india_foreign_trade

1 INDIA’S FOREIGN TRADE UPDATE NEWSLETTER TO INDIA’S COMMERCIAL REPRESENTATIVES ABROAD OCTOBER, 2004 ECONOMIC DIVISION DEPARTMENT OF COMMERCE MINISTRYOF COMMERCE & INDUSTRY GOVERNMENT OF INDIA NEW DELHI 2 CONTENTS Page No. Section 1 India’s Export Performance ( April-August,2004-05) Section 2 Highlights of the Foreign Trade Policy (2004-09) Section 3 Commodity and Territorial matters Section 4 Highlights of the Economic Survey, 2004 Related to External Trade Section 5 Highlights of the Budget 2004-05 related to Commerce Appendix (Tables) : Table – 1 India’s Foreign Trade in Rupee and Dollar terms Table - 2 Regionwise Exports Table – 3 Regionwise Imports Table – 4 Export of Principal Commodities in dollar terms (April-March, 2003-04) 36 35 34 32-33 26-30 31 17-25 15-16 6-14 5-5 3 Table – 5 Export of Principal Commodities in rupee terms (April-March, 2003-04) Table – 6 India’s Exports to major destination in dollar terms Table – 7 India’s Disaggregated Trade Performance ( April – March, 2003-04) Table 8: Exports by Regions and Countries: April-March, 2003-04 Table 9: Import of Principal Commodities: April-March, 2003-04 Table 10: Imports by Regions and Countries: April-March, 2003-04 50-52 46-49 43-45 39-42 38 37 4 Section-1 INDIA’S EXPORT PERFORMANCE - APRIL-AUGUST, 2004-05 India’s exports of merchandise goods during 2003-04 are valued at US $ 63.5 billion recording a growth rate of 20.4% in dollar terms. With this the target of 12% fixed for 2003-04 has been exceeded. India has achieved this in spite of an appreciating rupee during the period, global slow down, Iraq War etc. The major sectors of exports that have witnessed high export growth (10% and above), during 2003-04 include Engineering goods (35%), Gems & Jewellery (16.4%), Sports goods (28.6%), Chemical & related products excluding Residual chemicals & Allied products (24.6%), Petroleum products (36.6%), Wheat (40.6%), Processed foods (27.4%),Oil meals (131.7%), Man-made textiles made-ups etc (28.2%) and Electronic goods (34.4%). During the same period, exports to EU, constituted about 21.8% of India’s exports and registered a growth rate of 19.9 % in dollar terms. Asia and Oceania accounted for nearly 46% of India’s exports. Exports to this region witnessed a growth rate of 29.4%. Within this region, exports to China have seen a growth rate of 49.8% and this is over and above a very high growth rate in 2002-03. The growth rate of India’s exports to China was 106% in 2002-03. China and Hong Kong together accounted for about 10% of India’s exports. The single largest destination of India’s exports in this region, United Arab Emirates, accounted for 8% of India’s exports. Exports to this country have grown at a rate of 52.7%. India’s exports to Africa region that accounted for about 6% of our total exports witnessed a growth rate of 25.6%. Exports during April – August, 2004-05 are valued at US$ 27551.63 million which is 26.08 % higher than the level of US$ 21852.48 million during April –August, 200304. Imports April-August 2004-05 are valued at US$ 37137.75 million which is 30.42% higher than the level of US$ 28474.44 million during April-July 2003-04. An export target of 16% corresponding to a level of $ 73.4 billion has been fixed for the year 2004-05 which is higher than the target of 12% for the last two years. This will help exports to reach a level of $ 150 billion in 2009-10. Indian exports had crossed the $ 50 billion mark in 2002-03 and $60 billion mark in 2003-04. Now with the 16% target, exports should cross the $ 70 billion target in 2004-05. 5 Section-2 HIGHLIGHTS OF THE FOREIGN TRADE POLICY 2004-09 1. (a) Strategy: It is for the first time that a comprehensive Foreign Trade Policy is being notified. The Foreign Trade Policy takes an integrated view of the overall development of India’s foreign trade. (b) The objective of the Foreign Trade Policy is two-fold: Ø Ø to double India’s percentage share of global merchandise trade by 2009; and to act as an effective instrument of economic growth by giving a thrust to employment generation, especially in semi-urban and rural areas. (c) The key strategies are: Ø Ø Ø Ø Ø Unshackling of controls; Creating an atmosphere of trust and transparency; Simplifying procedures and bringing down transaction costs; Adopting the fundamental principle that duties and levies should not be exported; Identifying and nurturing different special focus areas to facilitate development of India as a global hub for manufacturing, trading and services. Special Focus Initiatives: (a) Sectors with significant export prospects coupled with potential for employment generation in semi-urban and rural areas have been identified as thrust sectors, and specific sectoral strategies have been prepared. (b) Further sectoral initiatives in other sectors will be announced from time to time. For the present, Special Focus Initiatives have been prepared for Agriculture, Handicrafts, Handlooms, Gems & Jewellery and Leather & Footwear sectors. 6 (c) The threshold limit of designated ‘Towns of Export Excellence’ is reduced from Rs.1000 crores to Rs.250 crores in these thrust sectors. Package for Agriculture: The Special Focus Initiative for Agriculture includes: (a) A new scheme called Vishesh Krishi Upaj Yojana has been introduced to boost exports of fruits, vegetables, flowers, minor forest produce and their value added products. (b) (c) Duty free import of capital goods under EPCG scheme. Capital goods imported under EPCG for agriculture permitted to be installed anywhere in the Agri Export Zone. (d) (e) (f) ASIDE funds to be utilized for development for Agri Export Zones also. Import of seeds, bulbs, tubers and planting material has been liberalized. Export of plant portions, derivatives and extracts has been liberalized with a view to promote export of medicinal plants and herbal products. Gems & Jewellery: (a) Duty free import of consumables for metals other than gold and platinum allowed up to 2% of FOB value of exports. (b) Duty free re-import entitlement for rejected jewellery allowed up to 2% of FOB value of exports. (c) (d) Duty free import of commercial samples of jewellery increased to Rs.1 lakh. Import of gold of 18 carat and above shall be allowed under the replenishment scheme. 7 Handlooms & Handicrafts: (a) Duty free import of trimmings and embellishments for Handlooms & Handicrafts sectors increased to 5% of FOB value of exports. (b) (c) Import of trimmings and embellishments and samples shall be exempt from CVD. Handicraft Export Promotion Council authorised to import trimmings, embellishments and samples for small manufacturers. (d) A new Handicraft Special Economic Zone shall be established. Leather & Footwear: (a) Duty free entitlements of import trimmings, embellishments and footwear components for leather industry increased to 3% of FOB value of exports. (b) Duty free import of specified items for leather sector increased to 5% of FOB value of exports. (c) Machinery and equipment for Effluent Treatment Plants for leather industry shall be exempt from Customs Duty. Export Promotion Schemes: (a) Target Plus: A new scheme to accelerate growth of exports called ‘Target Plus’ has been introduced. Exporters who have achieved a quantum growth in exports would be entitled to duty free credit based on incremental exports substantially higher than the general actual export target fixed. (Since the target fixed for 2004-05 is 16%, the lower limit of performance for qualifying for rewards is pegged at 20% for the current year). 