The Economic Survey 2011-12 was tabled by the Finance
Minister, Shri Pranab Mukherjee in the Lok Sabha.. The
Economic Survey states that during the period April 2011 - Jan 2012,
India’s cumulative exports grew at a rate of 23.5 per cent reaching US $
242.8 billion. The growth in exports, which was moving robustly at
40.6 per cent during the first half of this fiscal, began to decelerate
during the months of October and November owing to the Euro zone crisis
before recovering back to 6.7 per cent and 10.1 per cent in Dec 2011
and Jan 2012 respectively.
During April- Dec 2011, the export sectors that have done well were petroleum and oil products registering a growth of 55 per cent; gems and jewellery 38.5 per cent; engineering 21.6 per cent; cotton fabrics made ups etc. 13 per cent; electronics 21.1 per cent; readymade garments 23.7 per cent and drugs 21.5 per cent.
The Economic Survey observes that the great changes in the sectoral composition of the country’s export basket seen in the 2000’s decade have accelerated in the beginning of this decade. While the share of petroleum crude and products increased by 11.8 percentage points during the ten-year period from 2000 - 01 to 2009 -10, it further increased by 4.8 percentage points from 2009-10 to the first half of 2011-12. The share of the other two sectors, i.e. manufactures and primary products fell almost proportionately by 11.6 and 1.1 percentage points respectively during the first decade.
Imports during April - Jan 2011-12 were valued at US $ 391.5 billion, which was 29.4 per cent higher than the level of US $ 302.5 billion during the same period last year. During this period, POL (petroleum, oil and lubricant) imports at US $ 118 billion grew by 38.8 per cent while non-POL imports at US $ 273.5 billion grew by 25.7 per cent. Gold and silver imports of US $ 50 billion grew by 46.2 per cent. Trade deficit during April-Jan 2011-12 was US $ 148.7 billion as against US $ 105.9 billion during the same period in the last fiscal.
In the case of imports, there are no major compositional changes other than the sudden rise in share of gold and silver imports from 9.3 per cent in 2000-01 to 13.3 per cent in the first half of 2011-12. However, a fall in the share of pearls, precious and semi-precious stones has been observed during this period.
As regards the country’s direction of trade, the Economic Survey observes that India is a success story in terms of diversification of export and import markets. The share of Asia and ASEAN in the total trade increased from 33.3 per cent in 2000-01 to 57.3 per cent in the first half of 2011-12, while that of Europe and America fell from 42.5 per cent to 30.8 per cent. This has helped India weather the global crisis emanating from Europe and America. An interesting development in the direction of India’s trade is that USA, which was in the first position in 2007-08 has been relegated to the third spot in the following years, with the UAE becoming India’s largest trading partner, followed by China.
India’s services exports, which had recorded a contraction of 9.4 per cent in 2009-10 due to the global financial crisis bounced back to grow by 38.4 per cent to US $ 132.9 billion in 2010-11. However, growth in export of services moderated during the first half of 2011-12 to 17.1 per cent compared to 32.7 per cent during the first half of 2010-11.
Giving an outlook of the prospects for India’s trade sector which has had to bear the brunt of deepening Euro zone crisis during the second half of the current fiscal, the Survey observes that while India has successfully diversified its markets with reduced dependence on the EU and the US, Europe still has a 19.5 per cent share in India’s exports. Besides, some of India’s trading partners are dependent on Europe, thus affecting the country’s trade indirectly. The software exports too may show some sluggishness as the Euro zone accounts for 30 per cent of the total tourist arrivals in India. Travel exports may also suffer, says the Economic Survey.
The Economic Survey points out that while some of the challenges for India on the trade front are due to the current emerging global situation, the others are systemic and long-term in nature. If the global situation worsens, the pressure for stimulus measures could again resurface and protectionist measures from trading partners could increase. The Survey advises that a lot more needs to be done on diversification of India’s export basket as its export presence is limited in the top items of world trade.
It also points out that greater trade facilitation by removing the delays and high costs due to procedural and documentation factors, besides infrastructural bottlenecks is another major challenge. The Economic Survey also observes that India’s push towards regional and bi-lateral agreements should result in meaningful and result-oriented Free Trade Agreements (FTAs) and Comprehensive Economic Cooperation Agreements (CECAs). The challenges for India on the trade front are daunting but need to be addressed with speed and dexterity as the opportunities are equally great and untapped.
As regards the Special Economic Zones (SEZs), the Economic Survey states that as on 31 Dec 2011 i.e. during the first three quarters of the current financial year, the total physical exports have been to the tune of Rs. 2,60,972.90 crore, registering a growth of 14.5 per cent over the exports of corresponding period of the previous year. The total investment in SEZs till 31 Dec 2011 is Rs. 2,49,630.80 crore, including Rs. 2,31,160 crore in the newly notified zones. In a short span of about five years since the SEZs Act and Rules were notified in Feb 2006, formal approvals have been granted for setting up of 583 SEZs out of which 380 have been notified. Out of the total employment provided to 8,15,308 persons in SEZs as a whole, incremental employment generated after Feb 2006 i.e. when the SEZ Act came into force is 6,80,609 persons.
