG committee at the DGFT’s office will consider applications for licenses for higher value.

Imports allowedAn EOU can import capital goods, raw materials etc. without import duty payment. The goods manufactured by an EOU are subject to excise duty. The excise duty is exempted, if thegoods are exported. However, if the goods are sold in DTA, excise duty is leviable. To avail duty exemption, it is essential that the final product be not exempted. Otherwise, there will be no duty exemption available under EOU Scheme.

Banking and finance

The Indian money market is classified into the organised sector, comprising private, public and foreign owned commercial banks and cooperative banks, together known as scheduled banks, and the unorganised sector, which includes individual or family owned indigenous bankers or money lenders and non-banking financial companies.[98] The unorganised sector and microcredit are still preferred over traditional banks in rural and sub-urban areas, especially for non-productive purposes, like ceremonies and short duration loans.[99]

Prime Minister Indira Gandhi nationalised 14 banks in 1969, followed by six others in 1980, and made it mandatory for banks to provide 40% of their net credit to priority sectors like agriculture, small-scale industry, retail trade, small businesses, etc. to ensure that the banks fulfill their social and developmental goals. Since then, the number of bank branches has increased from 8,260 in 1969 to 72,170 in 2007 and the population covered by a branch decreased from 63,800 to 15,000 during the same period. The total bank deposits increased from 59.1 billion (US$940 million) in 1970–71 to 38309.22 billion (US$610 billion) in 2008–09. Despite an increase of rural branches, from 1,860 or 22% of the total number of branches in 1969 to 30,590 or 42% in 2007, only 32,270 out of 500,000 villages are covered by a scheduled bank.[100][101]

India's gross domestic saving in 2006–07 as a percentage of GDP stood at a high 32.8%.[102] More than half of personal savings are invested in physical assets such as land, houses, cattle, and gold.[103] The public sector banks hold over 75% of total assets of the banking industry, with the private and foreign banks holding 18.2% and 6.5% respectively.[104] Since liberalisation, the government has approved significant banking reforms. While some of these relate to nationalised banks, like encouraging mergers, reducing government interference and increasing profitability and competitiveness, other reforms have opened up the banking and insurance sectors to private and foreign players.[78][105]

External trade and investment

Global trade relations

A map showing the global distribution of Indian exports in 2006 as a percentage of the top market (USA – $20,902,500,000).Until the liberalisation of 1991, India was largely and intentionally isolated from the world markets, to protect its economy and to achieve self-reliance. Foreign trade was subject to import tariffs, export taxes and quantitative restrictions, while foreign direct investment (FDI) was restricted by upper-limit equity participation, restrictions on technology transfer, export obligations and government approvals; these approvals were needed for nearly 60% of new FDI in the industrial sector. The restrictions ensured that FDI averaged only around $200 million annually between 1985 and 1991; a large percentage of the capital flows consisted of foreign aid, commercial borrowing and deposits of non-resident Indians.

India's exports were stagnant for the first 15 years after independence, due to general neglect of trade policy by the government of that period. Imports in the same period, due to industrialisation being nascent, consisted predominantly of machinery, raw materials and consumer goods.

Graphical depiction of India's product exports in 28 color-coded categories.Since liberalisation, the value of India's international trade has increased sharply, with the contribution of total trade in goods and services to the GDP rising from 16% in 1990–91 to 47% in 2008–10. India accounts for 1.44% of exports and 2.12% of imports for merchandise trade and 3.34% of exports and 3.31% of imports for commercial

services trade worldwide. India's major trading partners are the European Union, China, the United States of America and the United Arab Emirates. In 2006–07, major export commodities included engineering goods, petroleum products, chemicals and pharmaceuticals, gems and jewellery, textiles and garments, agricultural products, iron ore and other minerals. Major import commodities included crude oil and related products,

machinery, electronic goods, gold and silver. In November 2010, exports increased 22.3% year-on-year to 850.63 billion (US$14 billion), while imports were up 7.5% at 1251.33 billion (US$20 billion). Trade deficit for the same month dropped from 468.65 billion (US$7.5 billion) in 2009 to 400.7 billion (US$6.4 billion) in 2010. India is a founding-member of General Agreement on Tariffs and Trade (GATT) since 1947 and its successor, the WTO. While participating actively in its general council meetings, India has been crucial in voicing the concerns of the developing world. For instance, India has continued its opposition to the inclusion of such matters as labour and environment issues and other non-tariff barriers to trade into the WTO policies.