8 Rewards will be granted based on a tiered approach. For incremental growth of over 20%, 25% and 100%, the duty free credits would be 5%, 10% and 15% of FOB value of incremental exports. (b) Vishesh Krishi Upaj Yojana: Another new scheme called Vishesh Krishi Upaj Yojana (Special Agricultural Produce Scheme) has been introduced to boost exports of fruits, vegetables, flowers, minor forest produce and their value added products. Export of these products shall qualify for duty free credit entitlement equivalent to 5% of FOB value of exports. The entitlement is freely transferable and can be used for import of a variety of inputs and goods. (c) ‘Served from India’ Scheme: To accelerate growth in export of services so as to create a powerful and unique ‘Served from India’ brand instantly recognized and respected the world over, the earlier DFEC scheme for services has been revamped and re-cast into the ‘Served from India’ scheme. Individual service providers who earn foreign exchange of at least Rs.5 lakhs, and other service providers who earn foreign exchange of at least Rs.10 lakhs will be eligible for a duty credit entitlement of 10% of total foreign exchange earned by them. In the case of stand-alone restaurants, the entitlement shall be 20%, whereas in the case of hotels, it shall be 5%. Hotels and Restaurants can use their duty credit entitlement for import of food items and alcoholic beverages. 9 (d) EPCG: Ø Ø Ø Ø Ø Additional flexibility for fulfillment of export obligation under EPCG scheme in order to reduce difficulties of exporters of goods and services. Technological upgradation under EPCG scheme has been facilitated and incentivised. Transfer of capital goods to group companies and managed hotels now permitted under EPCG. In case of movable capital goods in the service sector, the requirement of installation certificate from Central Excise has been done away with. Export obligation for specified projects shall be calculated based on concessional duty permitted to them. This would improve the viability of such projects. (e) DFRC: Import of fuel under DFRC entitlement shall be allowed to be transferred to marketing agencies authorized by the Ministry of Petroleum and Natural Gas. (f) DEPB: The DEPB scheme would be continued until replaced by a new scheme to be drawn up in consultation with exporters. New Status Holder Categorization: (a) A new rationalized scheme of categorization of status holders as Star Export Houses has been introduced as under: Category One Star Export House Two Star Export House Three Star Export House Four Star Export House Five Star Export House Total performance over three years 15 crores 100 crores 500 crores 1500 crores 5000 crores 10 (b) Star Export Houses shall be eligible for a number of privileges including fast-track clearance procedures, exemption from furnishing of Bank Guarantee, eligibility for consideration under Target Plus Scheme etc. EOUs: (a) EOUs shall be exempted from Service Tax in proportion to their exported goods and services. (b) (c) EOUs shall be permitted to retain 100% of export earnings in EEFC accounts. Income Tax benefits on plant and machinery shall be extended to DTA units which convert to EOUs. (d) (e) Import of capital goods shall be on self-certification basis for EOUs. For EOUs engaged in Textile & Garments manufacture leftover materials and fabrics upto 2% of CIF value or quantity of import shall be allowed to be disposed of on payment of duty on transaction value only. (f) Minimum investment criteria shall not apply to Brass Hardware and Hand-made Jewellery EOUs (this facility already exists for Handicrafts, Agriculture, Floriculture, Aquaculture, Animal Husbandry, IT and Services). Free Trade and Warehousing Zone: Ø A new scheme to establish Free Trade and Warehousing Zone has been introduced to create trade-related infrastructure to facilitate the import and export of goods and services with freedom to carry out trade transactions in free currency. This is aimed at making India into a global trading-hub. Ø Ø Ø FDI would be permitted up to 100% in the development and establishment of the zones and their infrastructural facilities. Each zone would have minimum outlay of Rs.100 crores and five lakh sq. mts. built up area. Units in the FTWZs would qualify for all other benefits as applicable for SEZ units. 11 Import of Second hand Capital Goods Ø Ø Import of second-hand capital goods shall be permitted without any age restrictions. Minimum depreciated value for plant and machinery to be re-located into India has been reduced from Rs.50 crores to Rs.25 crores. Services Export Promotion Council: An exclusive Services Export Promotion Council shall be set up in order to map opportunities for key services in key markets, and develop strategic market access programmes, including brand building, in co-ordination with sectoral players and recognized nodal bodies of the services industry. Common Facilities Centre: Government shall promote the establishment of Common Facility Centres for use by home-based service providers, particularly in areas like Engineering & Architectural design, Multi-media operations, software developers etc., in State and District-level towns, to draw in a vast multitude of home-based professionals into the services export arena. Procedural Simplification & Rationalisation Measures: Ø All exporters with minimum turnover of Rs.5 crores and good track record shall be exempt from furnishing Bank Guarantee in any of the schemes, so as to reduce their transactional costs. Ø Ø Ø Ø All goods and services exported, including those from DTA units, shall be exempt from Service Tax. Validity of all licences/entitlements issued under various schemes has been increased to a uniform 24 months. Number of returns and forms to be filed have been reduced. This process shall be ontinued in consultation with Customs & Excise. Enhanced delegation of powers to Zonal and Regional offices of DGFT for speedy and less cumbersome disposal of matters. 12 Ø Time bound introduction of Electronic Data Interface (EDI) for export transactions. 75% of all export transactions to be on EDI within six months. Pragati Maidan: In order to showcase our industrial and trade prowess to its best advantage and leverage existing facilities, Pragati Maidan will be transformed into a world-class complex. There shall be state-of-the-art, environmentally-controlled, visitor friendly exhibition areas and marts. A huge Convention Centre to accommodate 10,000 delegates with flexible hall spaces, auditoria and meeting rooms with high-tech equipment, as well as multi-level car parking for 9,000 vehicles will be developed within the envelope of Pragati Maidan. Legal Aid: Financial assistance would be provided to deserving exporters, on the recommendation of Export Promotion Councils, for meeting the costs of legal expenses connected with trade-related matters. Grievance Redressal: A new mechanism for grievance redressal has been formulated and put into place by a Government Resolution to facilitate speedy redressal of grievances of trade and industry. Quality Policy: Ø Ø Ø DGFT shall be a business-driven, transparent, corporate oriented organization. Exporters can file digitally signed applications and use Electronic Fund Transfer Mechanism for paying application fees. All DGFT offices shall be connected via a central server making application processing faster. DGFT HQ has obtained ISO 9000 certification by standardizing and automating procedures. 