india’s international trade and · 2018-11-05 · india’s international trade and investment....

India’s International Trade and Investment

Indian Economy

India’s Merchandise Trade

India’s Trade in Services

India’s Investment Flows

2

Structure of the Presentation

#

Indian Economy

India: An Emerging Economic Powerhouse

Strong Economic Fundamentals

World’s 6th largest economy based on nominal GDP in 2017 (1)

o Nominal GDP for 2017: ~US$ 2.6 trn(1)

World’s 3rd largest economy based on GDP measured in PPP terms in 2017(1)

o GDP in PPP terms for 2017: ~US$ 9.5 trn(1)

Favorable demographic profile: 66% of the population is in the age group of 15 to 64 years(2)

Sovereign rating: Baa2/Positive (Moody’s), BBB-/Stable (S&P), BBB-/Stable (Fitch)

IMF expects growth pick up in 2018 supported by strong private consumption, recovery in exports and infrastructure

investment

GDP growth forecast for 2018 at 7.3%(1) . RBI forecasts India’s GDP to grow at 7.4% in FY 19.

Implementation of demonetization and GST expected to strengthen fundamentals of the economy through

increased tax collection and greater financial inclusion

4Source: (1) IMF World Economic Outlook October 2018 Update.; (2) World Bank Database (3) RBI.

Improvement in Global Competiveness

• India’s Ranking jumped to 77th in Doing Business 2019

• India’s position jumped 23 places compared its previous ranking (100th) in Doing Business 2018

• One of the top 10 economies out of 190 to improve the most in areas of Doing Business

• Improvement in 6 parameters (out of 10): Construction permits, getting credit, protecting minority investors,paying taxes, enforcing contracts and resolving insolvency

• Ranked 3rd most prospective FDI Destination for 2017-19 by UNCTAD Business Survey 2017

• Ranked 44th in World Bank’s Logistics Performance Index 2018 among 160 countries

• Ranked 58th among 140 countries in Global Competitiveness Index (GCI) 4.0 2018

• India’s position jumped 5 places compared to its ranking (62nd ) in 2017

• BRICS Countries: China (28th), Russia (43rd), South Africa (67th) and Brazil (72nd)

• Ranked 57th among 126 economies in the Global Innovation Index (GII) 2018

• GII surveys economies using a range of metrics from patent filings to education spending

• India’s ranking rose by 3 positions from previous year, and 9 positions from 2016

5

#

India’s Merchandise Trade

Recovery in India’s Merchandise Trade

7Source: MOCI, GoI & WTO

• India’s total trade peaked in 2012-13 as a result of the increase in commodity prices

• India’s exports grew by a CAGR of 5.6% from US$ 185 billion in 2008-09 to US$ 303 billion in 2017-18.

• Trade deficit widened to US$ 162 billion in FY 18 as a result of the increased import of petroleum products (25%),gems and jewelry (38.9%) and electronic items (22.9%). These commodities accounted for 50% weightage in theimport basket of India in 2017-18.

• Also, crude oil prices increased by 18 percent in dollar terms vis-à-vis last year accounting for a widening tradedeficit.

• India’s share in global merchandise trade increased to 2.1% 2017 from 1.7% in 2009.

185 179250 306 300 314 310 262 276 303304 288

370489 491 450 448

381 384465

-118 -110 -120 -183 -190 -136 -138 -119 -108 -162

489.0 467.1619.6

795.3 791.1 764.6 758.4643.3 660.0

767.8

FY 09 FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18

US$

Bill

ion

Export Import Trade Balance Total Trade

Top Export Items (% Share) Top Import Items (% Share)

8Source: MOCI, GoI

Note: Agriculture and Allied products also include plantation and marine products

