Countries wise Composition of Indo Saarc trade:

Composition of Indias exports to Nepal (Table 4.23)

The export basket of India, in respect of Nepal composed of the various
commodities

namely

drugs,

pharma

and

fine

chemicals,

transport

equipment, machinery and instrument coal, manufactures of mentals,

tobacco, un-manufactured, non-basmati rice, spices, readymade garments,
cotton

yarn

fabric

made

ups,

natural

silk

yarn

fabric

made

ups,

inorganic/organic agro chemicals, plastic and linolean products, Glass/glass

ware/ceramics/cement/,

primary/semi

finished

iron

and

steel,

paints/enamels/vanishes, paper/word products, Electronic goods, carpets

handmade, cosmetics/toilet/, non-ferrous metals, sugar, machine tools,
rubber manufactured products, iron & steel bar rods, fresh vegetables, fresh
fruits, dairy products, residual chemicals & allied products, petroleum &
crude products, manmade stable fibre and oil meals.
Among those products mentioned above, the item of export, which stood
first in terms of export to Nepal, was transport equipment. According to table
4.23, the exports of transport equipment, which amounted to US $29.97 mn
in 1994-95, slightly came down to US $29.20 mn in 1999-2000, reflecting the
lowest negative compound growth rate at 2.56 in 1999-2000 over 199495.
But, between 2000-01 and 2004-05, there was a tremendous growth in
exports to Nepal, with the compound growth rate being recorded at 321.74
per cent in 2004-05 over 2000-01. During 2005-06 and 2009-10 also, the
exports of transport equipment to Nepal were high, with the compound
growth rate of exports being recorded at 177.76 per cent in 2009-10 over
2005-06.
The next item of export to Nepal, which stood second, in terms of exports to
Nepal, was primary/semi finished iron and steel. According to table 4.23, the
exports, which amounted to US $4.40 millions in 1994-95, slightly went up to
US $4.74 mn, registering a compound growth rate at 7.72 per cent in 199899 over 1994-95. But, between 1999-2000 and 2004-05, the exports to Nepal
were very high with the compound growth rate registered recorded
remarkably at 1092-45 per cent in 2004-05 over 19992000. During 2005-06
and 2009-10 also, exports were high with the compound growth of exports
being recorded substantially in respect of Nepal, at 444.63 per cent in 200910 over 2005-06.

The next item of export, which recorded third place in the export basket of
India, in respect of Nepal was machinery and instruments. According to table
4.23, the exports of machinery and instruments amounted to US $ 12.16
million during 1999-2000, as compared to US $19.02 mn 1994-95 reflecting a
negative compound growth rate at 36.07 per cent in 1999-2000 over 199495.
Unlike the above trend, the exports were very high during 2000-01 and
2004-05, with the compound growth rate being registered at 204.39 per cent
in 2004-05 over 2000-01. Between 2005-06 and 2009-10 also, similar trend
had been repeated with the exports being increased tremendously from US
$34.21 mn in 2005-06 to US $126.78 mn, reflecting a compound growth rate
at 270.59 per cent.
The next item of export that occupies fourth place in the export basket of
India was glass/glass ware/ceramics/cement.
According to table 4.23, the exports of this product were, worth US $3.75
million in 1998-98, as compared to US $4.61 mn, yielding a negative
compound growth rate at 18.65 per cent in 1998-99 over 1994-95.
Unlike the trend in exports, observed in the earlier phase, the exports to
Nepal, during 1999-2000 and 2003-04, were very high, which increased from
US $6.79 mn in 1999-2000 to US $37.68 mn in 2003-04, contributing a
remarkable compound growth rate at 454.93 per cent in 2003-04 over 19992000. Between 2004-05 and 2009-10 also, the exports to Nepal were high,
with the compound growth rate being registered at 158.35 per cent 2009-10
over 2004-05.
It was noteworthy that the product namely petroleum & crude products,
which was not exported before 2003-04, emerged as a star performer in
terms exports to Nepal, occupying a remarkable share in the export basket,
at 22.68 per cent in 200304, which in turn increased to 31.12 per cent in
2004-05 and further to 44.38 per cent in 2005-06. With regard to growth rate
also, substantial increase had been noted in respect of this product, with the
compound growth rate being recorded at 132.59 per cent in 2009-10 over
2003-04.