13 Bio Technology Parks Biotechnology Parks to be set up which would be granted all facilities of 100% EOUs. Co-acceptance/ Avalisation introduced as equivalent to irrevocable letter of credit to provide wider flexibility in financial instrument for export transaction. Board of Trade: The Board of Trade shall be revamped and given a clear and dynamic role. An eminent person or expert on trade policy shall be nominated as President of the Board of Trade, which shall have a Secretariat and a separate Budget Head, and will be serviced by the Department of Commerce. 14 Section-3 COMMODITY AND TERRITORIAL MATTERS 1. India-Nepal Inter-Governmental Committee meeting on Trade, Transit and Cooperation to Control Unauthorized Trade at the level of Commerce Secretaries was held at Kathmandu on January 29-31, 2004. 2. With a view to enhance India’s trade with countries of the CIS region the scope of the Focus: CIS Programme was extended w.e.f. April, 2004 to include Russian Federation, Armenia, Balarus, Georgia and Moldova. Therefore, the programme in effect covers all the 12 CIS countries 3. Focus ASEAN+2 Programme Department of Commerce had earlier launched programmes, viz. Focus LAC (for Latin American Countries), Focus Africa and Focus CIS in 1997, 2002 and 2003 respectively with a view to promoting Indian exports to these regions. Specific funds were allocated from the MDA Scheme for providing assistance to Export Promotion Councils, Commodity Boards and exporters in their efforts to enhance India’s exports to these regions. While reviewing and deciding the extension of these programmes for the year 2004-05, it was decided to launch similar programme aimed at promoting Indian exports to the countries in the ASEAN region and Australia and New Zealand under the name “Focus ASEAN+2 Programme”. The programme has since been put in operation from April, 2004. Focus ASEAN+2 programme aims at providing financial assistance to individual exporters, Councils, Commodity Boards, etc. by way of giving travel grant and meeting a part of their expenditure for organizing and participation in export promotion activities, both abroad and in India, like fairs/exhibitions, buyerseller meets, awareness seminars, etc., etc. under Market Development Assistance Scheme. 15 4. An interaction with the Chinese International Contractors Association (CHINCA) delegation was held on 1st June 2004 in New Delhi. The OCCI participated in this interaction. The main purpose of the visit was to exchange general information and look at the possibilities of co-operation for some projects world-wide. 5. A composite MERCOSUR delegation visited India from June 24th to June 26th 2004 for the second round of negotiations to finalize the annexes to the Preferential Trade Agreement(PTA) signed between India and MERCOSUR on January 25, 2004. All the annexes to the PTA, namely the two lists of products on which tariff preferences are to be given, the text on Rules of Origin, Safeguard Measures and Dispute Settlement were discussed at length and considerable progress was achieved in improving the text of the above annexes during this round of negotiations. A digital Video Conferencing on PTA between India and MERCOSUR is proposed to be held on August 20, 2004. Anti-Dumping Since 1992 till 31.03.2004 the Directorate General of Anti-Dumping and Allied Duties (DGAD) has initiated Anti-dumping investigations into 167 cases involving 53 countries. The countries prominently figuring in Anti-dumping investigations are China, EU, Korea, Taiwan, Japan, USA, Singapore, Russia etc. The major product categories on which Anti-dumping duty has been levied are Chemicals & Petrochemicals, Pharmaceuticals, Fibres/Yarns, Steel and other Metals and Consumer Goods. 16 Section-4 HIGHLIGHTS OF THE ECONOMIC SURVEY, 2004 RELATED TO EXTERNAL TRADE GENERAL Real Gross Domestic Product is estimated to have grown by 8.1% in 2003-04. A growth rate higher then 8% has been achieved in past in only three years. There has been a strong agriculture recovery of 9.1% from the drought affected previous year. The industry and services sector are expected to grow by 6.5% and 8.4%, respectively in 2003-04. Inflation, as measured by wholesale price index (WPI) was 4.6% at end March 2004 over an March 2003, and 5.5% on average. Fiscal deficit of the central government was budgeted at 5.6% of GDP in 2003-04 and revenue deficit at 4.1% of GDP. EXTERNAL SECTOR Global Economic Environment According to WTO, world merchandise trade rebounded to 3.0 % in 2002 and grew somewhat faster at 4.5 % in 2002. The trade recovery in 2002 and 2003 benefited from strong import demand in developing Asia, the transition economies and the United States. The most dynamic trading regions in 2003 were Asia and the transition economies. The rebound in global trade was, however, stronger in nominal terms with value of world merchandise exports registering a rise of around 16.0% in 2003. After recording current account surplus in 2001-02, 2002-03, the BOP estimates for the first nine months of 2003-04 also indicates a current account surplus (According to RBI, it is 8.7 billion US dollars for the full year). Selected Indicators of Growth Considering exports as percentage of GDP it is observed that it has gone up from 17 9.4% in 2001-02 to 10.3% in 2002-03. Similarly, imports as a percentage of GDP has also increased from 12.0% in 2001-02 to 12.8% in 2002-03. In spite of the increase in both exports and imports as a percentage of GDP the trade deficit as a percentage of GDP has come down from 2.6% in 2001-02 to 2.5 in 2002-03. The robust foreign exchange reserve position is reflected in the fact that import cover of foreign exchange reserves has substantially increased from 11.3 months in 2001-02 to 13.8 months in 2002-03 to 16.2 months in 2003-04. While China has increased its share in world trade significantly from 3.9% in 2000 to 5.9% in 2003 that of Malaysia, Indonesia and Thailand has more or less remained same during the same period. India’s share has increased from 0.7% in 2000 to 0.8% in 2003. While China and India were the only countries registering double digit export growth in 2002. In 2003 this feet was achieved by many competitors like Singapore, Thailand and Korea. Exports of Merchandise Goods Between 2000 and 2003, India’s exports have increased by around 32% as compared to a rise of around 17% in world exports, suggesting some improvement in overall competitiveness of Indian exports. In 2002, India emerged amongst leading exporting nations as the world’s fastest growing exporter after China. The growth in exports has been broadly maintained in 2003, resulting in retention of India’s share in world exports at 0.8%. Currently India is 31st leading exporter and 24th leading importer in world merchandise trade. India’s exports witnessed a sharp turn around to 20.3% in 2002-03 from a decline of 1.6% in 2001-02. Almost the entire increase was accounted for by higher volume of exports, with unit price of exports remaining sluggish. Recovery on international commodity prices, movements in cross currency exchange rates, a faster repatriation of export proceeds and various policy initiatives for export promotion and market diversification contributed to the upsurge. The growth in exports by 17.1% in 2003-04 provided significant support to domestic demand during the year. Export growth seemed to have been dampened in the first half of 2003-04 by weak demand, SARS related concerns etc, recovered in the second half because of improved global growth and firming up of domestic manufacturing activity, the strong export performance is also a measure of India’s growing export competitiveness, especially in view of the gradually appreciating nominal value of the 18 rupee vis-à-vis the US dollar during this period. Export growth continues to be robust in the current