Balance of payments

Cumulative Current Account Balance 1980–2008 based on IMF dataSince independence, India's balance of payments on its current account has been negative. Since economic liberalisation in the 1990s, precipitated by a balance of payment crisis, India's exports rose consistently, covering 80.3% of its imports in 2002–03, up from 66.2% in 1990–91.[131] However, the global economic slump followed by a general deceleration in world trade saw the exports as a percentage of imports drop to 61.4% in 2008–09.[132] India's growing oil import bill is seen as the main driver behind the large current account deficit,[106] which rose to $118.7 billion, or 9.7% of GDP, in 2008–09.[133] Between January and October 2010, India imported $82.1 billion worth of crude oil.[106]

Due to the global late-2000s recession, both Indian exports and imports declined by 29.2% and 39.2% respectively in June 2009.[134] The steep decline was because countries hit hardest by the global recession, such as United States and members of the European Union, account for more than 60% of Indian exports.[135] However, since the decline in imports was much sharper compared to the decline in exports, India's trade deficit reduced to 252.5 billion (US$4.0 billion).[134] As of June 2011, exports and imports have both registered impressive growth with monthly exports reaching $25.9 billion for the month of May 2011 and monthly imports reaching $40.9 billion for the same month. This represents a year on year growth of 56.9% for exports and 54.1% for imports.[22]

India's reliance on external assistance and concessional debt has decreased since liberalisation of the economy, and the debt service ratio decreased from 35.3% in 1990–91 to 4.4% in 2008–09.[136] In India, External Commercial Borrowings (ECBs), or commercial loans from non-resident lenders, are being permitted by the Government for providing an additional source of funds to Indian corporates. The Ministry of Finance monitors and regulates them through ECB policy guidelines issued by the Reserve Bank of India under the Foreign Exchange Management Act of 1999.[137] India's foreign exchange reserves have steadily risen from $5.8 billion in March 1991 to $283.5 billion in December 2009. [138]

Foreign direct investmentSee also Foreign direct investment, India section.

Share of top five investing countries in FDI inflows. (2000–2010)[139]

Rank Country Inflows(million USD)

Inflows (%)

1 Mauritius 50,164 42.00

2 Singapore 11,275 9.00

3 USA 8,914 7.00

4 UK 6,158 5.00

5 Netherlands 4,968 4.00

As the third-largest economy in the world in PPP terms, India is a preferred destination for FDI;[140] During the year 2011, FDI inflow into India stood at $36.5 billion, 51.1% higher than 2010 figure of $24.15 billion. India has strengths in telecommunication, information technology and other significant areas such as auto components, chemicals, apparels, pharmaceuticals, and jewellery. Despite a surge in foreign investments, rigid FDI [141] policies were a significant hindrance. However, due to positive economic reforms aimed at deregulating the economy and stimulating foreign investment, India has positioned itself as one of the front-runners of the rapidly growing Asia-Pacific region.[140] India has a large pool of skilled managerial and technical expertise. The size of the middle-class population stands at 300 million and represents a growing consumer market.[142]

During 2000–10, the country attracted $178 billion as FDI.[143] The inordinately high investment from Mauritius is due to routing of international funds through the country given significant tax advantages; double taxation is avoided due to a tax treaty between India and Mauritius, and Mauritius is a capital gains tax haven, effectively creating a zero-taxation FDI channel.[144]

India's recently liberalised FDI policy (2005) allows up to a 100% FDI stake in ventures. Industrial policy reforms have substantially reduced industrial licensing requirements, removed restrictions on expansion and facilitated easy access to foreign technology and foreign direct investment FDI. The upward moving growth curve of the real-estate sector owes some credit to a booming economy and liberalised FDI regime. In March 2005, the government amended the rules to allow 100% FDI in the construction sector, including built-up infrastructure and construction development projects comprising housing, commercial premises, hospitals, educational institutions, recreational facilities, and city- and regional-level infrastructure.[145] Despite a number of changes in the FDI policy to remove caps in most sectors, there still remains an unfinished agenda of permitting greater FDI in politically sensitive areas such as insurance and retailing. The total FDI equity inflow into India in 2008–09 stood at 1229.19 billion (US$20 billion), a growth of 25% in rupee terms over the previous period.[146]. India's trade and business sector has grown fast. India currently accounts for 1.5% of world trade as of 2007 according to the World Trade Statistics of the WTO in 2006.