2.9

2.0

6.8

5.3

6.9

19.1

10.9

8.8

18.5

15.2

2.0

2.5

7.7

8.1

9.3

11.9

12.2

12.4

12.4

13.7

Electronic Items

Plastic & Rubber Articles

Transport Equipment

Machinery

Base Metals

Textile & Allied products

Agriculture & Allied products*

Chemicals & Related Products

Petroleum Products

Gems & Jewellery

2017-18

2011-12

2.4

2.9

3.1

5.4

5.3

7.9

8.0

7.0

18.6

31.7

3.7

3.9

5.0

5.9

6.8

8.5

8.7

11.1

16.1

23.4

Plastic and Rubber Articles

Transport equipment

Agri & Allied Products*

Base Metals

Ores & Minerals

Machinery

Chemicals

Electronics Items

Gems & Jewellery

Petroleum Products

2017-18

2011-12

India’s Merchandise Trade Basket

India’s Major Trade Partners

Top Export Destinations (% Share) Top Import Sources (% Share)

9Source: MOCI, GoI

0.9

1.2

1.4

2.6

3.0

5.5

5.9

4.2

11.7

11.4

2.2

2.6

2.8

2.9

3.2

3.4

4.4

4.9

9.3

15.8

Nepal

Viet Nam

Bangladesh

Germany

UK

Singapore

China

Hong Kong

UAE

U S A

2017-18

2011-12

3.2

3.2

2.6

3.0

3.9

7.2

7.5

6.6

4.8

11.2

2.9

3.0

3.5

3.5

3.8

4.1

4.7

4.8

5.6

16.4

Germany

Australia

Repubic of Korea

Indonesia

Iraq

Switzerland

UAE

Saudi Arabia

U S A

China

2017-18

2011-12

India’s Increasing Share in Global Merchandise Exports

Rankings Country 2005 (%) Country 2010 (%) Country 2017 (%)1 Germany 9.2 China 10.3 China 12.82 USA 8.6 USA 8.4 USA 8.73 China 7.3 Germany 8.2 Germany 8.24 Japan 5.7 Japan 5.0 Japan 3.95 France 4.4 Netherlands 3.8 Netherlands 3.76 Netherlands 3.9 France 3.4 South Korea 3.27 UK 3.7 South Korea 3.0 Hong Kong 3.18 Italy 3.6 Italy 2.9 France 3.09 Canada 3.4 UK 2.7 Italy 2.9

10 Belgium 3.2 Belgium 2.7 UK 2.511 Hong Kong 2.8 Hong Kong 2.6 Belgium 2.412 South Korea 2.7 Russia 2.6 Canada 2.413 Russia 2.3 Canada 2.5 Mexico 2.314 Singapore 2.2 Singapore 2.3 Singapore 2.115 Mexico 2.0 Mexico 1.9 UAE 2.016 Chinese Taipei 1.9 Chinese Taipei 1.8 Russia 2.017 Spain 1.8 Spain 1.7 Spain 1.818 Saudi Arabia 1.7 Saudi Arabia 1.6 Chinese Taipei 1.819 Malaysia 1.3 India 1.5 Switzerland 1.720 Sweden 1.2 UAE 1.4 India 1.721 Switzerland 1.2 Australia 1.4 Thailand 1.322 Austria 1.2 Brazil 1.3 Poland 1.323 Brazil 1.1 Malaysia 1.3 Australia 1.324 UAE 1.1 Switzerland 1.3 Saudi Arabia 1.225 Thailand 1.1 Thailand 1.3 Malaysia 1.226 Ireland 1.0 Poland 1.0 Brazil 1.227 Australia 1.0 Sweden 1.0 Viet Nam 1.228 Norway 1.0 Indonesia 1.0 Czech Republic 1.029 India 0.9 Austria 1.0 Indonesia 1.0

10Source: WTO

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Strong Services Exports

10696

125141 146 152 158 154

163

195

5260

81 77 81 79 82 8596

118

54

3644

64 6573 77 70 67

77


US$

bill

ion

Exports Imports Trade Balance

12Source: RBI Database & BoP Statistics


India’ s Services Exports ( % share) India’s Services Imports (% share)

Note: Other business services include research & development services, professional & management consulting services and technical & trade related services.Other services include personal, cultural & recreational services, government goods & services, charges for using intellectual property, maintenance & repair services andmanufacturing services..