fiscal, with exports growing by 24.9% in April- May 2004. Some important sectors showing Industrial growth and export growth The major contributor to export growth in 2002-03 was the manufacturing sector. Major traditional exports like textiles including garments, gems & jewellery, engineering goods, chemicals, etc. Other important features of the export performance included a turn around in exports of agriculture and allied products and manufactured goods, a surge in exports of ores and minerals and growth in exports of petroleum products. The trends broadly continued in 2003-04. Exports of leather manufacturers also witnessed a turn around in 2003-04. Automobiles Assisted by low interest rates, growth in consumer finance and strong export demand, the automobile industries is experiencing sound growth. Automobile export registered a robust growth of 55.9% during 2003-04 consisting of both finished automobiles and components. A host of major international automobiles companies are using India as a platform for export oriented production. (This is announced by the Department of Commerce). Gems & Jewellery The export of G&J registered a growth of 19% during 2003-04. In order to give the boost to the export of gems & jewellery the government focussed on reducing the barriers to imported raw materials during 2003-04. Textiles Textile exports performed well during April-February, 2003-04 except cotton textiles. The reforms in indirect taxes i.e. introduction of CENVAT reduction in import duties and technological upgradation will help improve our export competitiveness in the post quota regime. one of the important potential sectors identified in the Medium Term Export Strategy 2002-07 19 The termination of the Agreement on Textiles and Clothing (ATC) on January 1,2005 holds great potential for contributing to rapid growth of the textile industry, the largest industry in terms of employment. Services Exports The trend is consistent with that of most economies of developing Asia like Indonesia, Malaysia, Philippines and Thailand. Since 2001-02, surpluses in both, the current and capital accounts have resulted in larger overall surpluses, which have led to accumulation in the foreign exchange reserves of the country. The trends indicate that fast growing invisibles and non-debt creating foreign investment inflows are the main factors behind accumulation of foreign exchange reserves. The non-factor services to the invisibles account has been increasing steadily since 2001-02. In the year 200304 net inflows from software services have crossed US dollar 9.0 billion, travel and transportation have recorded net positive inflows during April - December 2003-04, exports of IT enabled and Business Process Outsourcing (BPO) services have increased significantly in recent years. Growth in tourism and tourism-related services, such as hotels, holds a large potential for employment generation. The critical challenges facing Indian economic policy consists in devising strategies for sustained industrial growth in excess of 10% per year. Imports There was a broad based rise in imports in 2002-03 of consumer goods, raw material, intermediate goods and capital goods around 85% of the increase in imports in absolute terms during the year was accounted for by higher import of POL, electronic goods, pearl, precious & semi precious stones, capital goods and edible oil. Imports continued to surge in 2003-04, powered by strong import demand for capital goods, raw materials, and intermediate goods, enforcing the positive outlook for the domestic economy as whole and manufacturing sector in particular. Overall 82% of the incremental imports in absolute terms during this period were accounted for by higher import of gold and silver, POL, electronic goods, capital goods, chemicals, pearls, precious & semi precious stones and edible oil. According to the survey ‘ the robust growth in capital goods imports, along with a buoyant growth in domestic capital goods production mainly reflects a revival of investment demand’. 20 Some Issues Related to Exports Appreciation of the Rupee The export growth in 2003-04 has coincided with the strengthening of the rupee vis-à-vis the US dollar. The Indian rupee, which started strengthening from June 2002 onwards, on monthly average basis, had appreciated 8.8% by March 2004. While the rupee, appreciated against the US dollar in 2003-04, it depreciated against the currencies of major non-dollar trading partners. was not high. While the profit margin of some exporters, especially of traditional goods with low import content and high value addition, may have been impacted adversely by the hardening of the strong rupee, it would have brought down the cost of imported inputs for other exporters with a high import-content in their exports, along with gains to borrowers of foreign currency and a fall in the rupee value of external debt. The impact of real appreciation of the rupee on exports also depends on productivity growth. This may necessitate domestic reforms and reduction in tariff, which could also help check further strengthening of the rupee. Constraints on productivity like infrastructure bottlenecks, labour law and SSI reservations need to be addressed. Exporters need to pay more attention to non-price factors such as product quality. Export strategy needs to focus more on easing supply side constraints and providing infrastructure and institutional support to exporters. Export Credit Initiatives taken by the Government include export credit target of 12% of Net Bank Credit (NBC), reduction of Prime Lending Rate (PLR) linked ceiling rates and providing pre-shipment and post shipment credit either in rupee or in foreign currency from banks in India. Banks are permitted to extend foreign currency loan to exporters with a ceiling of LIBOR plus 0.75% and PLR plus 2.5% for rupee loans. Banks have been permitted to use foreign currency funds borrowed from abroad. RBI announced Gold Card Scheme on May, 27th, 2004 to facilitate easy availability of export credit for credit worthy exporters. There has been an acceleration of export credit in 2003-04. It increased to Rs.57687 crore on March 19,2004. Reserve Bank of India in consultation Further, the relative appreciation of the rupee 21 with select banks and exporters announced a Gold Card Scheme on May 27,2004 to facilitate easy availability of export credit for credit worthy exporters ( Export credit as a percent of Net Bank Credit increased from 7.3% on March 21, 2003 to 7.5% on March 19,2004. However deceleration in this indicator since 2000 can be seen as the figure in March 2000 was 9.8%, in March 2001 9.3% and in March 2002 it was 8%. We have to go a long way to achieve the 12% goal ). Non-Tariff Measures (NTMs) Growing use of unconventional NTMs has become a major barrier to market access to exports from developing countries. According to one estimate, about 35% of India’s total exports to USA in value terms faced NTMs in 2002, with their incidence in other developed countries being more or less similar (this refers to the study conducted by the Economic Division, Department of Commerce on Non Tariff Barriers). Policies of DOC Macro and sector-specific policies were formulated in the Union Budget 2003-04, Exim Policy and various Departmental schemes to enhance manufacturing sector efficiency, including promotion of exports and further acceleration of the reform process. This included provision of fiscal incentives to important designated industries like textiles, pharmaceuticals, telecom, biotechnology, gems & jewellery and IT industry. Suitable thrust was also provided to areas of core competence in exports, like services and agro exports. Additional fiscal incentives and trade facilitation measures to help exports were announced in January, 2004. Small Scale Industry There is need for stepped up investment in manufacturing. A better alignment of banks’ lending rates with deposit rates through increased competition and better NPA resolution will strengthen the process. Small and medium scale enterprises are critical for industrial development. The progress in gradually dismantling the reservation policy observed over recent years should continue and policy of protection through reservation should be replaced by promotion as the cornerstone of future policy. Adequate supply of credit, services, technology assistance and infrastructure, and low transaction costs are aspects upon which this promotion policy should focus. 