Currency

The RBI's new headquarters in MumbaiMain articles: Indian rupee and Reserve Bank of IndiaThe Indian rupee ( ) is the only legal tender in India, and is also accepted as legal tender in the neighbouring Nepal and Bhutan, both of which peg their currency to that of the Indian rupee. The rupee is divided into 100 paise. The highest-denomination banknote is the 1,000 note; the lowest-denomination coin in circulation is the 50 paise coin;[147] with effect from 30 June 2011 all denominations below 50 paise have ceased to be legal currency.[148]

[149] India's monetary system is managed by the Reserve Bank of India (RBI), the country's central bank.[150] Established on 1 April 1935 and nationalised in 1949, the RBI serves as the nation's monetary authority, regulator and supervisor of the monetary system, banker to the government, custodian of foreign exchange reserves, and as an issuer of currency. It is governed by a central board of directors, headed by a governor who is appointed by the Government of India.[151]

The rupee was linked to the British pound from 1927 to 1946 and then the U.S. dollar till 1975 through a fixed exchange rate. It was devalued in September 1975 and the system of fixed par rate was replaced with a basket of four major international currencies – the British pound, the U.S. dollar, the Japanese yen and the Deutsche mark.[152] From 2003 to 2008, the rupee appreciated against the U.S. dollar; thereafter, it has sharply depreciated. Between 2010 and 2012, the rupee value had depreciated by about 30% of its value to the U.S. dollar in 2010.[153]

Income and consumptionMain article: Income in India

World map showing the Gini coefficient, a measure of income inequality. India has a Gini coefficient of 0.368.India's gross national income per capita had experienced high growth rates since 2002. India's Per Capita Income has tripled from Rs. 19,040 in 2002–03 to Rs. 53,331 in 2010–

11, averaging 13.7% growth over these eight years peaking 15.6% in 2010–11.[154] However growth in the inflation adjusted Per capita income of the nation slowed to 5.6% in 2010–11, down from 6.4% in the previous year. As of 2010, according to World Bank statistics, about 400 million people in India, as compared to 1.29 billion people worldwide, live on less than $1.25 (PPP) per day. These consumption levels are on an individual basis, not household.[155]

Per 2011 census, India has about 330 million houses and 247 million households. The household size in India has dropped in recent years, with 2011 census reporting 50% of households have 4 or less members. Some households have 6 or more members, including the grandparents.[156][157][158] These households produced a GDP of about $1.7 Trillion.[159] The household consumption patterns per 2011 census: about 67 percent of households use firewood, crop residue or cow dung cakes for cooking purposes; 53 percent do not have sanitation or drainage facilities on premises; 83 percent have water supply within their premises or 100 metres from their house in urban areas and 500 metres from the house in rural areas; 67 percent of the households have access to electricity; 63 percent of households have landline or mobile telephone connexion; 43 percent have a television; 26 percent have either a two wheel (motorcycle) or four wheel (car) vehicle. Compared to 2001, these income and consumption trends represent moderate to significant improvements.[156][157] One report in 2010 claimed that the number of high income households has crossed lower income households.[160]

GNI per capita:   India (1,170 $)

   Higher GNI per capita compared to India

   Lower GNI per capita compared to India

India has about 61 million children under the age of 5 who are chronically malnourished, compared to 150 million children worldwide. Majority of malnourished children of India live in rural areas. Girls tend to be more malnourished than boys. Malnourishment, claims this report, is not a matter of income, rather it is education as in other parts of the world. A third of children from the wealthiest fifth of India's population are malnourished. This is because of poor feeding practices – foremost among them a failure exclusively to breastfeed in the first six months – play as big a role in India's malnutrition rates as food shortages. India's government has launched several major programs with mandated social spending programs to address child malnourishment problem. However, Indian government has largely failed. A public distribution system that targets subsidised food to the poor and a vast midday-meal scheme, to which 120 million children subscribe —are hampered by inefficiency and corruption[citation needed]. Another government-paid program named Integrated Childhood Development Service (ICDS) has been operating since 1975 and it too has been ineffective and a wasteful program.[161] A 2011 UNICEF report claims

recent encouraging signs. Between 1990 to 2010, India has achieved a 45 percent reduction in under age 5 mortality rates, and now ranks 46 in 188 countries on this metric.[162]