During April- Dec 2011, the export sectors that have done well were petroleum and oil products registering a growth of 55 per cent; gems and jewellery 38.5 per cent; engineering 21.6 per cent; cotton fabrics made ups etc. 13 per cent; electronics 21.1 per cent; readymade garments 23.7 per cent and drugs 21.5 per cent.
The Economic Survey observes that the great changes in the sectoral composition of the country’s export basket seen in the 2000’s decade have accelerated in the beginning of this decade. While the share of petroleum crude and products increased by 11.8 percentage points during the ten-year period from 2000 - 01 to 2009 -10, it further increased by 4.8 percentage points from 2009-10 to the first half of 2011-12. The share of the other two sectors, i.e. manufactures and primary products fell almost proportionately by 11.6 and 1.1 percentage points respectively during the first decade.
Imports during April - Jan 2011-12 were valued at US $ 391.5 billion, which was 29.4 per cent higher than the level of US $ 302.5 billion during the same period last year. During this period, POL (petroleum, oil and lubricant) imports at US $ 118 billion grew by 38.8 per cent while non-POL imports at US $ 273.5 billion grew by 25.7 per cent. Gold and silver imports of US $ 50 billion grew by 46.2 per cent. Trade deficit during April-Jan 2011-12 was US $ 148.7 billion as against US $ 105.9 billion during the same period in the last fiscal.
In the case of imports, there are no major compositional changes other than the sudden rise in share of gold and silver imports from 9.3 per cent in 2000-01 to 13.3 per cent in the first half of 2011-12. However, a fall in the share of pearls, precious and semi-precious stones has been observed during this period.
As regards the country’s direction of trade, the Economic Survey observes that India is a success story in terms of diversification of export and import markets. The share of Asia and ASEAN in the total trade increased from 33.3 per cent in 2000-01 to 57.3 per cent in the first half of 2011-12, while that of Europe and America fell from 42.5 per cent to 30.8 per cent. This has helped India weather the global crisis emanating from Europe and America. An interesting development in the direction of India’s trade is that USA, which was in the first position in 2007-08 has been relegated to the third spot in the following years, with the UAE becoming India’s largest trading partner, followed by China.
India’s services exports, which had recorded a contraction of 9.4 per cent in 2009-10 due to the global financial crisis bounced back to grow by 38.4 per cent to US $ 132.9 billion in 2010-11. However, growth in export of services moderated during the first half of 2011-12 to 17.1 per cent compared to 32.7 per cent during the first half of 2010-11.
Giving an outlook of the prospects for India’s trade sector which has had to bear the brunt of deepening Euro zone crisis during the second half of the current fiscal, the Survey observes that while India has successfully diversified its markets with reduced dependence on the EU and the US, Europe still has a 19.5 per cent share in India’s exports. Besides, some of India’s trading partners are dependent on Europe, thus affecting the country’s trade indirectly. The software exports too may show some sluggishness as the Euro zone accounts for 30 per cent of the total tourist arrivals in India. Travel exports may also suffer, says the Economic Survey.
The Economic Survey points out that while some of the challenges for India on the trade front are due to the current emerging global situation, the others are systemic and long-term in nature. If the global situation worsens, the pressure for stimulus measures could again resurface and protectionist measures from trading partners could increase. The Survey advises that a lot more needs to be done on diversification of India’s export basket as its export presence is limited in the top items of world trade.
It also points out that greater trade facilitation by removing the delays and high costs due to procedural and documentation factors, besides infrastructural bottlenecks is another major challenge. The Economic Survey also observes that India’s push towards regional and bi-lateral agreements should result in meaningful and result-oriented Free Trade Agreements (FTAs) and Comprehensive Economic Cooperation Agreements (CECAs). The challenges for India on the trade front are daunting but need to be addressed with speed and dexterity as the opportunities are equally great and untapped.
As regards the Special Economic Zones (SEZs), the Economic Survey states that as on 31 Dec 2011 i.e. during the first three quarters of the current financial year, the total physical exports have been to the tune of Rs. 2,60,972.90 crore, registering a growth of 14.5 per cent over the exports of corresponding period of the previous year. The total investment in SEZs till 31 Dec 2011 is Rs. 2,49,630.80 crore, including Rs. 2,31,160 crore in the newly notified zones. In a short span of about five years since the SEZs Act and Rules were notified in Feb 2006, formal approvals have been granted for setting up of 583 SEZs out of which 380 have been notified. Out of the total employment provided to 8,15,308 persons in SEZs as a whole, incremental employment generated after Feb 2006 i.e. when the SEZ Act came into force is 6,80,609 persons.