22 Diversification of Markets Greater diversification of markets has been an important factor in sustaining export growth. Recent measures taken in this direction included the expansion of the “Focus Africa” programme to include the remaining 11 countries of the region and the launching of “Focus CIS” Programme from April 1, 2003. The enlargement of EU from May 1, 2004 is likely to facilitate greater market access for Indian exports to the ten accession countries. Signing of Framework Agreement for Economic Cooperation between India and the ASEAN and bilateral agreement between India and Thailand, will help in diversifying trade and economic cooperation. Bilateral agreements with Bangladesh, Afghanistan, Myanmar, South Africa and Mercosur ( Argentina, Brazil, Paraguay and Uruguay) are currently under, consideration. The January 2004 agreement on setting up of a SAFTA ( South Asian Free Trade Area) by the SAARC member countries, is also likely to provide a fillip to trade growth with this region. India along with Bhutan, Myanmar, Sri Lanka, Thailand and Nepal have signed the Framework agreement on the BIMST-EC free Trade Area in February, 2004. European Union Enlargement – Impact on India The survey analyses the impact of the recent enlargement of European Union. The European Union has been enlarged from May 1, 2004. The enlargement is not expected to increase sharply the shares of trade between the EU(15) countries and the acceding countries (ACs), as most of the trade re-orientation has already taken place under the umbrella of the Europe Agreements. Significant trade diversion for India following the enlargement of EU is unlikely. The removal of quota restrictions for textiles and clothing from January, 2005 may also work to India’s advantage, since it will reduce the protection presently available to Acceding Countries (ACs) exports in the EU market. The enlarged EU may also spur joint ventures with Indian companies looking forward to setting up manufacturing bases in the low cost ACs. However, the relative competitive advantage of many of India’s exports to the EU (15) may be impacted by the enlargement of EU, as countries like Poland and Czech Republic compete with India in selling textiles and apparel, footwear and leather, chemical compounds, iron and steel, automotive parts, etc. India may also face stiffer 23 competition on account of temporary movement of its natural persons to EU and business process outsourcing by EU to India. WTO Issues The survey also analyses the WTO issues. Progress under the Doha round so far has been slow, putting a question mark on the feasibility of a timely completion of the Round (“not later than” January 1, 2005). The fifth WTO Ministerial meeting, held at Cancun, Mexico during September 10-14, 2003, ended without any agreement, reflecting serious polarization of views and positions. India emerged as a key player in this Ministerial. India participated in the Cancun Ministerial proactively, forging very useful and effective coalitions, bringing the concerns of developing countries centre-stage. It played a key role in forming two important coalitions viz. G-20 on agriculture and G-16 on Singapore issues. India sought elimination of distortions in world agriculture created through high level of subsidies in the developed countries. The net effect of subsidizing agriculture in developed countries at the expense of products of the relatively poor in developing countries was to aggravate global income inequalities. Urgent need to bring down the high tariffs and non tariff barriers on products of export interest to developing countries was also underlined. India reiterated its opposition to any form of harmonization of tariffs in agriculture. India was also opposed to any mandatory binding (zero-for-zero)of tariff in suggested seven sectors (auto components, fish & fish products, textiles, gems & jewellery, leather products and electric and electronic goods), as countries, being in various stages of development lacked the capacity to undertake such binding commitments in all the proposed sectors. On Singapore issues, it was reiterated that WTO is not the right forum for these issues. Regarding the services negotiations & India, it was pointed out that while liberalisation of certain sectors was essential to accelerate growth in developing countries, there was need to tread with caution in other sensitive sectors. The current efforts are to conclude a package agreement by July, 2004. This could include frame work agreements on Agriculture and Non-Agricultural market Access which could expand on the Doha Mandate and lay down broad principles for future negotiations of detailed modalities. On Singapore issues, the emerging consensus 24 appears to be in the direction of finalization of modalities for negotiations on trade facilitation by ‘explicit consensus’ whereas the other three issues of investment, Competition and Transparency in Government procurement would cease to be part of the Doha agenda. The proposed July package is also expected to cover Implementation issues and issues relating to Special and Differential Treatment. Outlook The latest world economic outlook of the IMF (April 2004) projects world trade growth to rebound sharply in 2004 and maintain its upbeat trend in 2005. US economy is poised to bounce back on a high growth path in 2004. Economic activity continues to remain sluggish in the Euro area and the Japanese economy is projected to achieve its highest growth since 1996 in the year 2004. Growth prospects for emerging market economies are dominated by bright projections for developing Asia at 7% plus in 2004. China would continue to be the main driver of economic momentum in developing Asia due to rising exports and domestic investments. India is also expected to contribute substantially to the robust outlook for developing Asia. The upbeat global trade expectations are expected to positively impact the exports of most developing Asian economies in the current year. The downside risks consist of large current account and fiscal deficits in the US economy, likelihood of an increase in the global interest rates, persisting high level of global crude prices, timing and sequencing of the policy induced slow down of the ‘over heated’ Chinese economy. Further optimism about global trade growth also hinges on the successful resolution of the roadblocks encountered at the failed talks in Cancun. India is already being seen as a new hub for exports of auto parts and other engineering goods and opportunities are expected to open in the textile sector after the phasing out of textile quota next year. 25 Section-5 HIGHLIGHTS OF THE BUDGET, 2004 – 05 RELATED TO COMMERCE General : The guiding light of the Union Budget 