Import duty & taxes when importing into IndiaOverviewImport duty and taxes are due when importing goods into India whether by a private individual or a commercial entity.  The valuation method is CIF (Cost, Insurance and Freight), which means that the import duty and taxes payable are calculated on the complete shipping value, which includes the cost of the imported goods, the cost of freight, and the cost of insurance.  Duty in particular is calculated on the sum of the CIF value and landing charges (explained below). Some duties are also based on quantity measurements.  In addition to duty, imports are subject to other taxes and charges such as landing charges, countervailing duty, CESS, and education CESS.  Duty RatesDuty rates in India can be ad valorem (as a percentage of value) or specific (rupees per unit).  Duty rates vary from 0% to 150%, with an average duty rate of 11.9%.  Some goods are not subject to duty (e.g. laptops and other electronic products). Sales TaxThere is no sales tax in India for imported goods. Minimum thresholdsThere is no minimum threshold in India, i.e. all imports regardless of their value are subject to duty and taxes.Other taxes and custom fees

Landing charges:  (1% CIF) Countervailing duty (CVD): (0%, 6% or 12% (CIFD + Landing charges)) CESS (Education + Higher Education): 3% (Duty + Countervailing duty) Additional CVD: 4% (CIFD + Landing charges + Countervailing duty + CESS)

 Local Customs office and contactsMore information on import declaration procedures and import restrictions can be found at the Indian Customs website.Composition of India's Imports

In 1947-48 the main items of India's imports were machineries, oil, grains, cotton, cutlery, hardware implements, chemicals, etc. They constituted 70% of India's imports. After that due to the emphasis on industrialisation during the second 5-Year plan necessitated the imports of capital goods.Now imports of India's are broadly classified into following four categories.

Table below shows composition of India's import from 1990-91 to 2005-06.

India ImportsImports in India increased to 2277.60 INR Billion in July of 2013 from 2104.33 INR Billion in June of 2013. Imports in India is reported by the Directorate General of Commerce. India Imports averaged 373.09 INR Billion from 1978 until 2013, reaching an all time high of 2475.94 INR Billion in January of 2013 and a record low of 4.98 INR Billion in April of 1978. India is heavily dependent on coal and foreign oil imports for its energy needs. Other imported products include: machinery, gems, fertilizers and chemicals. India’s main import partners are China (12 percent of total imports), United Arab Emirates, Switzerland, Saudi Arabia, United States, Iraq and Kuwait. This page contains - India

Imports - actual values, historical data, forecast, chart, statistics, economic calendar and news. 2013-08-27TO SIGNUP TO EXPORT DATA   USE ADVANCED TOOLS

