Indian Economy #12 | Study Material::General Studies | IAS Help

FOREIGN TRADE IN INDIA

Overview

In 1950, Indias share in total world trade was 1.78 %. By 2002 this had dropped to 0.8 %
India has a total foreign trade of around USD 489 billion. Of this imports accounted for USD
303 billion and exports USD 185 billion
Based on 2008-2009 data, Indias largest trading partner is the UAE (total trade USD 48
billion)
India exports the maximum to UAE (USD 24 billion) and imports the most from the Peoples
Republic of China (USD 32 billion)
Foreign trade in India falls under the purview of the Department of Commerce under the
Ministry of Commerce and Industry

Top trading partners

Rank Country

Exports
(USD billion)
UAE
24.4
PRC
9.3
USA
21.1
Saudi Arabia 5.1
Germany
6.3

1
2
3
4
5

Imports
(USD billion)
23.8
32.4
18.5
19.9
12.0

Total trade
(USD billion)
48.2
41.8
39.7
25.0
18.3

Special Economic Zones (SEZ)

S. No.
1
2
3
4
5
6
7

India was one of the first countries in Asia to recognize the effectiveness of Export
Processing Zones (EPZ)
The first Export Processing Zone (EPZ) in Asia was established in Kandla (Gujarat) in 1965
The Special Economic Zone (SEZ) Policy was announced in 2000
The main objectives of SEZs are
o Generation of additional economic activity
o Promotion of goods and services
o Promotion of investment from domestic and foreign sources
o Creating of employment opportunities
o Development of infrastructure facilities
SEZs function under the Department of Commerce (Ministry of Commerce and Industry)
SEZ
Kandla SEZ
SEEPZ
Noida SEZ
MEPZ
Cochin SEZ
Falta SEZ
Visakhapatnam SEZ

Trade Agreements

Location
Gujarat
Mumbai
Uttar Pradesh
Chennai
Kerala
West Bengal
Andhra Pradesh

Type
Multi product
Electronics, gems and jewellery
Multi product
Multi product
Multi product
Multi product
Multi product

Agreement
Agreement of Cooperation
with
Nepal to control
unauthorised trade

Contracting
parties
India, Nepal

Agreement on South Asia

Free Trade Area (SAFTA)

India, Pakistan,
Sri Lanka,
Nepal, Bhutan,
Bangladesh,
Maldives

Asia Pacific Trade

Agreement (APTA)

Bangladesh,
China,
India, South
Korea, Sri Lanka
India, Singapore

Comprehensive Economic
Cooperation Agreement
between the Republic of
India and the Republic of
Singapore
India Chile Preferential
Trade Agreement (PTA)

India, Chile

India Afghanistan PTA

India,
Afghanistan

India Bhutan Trade

Agreement
India Korea CEPA

India, Bhutan

India MERCOSUR PTA

India, South
Korea
India, MERCOSUR

Notes
Established in 2009
The agreement aims to restrict and prevent
unlawful activities
relating to traffic in narcotics, foreign exchange
etc
Established in 2007
Afghanistan, which became SAARC member in
2007, is set to become latest SAFTA member
India, Pakistan, Sri Lanka are categorised NonLeast Developed Contracting States (NLDCS)
Bhutan, Bangladesh, Nepal, Maldives are Least
Developed Contracting States (LDCS)
NDLCS to reduce tariffs for LDCS products to 0-5
% in 3 years from contract
Established 2005

Signed 2005
India offers tariff preference of 10-50 % on 178
tariff lines (including meat, fish, salt, iodine,
Copper, chemicals, leather, newsprint, paper,
wool, wood etc)
Chile offers preference of 10-100 % on 296 tariff
lines (includes agricultural products, chemicals,
pharmaceuticals, dyes and resins, plastic, rubber,
leather, textiles, footwear, industrial products)
Afghanistan grants preferential tariff to 8
products from India including black tea,
ayurvedic and
Homeopathic medicine, other medicine, sugar,
cement
India grants preferential tariff to 38 products
from Afghanistan, mainly agricultural products
like
dry fruits

MERCOSUR is a trading bloc in Latin America that

comprises Brazil, Argentina, Uruguay and
Paraguay
MERCOSUR offers tariff concession on 452

products
India offers tariff concession on 450 products
The major products covered in Indian offer list
are meat products, chemicals, dyes and
pigments,
raw hides and skins, leather, wool, cotton, glass,
iron and steel, machinery, optical and
photographic
equipment
The major products in MERCOSUR offer list
include food, organic chemicals, pharmaceuticals,
essential oils,
plastics, rubber, tools and implements,
machinery
India Sri Lanka FTA

India, Sri Lanka

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