2004-05 is the National Common Minimum Programme which inter-alia spells out the clear economic objectives of maintaining the growth rate of 7 to 8% per year; universal access to quality basic education and health; generating employment in agriculture; manufacturing and services; minimum 100 days employment to bread winner at minimum wage; focusing on agriculture and infrastructure; accelerating fiscal consolidation, reform and higher and more efficient fiscal devolution. Ø It is proposed to levy an education cess of 2% on income tax, corporation tax, excise duty, custom tax and service tax. Ø It is proposed to raise the sectoral cap for FDI in telecommunication from 49% to 74%; in civil aviation 40% to 49%; and in insurance from 26% to 49%. Besides the government proposes to set up a National Manufacturing Competitiveness Council and establishment of an Investment Commission. Ø Given the need for giving space to SSI units to grow into Medium Enterprises the Ministry of SSI has identified 85 items that can be safely taken out from the reserved list. Measures have been introduced for technology upgradation of SSI. Ø Peak rate of custom duty to be maintained at 20%. However, the 2% cess will be applicable on the customs duty also. The impact of this would be a hike in basic customs duty to slightly less than 1% for the lowest slab of 20%. Though for higher slabs it will be higher than this. However, the calculations involved in including the cess on customs duty lead to decimals at each stage. Agriculture and Allied products : Ø The concessional rate of custom duty of 5% has been extended to more items pertaining to the tea and coffee plantation sector. 26 Ø Tractors, dairy machinery, hand tools which currently attract a 16% excise duty will be fully exempt. Ø Excise duty on preparation of meat, poultry and fish has been reduced from 16% to 8%. Ø In order to promote agro-processing industries, a deduction of 100% of profits for 5 years and 25% of profits for the next 5 years has been made in the case of new agro processing industries set up to process, preserve and package fruits and vegetables. These measures will bring in fresh investment in the agro processing industries. Ø Custom duty on crude palm oil to be retained at 65% and that on refined palm oil to be increased to 75%. Excise duty on food grade hexane (used in edible oil industry) to be reduced from 32% to 16%. Share of edible oil in the total imports increased from 2.9% in April-February, 2002-03 to 3.4% in corresponding period of the year 2003-04. Edible oil import grew at a rate of 46.8% in the period April-February, 2003-04, over the corresponding previous period. Higher import of edible oil could be attributed to lower domestic production following the drought in 2002-03. This measure will encourage the production of edible oil in the country and reduce dependence on edible oil imports. Besides, the government will look into promoting superior seed technology and an appropriate policy of price support for facilitating diversification into oil seeds. Ø Budget allocation for research and development in agriculture has been enhanced to expand new frontiers in bio-technology, vaccine and diagnostics. Ø Additional capital will be provided to the Small Farmers Agri Business Consortium ( SFABC) to aggressively promote agri businesses. Ø It is proposed to launch a National Horticulture Mission to promote diversification into horticulture, floriculture and oil seeds on the lines of the Anand model. The above measures will help the Agro Processing Industries in general and Agro Exports in particular. 27 Industry : Ø Automobile industry has been notified as an industry entitled for 150% deduction of expenditure on in-house R&D facilities . This measure will encourage the industry to move higher up in the value chain and also encourage R&D intensive foreign investment. The Finance Ministry has yet to clarify whether the components manufacturers are eligible for the proposed tax break on R&D expenses Ø The custom duty on non alloy steel has been reduced from 15% to 10% and the excise duty on steel has been increased from 8% to 12% so that the countervailing duty will also be applicable to imports. Despite the reduction in custom duty the landed price of imported steel is higher than the domestic price of steel. Hence, domestic producers are unlikely to be affected on this account. But the increase in excise duty has affected the steel industry. Prices of steel have already risen. (Government has recently announced a reduction in custom duty on non-alloy steel, other than seconds and defectives from 10% to 5%. The Government has also exempted some steel categories from custom duty. This measure is aimed at reigning in inflation). Ø Import duty on platinum reduced from Rs.550 per 10 gms to Rs.200. Rough coloured precious gems stones to be exempt from custom duty at the first stage itself instead of claiming reimbursements later. Rough semi precious stones are already exempt. This will further increase the exports of studded jewellery and platinum jewellery. Ø Concessional custom duty of 5% on capital goods enjoyed by the leather industry to be extended to non-leather footwear industry also. Finished leather of all kinds is exempt from custom duty. Patent leather has also been exempted from custom duty. Exports of leather and manufactures also witnessed a turn around in 2003-04 after two years of declining growth trend. The measures in this years budget to bring patent leather and non leather footwear incentives at par with leather will boost exports of this sector. Long standing demand of leather industry has to be heeded to. Ø The cotton textile industry has been freed from the mandatory cenvat duty. Every segment of the industry handloom, Powerloom and Composite mills - has 28 been allowed to choose between complete exemption from payment of excise duty or taking the cenvat route. The immediate benefit of this innovative scheme is that it creates a level playing field between the decentralized and the organized composite mill sector. This was not the case earlier as powerloom sector was exempt from excise duty while mill sector was not. This had seriously disadvantaged mill sector leading to widespread sickness. The manufacturers of manmade fabrics and filament yarn, including textured yarn, however, would still remain under the mandatory cenvat scheme. This measure could however reduce relatively the export competitiveness of Indian fabrics and garments made from man-made fibre. The measures announced in the budget will provide relief to lakhs to handlooms and powerlooms spread all over the country, the textile clusters and also the mill sector. All these measures will go a long way to make our textile sector more efficient and competitive. It will gear up the textile industry to face the challenges thrown open by the phasing out of quotas at the end of December, 2004. International studies have already indicated that the major beneficiaries of phase out of MFA will be China & India. Ø Computers attract excise duty of 8 percent. It is proposed to grant them full exemption. Thus, besides domestic computers, even foreign computers will be cheaper as there will be zero countervailing duty on computer. Infrastructure and Services: Ø IDBI, IDFC, ICICI bank, SBI, LIC, Bank of Baroda and Punjab National Bank have formed an Inter-Institutional Group (IIG). They will pool their resources on a callable basis and a sum of Rs.40,000 crore will be made available as and when necessary. The IIG will ensure speedy conclusion of loan agreements in major infrastructure projects