The other products, which registered a significant share in Indias exports

basket in respect of Nepal in 2009-10, included drugs, pharma & fine
chemicals (5.48%), manufacture of metals (2.77%), plastic & linolean
products (2.76%), paper/wood products (3.07%), and the products with
insignificant

share

in

2009-10

included

coal,

(0.96%),

tobacco

unmanufactured (1.02%), Nonbasmathi rice ()1.14%), spices (1.65%),

paints/enamels/varnishers (0.60%), and Non-ferrous metals (0.92%).
Composition of Indias exports to Sri Lanka-Product-wise (Table
4.24)
It is evident from table 4.24 that the commodity, which occupied a major
share in the export basket of India, in respect of Sri Lanka was transport
equipment. It can also be observed that the percentage share, which this
product recorded at 25.02 per cent in 1994-95, exhibited a declining trend
through out the study period with 17.87 per cent in 1998-99, with 14.63 per
cent in 2002-03 and with 13.79 per cent in 2009-10.
With regard to growth rate, it was witnessed that the exports of transport
equipment, which amounted to US $84.05 mn during 1994-95, came down to
US $64.50 mn in 1999-2000, reflecting a negative compound growth rate at
23.25 per cent in 1999-2000 over 1994-95.
Between 2000-01 and 2003-04, positive compound growth rate was
registered at 87.54 per cent in 2003-04 over 2000-01, as the exports went up
to US $148.27 mn in 2003-04, from US $ 79.06 mn 2000-01. During the last
phase of the study period, the compound growth rate of exports was
recorded at 24.84 per cent in 2009-10 over 2004-05.
The next item of export from the export basket of India, in respect of Sri
Lanka was cotton yarn fabrics, made ups.
According to table 4.24, the exports of cotton yarn in respect of Sri Lanka
amounted to US $73.69 mn in 1999-2000 compared to US $ 77.42 mn in
2000-01 slightly went up to 87.06 mn in 2004-05, contributing a compound
growth rate at 12.45 per cent in 2004-05 over 2000-01 (see table 4.25).
During 2005-06 and 2009-10, the exports of cotton yarn fabrics displayed an
upward trend, with the exports, worth of US $107.47 mn in 2005-06,

registered at US $ 193.33 mn in 2009-10, reflecting a compound growth rate

at 82.68 per cent in 2009-10 over 2005-06.
The next item of export, in 2009-10 over 2005-06 in the composition of
exports, in respect of Sri Lanka was drugs, pharma and fine chemicals.
According to table 4.24, the exports of drugs. Amounted to US $31.13 mn in
1999-2000, as compared to US $22.06 mn in 1994-95, reflecting a compound
growth rate 41.11 in 1999-2000 over 1994-95. But, it was a little bit higher
with 61.70 per cent, as recorded in 2004-05 over 2000-01, where as the
compound growth rate was a little bit lower with 57.78 per cent in 2009-10
over 2005-06.
The next item of export, whose share occupies 4 th place in Indias export
basket, in respect of Sri Lanka was machinery & instruments. According to
table 4.26, the exports of machinery and instruments amounted to US
$37.47 mn in 1999-2000, as compared to US $24.82 mn in 1994-95,
contributing a compound growth rate at 50.96 per cent in 1999-2000 over
1994-95. Between 2000-01 and 2004-05, the compound growth rate was
registered at 65.73 per cent in 2004-05 over 2000-01. During the last phase
of the study period, the compound growth rate of exports, in respect of Sri
Lanka, was recorded at 21.11 per cent in 2009-10 over 2005-06.
It was noteworthy that the product, namely petroleum and crude products
were not exported before 2003-04. But, it could register a remarkable
percentage share from, 33.63 per cent in 2005-06 to 41.84 per cent in 200708 and stood at 26.19 per cent in 2009-10. With regard to growth rate also,
the exports being doubled, with the compound growth rate being recorded at
102.89 per cent in 2009-10 over 2003-04.
The other commodities, which registered an insignificant share in Indias
export basket, in respect of Sri Lanka included finished iron & steel (3.79%),
manufacture of metals (2.04%), paper/wood products, (2.95%), man-made
yarn fabrics (3.63%), plastic & linoleum products (2.34%), fresh vegetables
(2.10%), spices (2.48%) oil meals (2.05%), cosmetics (2.28%), glass (1.00%)
pulses

(0.59%),

RMG

of

cotton

including

accessories

(0.65%),

organic/inorganic agro chemicals (1.73%), Electronic goods (1.16%) iron &

steel bar rods (0.49%), Rubber manufacture products (0.71%), marine

products (0.74%) and paints/enamels/vanishes (0.53%) at the end of 200910.

Composition of Indias exports to Pakistan (Table 4.26)
After independence, India and Pakistan signed a stand still agreement under
which goods from one country to another were exempted from customs
duty1. Between 1965 and 1875 there was trade embargo between the two
countries. A trade protocol (Simla Agreement) was signed for lifting trade
embargo with effect from December 7, 1974. India accorded MFN status to
Pakistan in 1996 and in the same year Pakistan increased its positive list of
600 items that could be imported from India 2. The present positive list of
Pakistan specifies 1075 items which are importable from India. The rest of
the items are through allowed for imports into Pakistan from India but only
against a specific import permit or license, while then items are freely
importable from rest of the world.
Despite signing of the SAFTA, exports from India to Pakistan are governed by
the positive list of imports as Pakistans bilateral import policy for India
suspends SAPTA. Currently, this issue is being discussed at various levels of
SAARC meetings. Meanwhile, in order to enhance the economic and
commercial cooperation, secretary level talks are now being held between
India and Pakistan.