Source: RBI BoP Statistics13

4.5

17.4

0.6

1.9

4.2

13.0

13.1

45.4

11.5

19.1

1.2

1.3

2.6

8.9

14.5

40.9

Others

Other business services

Construction

Insurance and pension services

Financial services

Transport

Travel

Telecommunications, computer,and information services

2017-18

2011-12

9.7

33.1

1.3

1.9

4.2

10.4

21.4

17.9

24.3

31.2

1.3

1.4

5.5

4.7

15.0

16.6

Others

Other business services

Construction

Insurance and pension services

Telecommunications,computer, and information…

Financial services

Transport

Travel

2017-18

2011-12

India’s Share in Global Services Exports

Ranking Country 2005 (%) Country 2010 (%) Country 2017 (%)

1 USA 14.7 USA 14.3 USA 14.5

2 UK 8.1 UK 6.9 UK 6.7

3 Germany 6.4 Germany 6.4 Germany 5.6

4 France 4.8 France 5.0 France 4.7

5 Japan 4.3 China 4.2 China 4.3

6 Spain 3.7 Japan 3.6 Netherlands 4.1

7 Netherlands 3.6 Spain 3.2 Ireland 3.5

8 Italy 3.5 Netherlands 3.0 Japan 3.5

9 China 2.9 India 3.0 India 3.4

10 Hong Kong 2.5 Hong Kong 2.7 Singapore 3.1

11 Ireland 2.3 Ireland 2.5 Spain 2.6

12 Belgium 2.2 Italy 2.5 Switzerland 2.3

13 Canada 2.2 Singapore 2.4 Belgium 2.2

14 Singapore 2.2 Belgium 2.4 Italy 2.1

15 India 2.0 South Korea 2.2 Hong Kong 2.0

16 Switzerland 1.9 Switzerland 2.1 Luxembourg 1.9

17 South Korea 1.9 Canada 1.9 South Korea 1.6

18 Denmark 1.7 Luxembourg 1.6 Canada 1.6

19 Sweden 1.7 Denmark 1.6 Thailand 1.4

20 Austria 1.7 Sweden 1.6 Sweden 1.4

14Source: WTO

#

India’s Investment Flows

16

India’s Foreign Direct Investment Flows

41.9

37.736

46.6

34.336.0

45.1

55.6

60.1 61.0

17.1 18

43.9

30.9

26.9

36.9

30.9

22.024.8

18.7


(US$

bill

ion

)

FDI Inflows FDI Outflow FDI inflow into India increased to

US$ 61 bn in FY2018, as compared

to US$ 41.9 bn in FY2009, mainly

due to the rise in equity inflows

during the period.

FDI outflow from India stood at

US$ 18.7 bn in FY2018, against

US$ 17.1 bn in FY2009.

Note: FDI Inflow & FDI Outflows include Equity, Loan and Guarantee Issued.Source: RBI


India’s FDI Inflows – FY2018 stood at US$ 44.9 bn#

17

Top FDI Investing Countries Sector-Wise FDI Inflows

#- data is for FDI equity inflow; * - Services sector includes Financial, Banking, Insurance, Non-Financial / Business, Outsourcing, R&D, Courier, Tech. Testing and Analysis

Source: DIPP

Mauritius 36%

Singapore 27%

Netherlands6%

U.S.A 5%

Japan, 4%

Germany 3%

UAE 2%

Cyprus 1%

France 1%

Others 11% Services Sector*

15%

Telecommunications

14%

Computer Software & Hardware

14%

Trading10%Construction

activities6%

Automobile Industry

5%

Power3%

Chemicals (Other Than Fertilizers)

3%

Drugs & Pharmaceutica

ls2%

Others28%


India’s FDI Outflows – FY2018 (US$ 18.7 bn)

18

Destination-wise FDI Outflows Sector-wise FDI Outflows

Singapore25%

USA20%

U.K10%Netherlands

9%

Mauritius7%

Switzerland5%

UAE5%

Russia2%

Cyprus2%

Cayman Island

2%Others

13%

Financial, insurance and

business services

30%

Manufacturing23%

Wholesale, retail trade, restaurants and hotels

12%

Transport, storage and

communication services

12%

Agriculture and mining

11%

Construction4%

Communication, social and

personal services

4%

Electricity, gas and water

3%

Others1%

Note: FDI Outflows include Equity, Loan and Guarantee Issued (Approved ODI)Source: RBI

india’s international trade and · 2018-11-05 · india’s international trade and investment....

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