like Air ports, Sea ports and Tourism. Ø The shipping industry has demanded the levy of a tonnage tax to make it internationally competitive. The concessional regime under Section 33 AC will be withdrawn and shipping companies will have an option to pay the tonnage tax or normal corporate tax on profits. The new regime taxes shipping companies on the basis of the tonnage of their ships and the number of days for which the ships have been in operation. The new system is considered to deliver increased foreign investment to Indian Shipping Companies. Tonnage tax is an easy and 29 low-tax regime where in total tax liability could fall to the international norm of 12% against the 10-14% effective tax rate as of now. Tonnage tax is a win-win situation for both the government and the industry. The government is assured of a steady tax revenue whether the shipping line concerned is earning profit or not. The industry anyway stands to gain from low tax rates. It has been made mandatory for all shipping companies to plough back a minimum 20% of their book profits to fund vessel acquisition. Thus, shipping which is a major service sector as well as a means for carrying goods will benefit. Ø Government will facilitate the construction of an International Container Transshipment Terminal (ICTT) at Vallarpadam in Kochi Port on Build, Operate and Transfer (BOT) basis. Presently, due to inadequate draft and cargo handling infrastructure, main line vessels often skip Indian ports. Containers from India are carried to their final destination after Transshipment at Colombo, Dubai and other neighbouring ports. ICTT will help in the development and expansion of port infrastructure in India. This is a very good step and if implemented quickly can help in not only the facilitation of trade but also save foreign exchange which now goes to Colombo and other ports in the form of transshipment charges. Ø Specified items for manufacture of telecom grade optical fibres and cables are also proposed to be exempt from customs duty. Mobile switching centers imported by cellular mobile telephone service providers are now exempt from customs duty. This is proposed to be exempted for imports by universal access service providers. 30 APPENDIX Tables : 1-7 31 TABLE 1: INDIA'S FOREIGN TRADE (Rs Crore) YEAR EXPORTS GROWTH RATE 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04(P) 2003-04 (April-Aug) 2004-05(P) (April-Aug) contd… 125199.79 22.80 168690.71 26.94 -43490.92 69751 82674 106353 118817 130101 139753 159561 203571 209018 255137 291582 101956.20 29.9 18.5 28.6 11.7 9.5 7.4 14.2 27.6 2.7 22.06 14.28 73101 89971 122678 138920 154176 178332 215236 230873 245200 297206 353976 132887.41 IMPORTS GROWTH RATE 15.3 23.1 36.4 13.2 11.0 15.7 20.7 7.3 6.2 21.21 19.10 TRADE DEFICIT -3350 -7297 -16325 -20103 -24075 -38579 -55675 -27302 -36182 -42069 -62394 -30931.21 32 (US$Million) YEAR EXPORTS GROWTH RATE 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04(P) 2003-04 (April-Aug) 2004-05(P) (April-Aug) (P) Provisional data. data 27551.63 26.08 37137.75 30.42 -9586.12 22237 26330 31797 33470 35006 33219 36822 44560 43827 52719 63455 21852.48 20.0 18.4 20.8 5.3 4.6 -5.1 10.8 21.0 -1.6 20.29 20.36 23306 28654 36678 39132 41484 42389 49671 50536 51413 61412 77033 28474.44 IMPORTS GROWTH RATE 6.5 22.9 28.0 6.7 6.0 2.2 17.2 1.7 1.7 19.45 25.44 TRADE DEFICIT -1069 -2324 -4881 -5662 -6478 -9170 -12848 -5976 -7586 -8693 -13578 -6621.96 Source: Compiled by Economic Division, Department Of Commerce based on DGCI&S, 33 TABLE 2: REGION-WISE EXPORTS (Value in US $ Million) Region APRIL- MARCH 2002-2003 I. WEST EUROPE 12557.89 23.82 II. EAST EUROPE 333.20 0.63 III. CIS & BALTIC STATES 919.15 1.74 Russia 704.00 1.34 IV. ASIA AND OCEANIA 22726.28 43.11 V. AFRICA 3028.31 5.74 VI. AMERICA 12951.00 24.57 Latin American Countries 1290.35 2.45 TOTAL 52719.43 2003-2004 15240.08 24.02 523.09 0.82 1020.83 1.61 708.68 1.12 29408.08 46.35 3802.67 5.99 13391.76 21.10 1124.88 1.77 63454.56 20.36 -12.82 3.40 25.57 29.40 0.66 11.06 56.99 Growth % 21.36 Figures underlined indicate percentage share to total export and may not add upto 100 as the data for unspecified countries are excluded. Note:April-March, 2003-04 data are provisional and are subject to revision Source: Compiled by Economic Division, Department Of Commerce based on DGCI&S, data 34 TABLE 3: REGION-WISE IMPORTS (Values in US $ Million) Region APRIL- MARCH 2002-2003 I. WEST EUROPE 15045.37 24.50 II.EAST EUROPE 295.82 0.48 III.CIS & BALTIC STATES 842.52 1.37 Russia 592.61 0.96 IV.ASIA AND OCEANIA 17937.77 29.21 V.AFRICA 3424.75 5.58 VI.AMERICA 6046.04 9.85 Latin American Countries 1035.41 1.69 TOTAL 61412.14 2003-2004 18161.84 23.58 367.18 0.48 1261.05 1.64 959.51 1.25 26609.30 34.54 3185.88 4.14 6616.37 8.59 1162.48 1.51 77032.77 25.44 12.27 9.43 -6.97 48.34 61.91 49.67 24.12 Growth % 20.71 Figures underlined indicate percentage share to total import and may not add upto 100 as the data for unspecified countries are excluded. Note:April-March, 2003-04 data are provisional and are subject to revision Source: Compiled by Economic Division, Department Of Commerce based on DGCI&S, data 35 TABLE4: EXPORT OF PRINCIPAL COMMODITIES: APRIL-MARCH 2003-04 (US $ Million) COMMODITIES 20022003 I. PLANTATIONS II.AGRI&ALLIED PRDTS III. MARINE PRODUCTS IV. ORES & MINERALS V. LEATHER & MFRS. VI. GEMS & JEWELLERY VII. SPORTS GOODS VIII. CHEMICALS & RELATED PRDTS IX. ENGINEERING GOODS X.ELECTRONIC GOODS XI. PROJECT GOODS XII. TEXTILES XIII. HANDICRAFTS XIV. CARPETS XV.COTTON RAW incl. waste XVI. PETROLEUM PRODUCTS GRAND TOTAL 547 4721 1432 1996 1848 9030 73 7858 7689 1295 49 11081 785 533 10 2577 52719 20032004 583 5326 1320 2341 2025 10510 93 9791 10414 1739 60 11970 442 570 177 3519 63455 % AGE CHANGE 6.58 12.82 -7.82 17.28 9.58 16.39 27.40 24.60 35.44 34.29 22.45 8.02 -43.69 6.94 1717.25 36.55 20.36 Compiled by Economic Division, Department of Commerce based on DGCI&S, provisional data 36 TABLE5: EXPORT OF PRINCIPAL COMMODITIES: APRIL-MARCH 2003-04 (Rs. Crores) COMMODITIES 20022003 I. PLANTATIONS II.AGRI&ALLIED PRDTS III. MARINE PRODUCTS IV. ORES & MINERALS V. LEATHER & MFRS. VI. GEMS & JEWELLERY VII. SPORTS GOODS VIII. CHEMICALS & RELATED PRDTS. IX. ENGINEERING GOODS X.ELECTRONIC GOODS XI. PROJECT GOODS XII. TEXTILES XIII. HANDICRAFTS XIV. CARPETS XV.COTTON RAW incl. waste XVI. PETROLEUM PRODUCTS GRAND TOTAL 2647 22847 6930 9660 8943 43701 353 38029 37211 6267 237 53627 3799 2579 47 12471 255137 20032004 2679 24474 6066 10757 9305 48295 427 44991 47854 7991 276 55004 2031 2619 813 16170 291582 % AGE CHANGE 1.20 7.12 -12.48 11.36 4.04 10.51 20.96 18.31 28.60 27.50 16.27 2.57 -46.54 1.54 1625.48 29.66 14.28 Compiled by Economic Division, Department of Commerce based on DGCI&S, provisional data 37 TABLE 6: NDIA’S EXPORTS TO MAJOR DESTINATIONS (Values in US $ Millions) S. No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 COUNTRIES 20022003 2003- PERCENTAGE Weight 18.06 8.01 5.12 4.78 4.66 3.98 3.34 2.85 2.70 2.68 2.61 2.09 2.04 2.00 1.79 2004 Growth 11459.97 5079.98 3250.32 3033.24 2959.22 2522.39 2116.54 1805.84 1714.34 1494.27 1452.60 1164.42 1137.77 1114.96 996.33 5.18 52.67 24.37 21.50 49.80 19.73 48.89 8.67 -8.03 23.34 47.46 41.99 25.62 15.57 32.55 U.S.A. United Arab Emirates Hongkong United Kingdom China P.R. FRG Singapore Belgium Japan Italy Bangladesh Sri Lanka Netherlands France Indonesia 10895.76 3327.48 2613.33 2496.41 1975.48 2106.68 1421.58 1661.84 1864.03 1211.50 985.12 820.05 905.71 964.73 751.65 Compiled by Economic Division, Department of Commerce based on DGCI&S, provisional data 38 TABLE 7: INDIA’S DISAGGREGATED