LIST BY COUNTRY EMBED CHART

Trade LastPrevious

Highest

Lowest

Forecas

t

Unit

Trend

CURRENT ACCOUNT

-18.10

2013-03-31

-32.63

7.36

-32.63

-14.69

2013-06-30

USD Billion

CURRENT ACCOUNT TO GDP

-4.80

2012-12-3

-4.20

1.50

-4.80

-4.88

2013-12-3

Percent

1 1

EXTERNAL DEBT

345819.00

2012-12-31

305931.00

345819.00

75858.00

349301.29

2013-12-31

USD Million

FOREIGN DIRECT INVESTMENT

2129.00

2013-06-15

1917.00

5670.00

58.00

2318.65

2013-07-31

USD Million

REMITTANCES

7845.07

2013-02-15

8173.09

8549.25

5999.10

7401.50

2013-06-30

USD Million

TERMS OF TRADE

113.00

2011-06-30

91.00

113.00

77.00

114.74

2011-12-31

Index Points

BALANCE OF TRADE

-733.33

2013-07-15

-715.31

13.91

-1111.46

-740.74

2013-08-31

INR Billion

EXPORTS

1544.27

2013-07-

1389.02

1672.52

3.75

1439.41

2013-08-

INR Billion

15

31

IMPORTS

2277.60

2013-07-15

2104.33

2475.94

4.98

2263.72

2013-08-31

INR Billion

VIEW MORE INDICATORS

Imports | NotesAn import is any good or service brought into one country from another country in a legitimate fashion, typically for use in trade. Import goods or services are provided to domestic consumers by foreign producers. An import in the receiving country is an export to the sending country. Import of goods normally requires involvement of the Customs authorities in both the country of import and the country of export and is often subject to import quotas, tariffs and trade agreements.

TRENDS IN INDIA'S FOREIGN TRADE

Trade Performance Exports crossed the landmark figure of US $ 100 billion to reach US $ 103 billion during 2005-06. During the current year 2006-07 exports are expected to reach the target of US $ 125 billion if the present rate of growth of exports is maintained during the last quarter of the year. The sustained growth of merchandise exports at more than 20 per cent during the

last few years is more than twice the growth of Gross Domestic Product (GDP). If this trend continues the export target of US $ 150 billion set in the Foreign Trade Policy for

2009 is likely to be achieved quite comfortably as can be seenat Box 2.1.

The growth performance of exports has been an outcome of a conscious and concerted effort on the part of the Government to bring down transaction costs and facilitate trade.

The vision and the roadmap provided by the Foreign Trade Policy (2004-09) for a five year period with clearly enunciated objectives, strategies and policy initiatives has been

instrumental in putting exports on a higher growth trajectory. The export target during 2004-05 at around US $ 75 billion was sought to be doubled to US $ 150 billion by the terminal year of the Foreign Trade Policy, i.e. 2008-09. For the

first time in the history of planning doubling of exports in less than five years is being seen as an achievable target. What is even more significant is that exports have been conceived

of as an engine for generating additional economic activity for employment generation with special focus on rural and semi-urban areas.

Exports are projected to touch the target of US $ 125 billion by the end of the current financial year 2006-07 if the present rate of growth is maintained during the last quarter of

the year.The export growth in India is partly on account of a favourable international environment resulting from a sustained world GDP growth at around 5 per cent since 2003. This has led to booming trade volumes and rising commodity prices in the world market.

However, this alone does not entirely explain the 250 unprecedented growth performance. Exports from India also responded to numerous

reform measures and policy initiatives. The Government made a conscious and concerted effort to reduce trade barriers, bring down transaction costs and facilitate trade. For the first

time in the history of planning doubling of export activity within five years was set as a concrete target of the Foreign Trade Policy of the Government. During the first nine

months of the current financial year ( April - December 2006-07) exports stood at US $ 89 billion while imports were valued at US $ 131 billion. Trade deficit was estimated at US $ 42 billion. The aggregate foreign trade data in US Dollar and Rupee terms for the period April- December 2005-06 and April- December 2006-07 are given below in Table 2.1.

Trade BalanceThe Trade deficit in 2011-12 (Apr-Dec) was estimated at US $ 133.27 billion which was higher than the deficit of US $ 96.21 billion during 2010-11 (Apr-Dec). Performance of

Exports, Imports and Balance of Trade during 2004-05 to 2011-12 (April-Dec) is given in the table below:

(Values in Crores)

S.No

Year Exports %Growth

Imports %Growth

Trade Balanc

e

1 2004-2005

3,75,340 27.94 5,01,06

5 39.53-

1,25,725

2 2005-2006

4,56,418 21.6 6,60,40

9 31.8-

2,03,991

3 2006-2007

5,71,779 25.28 8,40,50

6 27.27-

2,68,727

4 2007-2008

6,55,864 14.71 10,12,3

12 20.44-

3,56,448

5 2008-2009

8,40,755 28.19 13,74,4

36 35.77-

5,33,680

6 2009-2010

8,45,534 0.57 13,63,7

36 -0.78-

5,18,202

7

2010-2011 (Provisional)

11,42,649 35.14 16,83,4

67 23.45-

5,40,818

8 2010-11 (Apr-Dec)