Major Commodities Traded

Countr
y

Indias export
commodities

Indias import
commodities

1 Ranjit Singh, Op.cit., p.28

2 Naizil Ali, M., Foreign Trade Pattern of Pakistan,Karachi Chamber of
Commerce & Industry, 1996, p.130

Pakista
n

Organic chemicals,
cotton, plastics, and
articles there of, rubber
and articles there of,
iron & steel, Sugar, and
sugar confectionery,
edible vegetables,
mineral fuels etc.,

Edible vegetables, cotton,

edible fruits & nuts, organic
chemicals, sugar & sugar
confectionary, copper, and
articles there of, man-made
staple fibres, lead and
articles, there of, wool and
woven fibres etc.,

Composition of exports of Pakistan: - (Table 4.26)

According to table 4.28, it was observed that the commodity namely dyes &
intermediates occupies first place in the export basket of India in respect of
Pakistan.
The exports of dyes and intermediates, which amounted to
US $6.76 millions in 1994-95, went up to US $11.06 mn in 199899, reflecting
a compound growth rate at 63.61 per cent in 1998-99 over 1994-95.
Between 1999-2000 and 2002-2003, the exports in respect of Pakistan were
doubled, with the exports, amounted to US $18.73 mn in 2002-03 as
compared to US $9.31 mn in 1999-2000, contributing a compound growth
rate at 101.18 per cent in 200203 over 1999-2000. But, the growth rate was
very high

between

2003-04 and

2009-10,

as

the

exports

increase

substantially from US $69.55 million in 2003-04 to US $261.64 mn in 200910, yielding a compound growth rate at 276.18 per cent in 2009-10 over
2003-04.
The next item of export, which stood second in the export basket of India, in
respect of Pakistan was oil meals.
The exports of oil meals in 1998-99 amounted to US $24.48 mn as compared
to US $14.11 mln in 1994-95, contributing a compound growth rate at 73.49
per cent in 1998-99 over 1994-95. But, the growth rate, recorded between
1999-2000 and 2003-04, was lesser than the earlier one, as the exports
which amounted to US $19.81 mln in 1999-2000, slightly went up to US
$26.26 mn in 2003-04, contributing a compound growth rate at 32.56 per
cent in 2003-04 over 1999-2000. However, the growth rate, recorded during
2004-05 and 2009-10 was much higher than the earlier ones as the exports

were doubled, with the compound growth rate being recorded at 104.71 per
cent in 2009-10 over 2004-05.
The next item of export, which stood third in the export basket of India, in
respect of Pakistan was drugs pharma and fine chemicals. The exports of
drugs amounted to US $7.68 mln in 1997-98 as compared to US $1.52 mln in
1994-95, reflecting a substantial compound growth rate at 405.26 per cent in
1997-98 over 1994-95.
The compound growth rate of exports in respect of Pakistan, between 199899 and 2003-04, was recorded at 76.29 per cent in 2003-04 over 1998-99
and it was just recorded at 29.87 per cent in 2009-10 over 2004-05.
It was noteworthy that, the product, namely man made yarn fabrics, made
ups, which was not exported before 2003-04, exhibited a tremendous
percentage share with 14.52 per cent in 2008-09 and with 28.14 per cent in
2009-10. It is also worthy mentioning that the annual growth rate export of
this product, in respect of Pakistan was at 121.81 per cent in 2009-10 over
200809.
There was also another product, which emerged as a star performer in terms
of percentage share with 21.91 per cent in 2006-07 and with 24.73 per cent
in 2007-08.
Some products, namely gems and jewellery, processed vegetables,
and cotton entered the exports front.
The products, which registered an insignificant share of export, in respect of
Pakistan in 2009-10 were, inorganic/organic agro chemicals (2.78%), plastic
(2.58%), rubber manufactured products (2.26%), spices (1.36%), Tea
(1.26%), manufacture of metals (1.35%), machinery & instruments (1.90%),
Primary/Semi finished iron & steel (0.56%), paper/wood products (0.42%) and
fruits and vegetable seeds (0.57%).
Conclusion:
It is evident from the foregone analysis that the Saarc countries have been
able to sustain their existence as an important group in South Asia for trade
and economic cooperation. This is inspite of intra-regional political bickering

and other economic apprehensions.

Geographic, cultural, historic and

commercial ties are strong among the Saarc excepting Indo-Pak relations. All
the countries have witnessed positive trade trends.

However, intraregional

trade among the Saarc countries is comparatively lower to the intraregional

trade in respect of EU, ASEAN, etc.
India has favourable balance of trade with almost all other regional partners
in the Saarc region. A large number of goods ranging from agricultural to
manufacturing sectors are traded among these countries.

There is a

realization that there is a shortfall in the quantum of intra-regional trade

among the Saarc countries and all these countries have started deliberations
to step up the trade on part with other intraregional trade as in case of
Asean, EU, etc. The recent moves by Pakistan in easing out the list of items
and extension of MFN treatment to India - all will help pave the way for
improvement in Saarc relations.