7,89,069

12,28,074

-4,39,0

06

9 2011-12 (Apr-Dec)

10,24,707 29.86 16,51,2

40 34.46-

6,26,533

Data Source: DGCIS, Kolkata  

S.No Year Export

s%Grow

thImport

s%Grow

th

Trade Balanc

e

1 2004-2005 83,536 30.85 1,11,517 42.7 -

27,981

2 2005-2006 1,03,091 23.41 1,49,1

66 33.76 -46,075

3 2006-2007 1,26,4 22.62 1,85,7 24.52 -

14 35 59,321

4 2007-2008 1,63,132 29.05 2,51,6

54 35.49 -88,522

5 2008-2009 1,85,295 13.59 3,03,6

96 20.68-

1,18,401

6 2009-2010 1,78,751 -3.53 2,88,3

73 -5.05-

1,09,621

72010-2011 (Provision

al)

2,51,136 40.49 3,69,7

69 28.23-

1,18,633

8 2010-11 (Apr-Dec)

1,72,965

2,69,175

-96,210

9 2011-12 (Apr-Dec)

2,17,664 25.84 3,50,9

36 30.4-

1,33,272

Chart 2.2Month-wise Growth during 2011-12 (April-Dec) over 2010-11 (April-

Dec)World Trade Scenario

As per IMF’s World Economic Outlook October, 2011, world trade recorded its largest ever annual increase in 2010, as merchandise exports surged 14.4 per cent. The volume of

world trade (goods and services) in 2011 is expected to slow down to 7.5 per cent compared to the 12.8 per cent achieved in 2010. Growth in the volume of world trade is

expected to decline in 2012 to 5.8 per cent as per IMF projections.The IMF has moderated its growth projections of world output to 4 per cent in 2012. The advanced economies are expected to grow at 1.9 per cent in 2012 while the emerging and

developing economies to grow at 6.1 per cent. The projected growth rates in different countries are expected to determine the markets for our exports.

As per WTO’s International Trade Statistics, 2010, in merchandise trade, India is the 20th largest exporter in the world with a share of 1.4 per cent and the 13th largest importer with

a share of 2.1 per cent in 2010. The year 2011 has been a difficult year with Japan facing a major earthquake and tsunami, the swelling of unrest in the Middle East oil producing countries, the slowing down of US

economy and the Euro area facing major financial turbulence. The current global economic slowdown has its epicenter in the Euro-region but the contagion is being witnessed in all major economies of the world. As a result, India’s short-term growth prospects have also

been impacted.

 Import of Sensitive Items during April 09- September 09The total import of sensitive items for the period April-September 2009-10 has been Rs.29256.29 crore as compared to Rs.21186.61 crore during the corresponding period of last year thereby showing an increase of 38.1%. The gross import of all commodities during same period of current year was Rs.790644 crore as compared to Rs 605075 crore during the same period of last year. Thus import of sensitive items constitutes 2.7% and 4.8% of the gross imports during last year and current year respectively. The summary of import of Sensitive items is given in the Table 2.6.Imports of automobiles, cotton & silk, products of SSI alcoholic beverages and food grains have shown a decline at broad group level during the period. Imports of all other items viz. edible oil, Pulses, fruits & vegetables (including nuts), rubber, spices, marble & granite, tea & coffee and milk & milk products have shown increase during the period under reference.In the edible oil segment, the import has increased from Rs 6265.69 crore last year to Rs 11831.43 crore for the corresponding period of this year. The imports of both crude edible oil as well as refined oil have gone up by 97% and 55% respectively. The increase in edible oil import is mainly due to substantial increase in import of crude palm oil and its fractions.Imports of sensitive items from Indonesia, Myanmar, Brazil, Malaysia, United States of America, Japan, Canada, Ukraine, Argentina, Australia, Benin, Guinea Bissau etc. have gone up while those from China P RP, Korea RP, Germany, Thailand, Cote D’ Ivoire, Czech Republic etc. have shown a decrease.

Imports by Principal CommoditiesDisaggregated data on imports by principal commodities, both in Rupee and

Dollar terms, available for the period 2011-12 (April– October), as compared to the corresponding period of the previous year are given in Table 2.5 and Table

2.6 respectively. Imports of the top five commodities during the period 2011-12 (April-October) registered a share of 62.8 per cent mainly due to significant imports of Petroleum (Crude & Products), Gold, Electronic Goods, Pearls,

precious and semi-precious stones and Machinery except electrical and electronic.

The share of top five Principal Commodity in India’s total imports during 2011-12 (April– October) is given at Chart 2.5 below:

Chart 2.5Share of Top Five Principal Commodities in India’s Imports

2011-12 (April-October)

The import performance by growth of top five Principal commodities during 2011-12 (April– October) vis-a-vis the corresponding period of the previous year is shown at

Chart 2.6.

Chart 2.6Top Five Commodities of Import by Growth 2009-10 & 2010-11

FertilizersDuring 2011-12 (April–October), import of Fertilizers (manufactured) decreased

to US $ 4413.85 million from US $ 4695.51 million in April-October 2011 recording a negative growth of 6.00 per cent.

Petroleum Crude & ProductsThe import of Petroleum Crude & Products stood at US $ 85002.32 million

during 2011-12 (April - October) as against US $ 58175.62 million during the same period of the previous year registering a growth of 46.11 per cent.

Pearls, Precious and Semi-Precious StonesImport of Pearls and Precious and Semi-Precious Stones during 2011-12 (April– October) increased to US $ 17187.45 million from US $ 16907.33 million during

the corresponding period of the previous year registering a marginal growth of 1.66 per cent.

Capital GoodsImport of Capital Goods, largely comprises of Machinery, including Transport Equipment and Electrical Machinery. Import of Machine Tools, Non-Electrical Machinery, Electrical Machinery and Transport Equipment registered a growth

of 43.24 per cent, 26.87 per cent, 26.39 per cent, and (-) 8.74 per cent respectively.

Organic and Inorganic Chemicals During 2011-12 (April– October), import of Organic and Inorganic Chemicals

increased to US $ 10884.61 million from US $ 8847.19 million during the same period of last year, registering a growth of 23.03 per cent. Import of Medicinal

and Pharmaceutical Products increased to US $ 1615.63 million from US $ 1425.68 million during the corresponding period of last year registering a growth

of 13.32 per centCoal, Coke & Briquettes

During 2011-12 (April– October), import of Coal, Coke & Briquettes increased

to US $ 9870.14 million from US $ 6570.07 million during the same period of last year, registering a growth of 50.23 per cent.

Gold & SilverDuring 2011-12 (April– October) import of Gold and Silver increased to US $

38817.81 million from US $ 23320.39 million during the corresponding period of the previous year registering a growth of 66.45 per cent.

Direction of India’s Foreign TradeThe value of India’s exports and imports from major regions/ countries both in Rupee and Dollar terms are given in Table 2.3, 2.4, 2.7 and 2.8 respectively. Share of major

destinations of India’s Exports and sources of Imports during 2011-12 (April– October) are given in Chart 2.7 and 2.8 respectively.

Chart 2.7Major Destinations of India’s Exports for 2011-12 (April-

October)

During the period 2011-12 (April– October), the share of Asia and ASEAN region comprising South Asia, East Asia, Mid-Eastern and Gulf countries

accounted for 50.69 per cent of India’s total exports. The share of Europe and America in India’s exports stood at 19.73 per cent and 16.68 per cent respectively of which EU countries (27) comprises 17.81 per cent. During the period, United Arab Emirates (11.82 per cent) has been the most important country of export destination followed by USA (11.51 per cent), Singapore (6.13 percent), China

(5.35) per cent), Hong Kong (4.44 per cent).Asia and ASEAN accounted for 61.36 per cent of India’s total imports during the period

followed by Europe (19.27 per cent) and America (8.92 per cent). Among individual countries the share of China stood highest at (12.00 per cent) followed by UAE (7.51

per cent), Switzerland (7.21 per cent), Saudi Arabia (6.06 per cent), USA (4.78 per cent) Iraq (3.85 per cent), Germany (3.25 per cent), Nigeria (3.25 per cent), Indonesia (3.06

per cent), Australia (2.96 per cent).

Chart 2.8

Major Source of India’s Imports for 2011-12 (April-October)