TRADE PERFORMANCE, APRIL-MARCH, 2003-04 (US $ Million) COMMODITIES APRIL-MARCH 20022003 PLANTATIONS 1. Tea 2. Coffee II.AGRI&ALLIED PRDTS 1.Cereal a) Rice b) Wheat c) Others 2.Pulses 3.Tobacco a) Unmanufactured b) Manufactured 4. Spices 5. Nuts & Seeds a) Cashew incl. CNSL b) Sesame & Niger seed c.) Groundnut 6. Oil Meals 7. Guergum Meal 8. Castor Oil 9.Shellac 10.Sugar & Mollasses 546.76 341.37 205.39 4721.32 1587.38 1204.92 363.64 18.82 71.29 211.36 151.57 59.79 342.08 555.98 425.97 93.17 36.84 307.33 100.56 126.01 18.57 374.94 39 20032004 582.53 347.01 235.52 5326.12 1492.53 899.45 511.27 81.81 70.20 237.39 174.42 62.96 332.00 650.14 370.00 161.74 118.41 711.98 109.62 138.31 35.50 265.62 6.54 1.65 14.67 12.81 -5.98 -25.35 40.60 334.77 -1.53 12.31 15.08 5.30 -2.94 16.94 -13.14 73.61 221.39 131.66 9.01 9.77 91.20 -29.16 0.92 0.55 0.37 8.39 2.35 1.42 0.81 0.13 0.11 0.37 0.27 0.10 0.52 1.02 0.58 0.25 0.19 1.12 0.17 0.22 0.06 0.42 Growth (%) Weight (%) (US $ Million) COMMODITIES APRIL-MARCH 20022003 11.Processed Foods a)Fresh Fruits & Vegetables b)Fruits/Vegetable seeds c)Processed and misc. Processed items 12. Meat & Preparations 13. Poultry & Dairy Product 14. Floriculture products 15. Spirit & Beverages III. MARINE PRODUCTS IV. ORES & MINERALS 1.Iron ore 2.Mica 3.Processed Minerals 4.Other ores & Minerals 5.Coal V. LEATHER & MFRS. 1.Footwear 2.Leather & mfrs. VI. GEMS & JEWELLERY VII. SPORTS GOODS VIII. CHEMICALS & RELATED PRODUCTS 1.Basic chemls.,Pharma & cosmetics 7858.33 4658.42 9791.47 5612.88 24.60 20.49 15.43 8.85 284.57 74.08 37.35 24.60 1431.55 1996.05 867.94 8.44 550.23 516.06 53.37 1848.32 642.02 1206.30 9029.94 72.61 348.73 88.65 48.05 26.25 1320.49 2340.68 1117.19 16.68 615.38 533.48 57.95 2025.33 741.46 1283.88 10509.79 93.36 22.54 19.67 28.64 6.71 -7.76 17.27 28.72 97.67 11.84 3.38 8.58 9.58 15.49 6.43 16.39 28.58 0.55 0.14 0.08 0.04 2.08 3.69 1.76 0.03 0.97 0.84 0.09 3.19 1.17 2.02 16.56 0.15 605.22 225.25 20.24 359.73 20032004 771.16 370.03 11.38 389.75 27.42 64.28 -43.77 8.34 1.22 0.58 0.02 0.61 Growth (%) Weight (%) 40 (US $ Million) COMMODITIES APRIL-MARCH 20022003 2.Plastics & Linoleum 3.Rubber, glass & other products 4.Residual chemls. & allied products IX. ENGINEERING GOODS MACHINERY Machine tools Machinery & Instruments Transport equipments IRON & STEEL Iron & Steel bar rod etc Primary & semi-fnshd iron & steel OTHER ENGINEERING ITEMS Ferro Alloys Aluminium other than prods. Non-ferrous metals Manufacture of metals Residual Engineering Items X.ELECTRONIC GOODS 1. Electronics 2. Computer Software in physical form XI. PROJECT GOODS XII. TEXTILES 49.45 11081.14 41 59.86 11970.00 21.05 8.02 0.09 18.86 376.97 7688.97 3463.13 120.80 2008.44 1333.90 1856.03 234.55 1621.48 2369.81 51.82 152.96 288.06 1847.62 29.33 1294.56 1252.73 41.83 392.81 10413.91 4801.43 137.40 2771.54 1892.48 2463.93 323.47 2140.46 3148.55 85.21 154.42 456.41 2408.00 44.51 1739.32 1686.41 52.90 4.20 35.44 38.64 13.74 37.99 41.88 32.75 37.91 32.01 32.86 64.42 0.96 58.44 30.33 51.73 34.36 34.62 26.48 0.62 16.41 7.57 0.22 4.37 2.98 3.88 0.51 3.37 4.96 0.13 0.24 0.72 3.79 0.07 2.74 2.66 0.08 1601.27 2046.64 27.81 3.23 1221.67 20032004 1739.14 42.36 2.74 Growth (%) Weight (%) (US $ Million) COMMODITIES APRIL-MARCH 20022003 1.Readymade garments 2.Cotton,yarn,fabrics, made-ups, etc. 3.Manmade textiles made-ups, etc. 4.Natural silk textiles 5.Wool & woollen mfrs. 6.Coir & coir mfrs. 7.Jute mfrs. XIII. HANDICRAFTS XIV. CARPETS 1.Hand-made excl. Silk 2.Mill-made excl. Silk 3.Silk Carpets XV.COTTON RAW incl. waste XVI. PETROLEUM PRODUCTS XVII. UNCLASSIFIED EXPORTS GRAND TOTAL 1417.49 310.85 50.92 73.36 187.57 785.33 532.59 401.02 111.71 19.86 10.39 2576.54 1195.31 52719.43 1817.57 369.66 59.12 78.44 232.43 442.31 569.50 543.03 0.00 26.47 176.59 3518.52 2574.71 63454.56 28.22 18.92 16.10 6.93 23.91 -43.68 6.93 35.41 -100.00 33.26 1599.74 36.56 115.40 2.86 0.58 0.09 0.12 0.37 0.70 0.90 0.86 0.00 0.04 0.28 5.54 4.06 3351.05 3324.36 -0.80 5.24 5689.91 20032004 6088.42 7.00 9.59 Growth (%) Weight (%) 20.36 100.00 Compiled by Economic Division, Department Of Commerce based on DGCI&S, provisional data US Dollar Exchange Rate 48.3953 45.9513 42 TABLE 8: EXPORTS BY REGIONS AND COUNTRIES: APRIl-MARCH, 2003-04 US $ Million APRIL-MARCH COUNTRIES/REGIONS I.WEST EUROPE (a)EU Countries 1.Belgium 2.Denmark 3.France 4.FRG 5.Greece 6.Ireland 7.Italy 8.Luxembourg 9.Netherlands 10.Portugal 11.Spain 12.United Kingdom 13.Austria 14.Sweden 15.Finland (b)Rest of West Europe 1.Norway 2.Turkey 3.Switzerland II. EAST EUROPE 1.Poland 2002-2003 2003-2004 12557.89 11522.47 1661.84 183.67 1074.09 2106.68 148.70 135.81 1357.08 9.14 1047.91 162.12 810.49 2496.41 81.11 176.29 71.14 1035.42 70.83 368.33 382.72 333.20 105.64 43 15240.08 13816.54 1805.84 237.06 1289.80 2522.39 193.77 149.35 1703.82 14.18 1277.73 166.45 991.48 3033.24 103.61 218.05 109.76 1423.54 75.91 564.93 445.17 523.09 132.46 Growth Weight % 21.36 19.91 8.67 29.07 20.08 19.73 30.31 9.97 25.55 55.16 21.93 2.67 22.33 21.50 27.74 23.69 54.29 37.48 7.18 53.38 16.32 56.99 25.38 % 24.02 21.77 2.85 0.37 2.03 3.98 0.31 0.24 2.69 0.02 2.01 0.26 1.56 4.78 0.16 0.34 0.17 2.24 0.12 0.89 0.70 0.82 0.21 US $ Million APRIL-MARCH COUNTRIES/REGIONS 2.Hungary 3.Czech. Repubic III. C.I.S.& BALTIC STATES a) Russia b) Rest of CIS Countries 1. Kazakhstan 2. Ukraine IV. ASIA & OCEANIA (a).Escap 1.Bangladesh 2.Nepal 3.Sri Lanka 4.Australia 5.China P.R. 6.Hongkong 7.Indonesia 8.Japan 9.Korea Republic of 10.Malaysia 11.Singapore 12.Thailand 13.Pakistan (b).Others 1.Saudi Arabia 2002-2003 2003-2004 48.26 57.42 919.15 704.00 215.15 46.88 93.70 22726.28 15764.51 1176.00 350.36 920.98 504.18 1975.48 2613.33 826.06 1864.03 644.85 749.37 1421.58 711.20 206.16 6961.77 940.74 91.60 86.29 1020.83 708.68 312.15 69.96 109.05 29408.08 20274.91 1646.08 643.34 1320.39 578.18 2959.22 3250.32 1123.22 1714.34 762.16 888.97 2116.54 827.43 286.55 9133.17 1119.96 Growth Weight % 89.80 50.27 11.06 0.66 45.08 49.23 16.38 29.40 28.61 39.97 83.62 43.37 14.68 49.80 24.37 35.97 -8.03 18.19 18.63 48.89 16.34 38.99 31.19 19.05 % 0.14 0.14 1.61 1.12 0.49 0.11 0.17 46.35 31.95 2.59 1.01 2.08 0.91 4.66 5.12 1.77 2.70 1.20 1.40 3.34 1.30 0.45 14.39 1.76 44 US $ Million APRIL-MARCH COUNTRIES/REGIONS 2.United Arab Emirates 3.Israel V. AFRICA 1.Egypt 2.Nigeria 3.South Africa VI. AMERICA (a)North America 1.Canada 2.U.S.A. (b).Latin American Countries 1.Brazil 2.Argentina 3.Mexico (c).Rest Of America 1.Panama Canal Zone 2.Peurto Rico 3.Turks & Calcos Is. GRAND TOTAL 2002-2003 2003-2004 3327.48 634.54 3028.31 298.24 449.08 483.98 12951.00 11594.03 698.27 10895.76 1290.35 479.03 60.29 261.55 66.62 9.08 6.66 50.56 52719.43 5079.98 722.74 3802.67 365.44 564.68 534.42 13391.76 12219.71 759.74 11459.97 1124.88 273.28 87.00 261.91 47.17 3.20 26.43 17.27 63454.56 Growth Weight % 52.67 13.90 25.57 22.53 25.74 10.42 3.40 5.40 8.80 5.18 -12.82 -42.95 44.31 0.14 -29.19 -64.76 297.15 -65.84 20.36 % 8.01 1.14 5.99 0.58 0.89 0.84 21.10 19.26 1.20 18.06 1.77 0.43 0.14 0.41 0.07 0.01 0.04 0.03 100.00 Compiled by Economic Divison, Department Of Commerce based on DGCI&S, provisional data Exchange Rate 48.3953 45.9513 45 TABLE 9: IMPORT OF PRINCIPAL COMMODITIES: APRIL-MARCH, 2003-04 (US $ Million) APRIL-MARCH COMMODITIES I. BULK IMPORTS 1. Cereals&preparations a) Rice b) Wheat c) Other cereals d) Preparations 2 Fertilizers a) Crude b) Sulphur & Un-roasted pyrites c) Manufactured 3 Edible Oil 4 Sugar 5 Pulp & waste paper 6 Paper board & mfrs. 7 Newsprint 8 Crude rubber 9 Non-ferrous Metals 10 Metalliferrous ores & metal scrap 11 Iron & Steel 943.67 46 1500.09 58.96 1.95 357.62 1814.15 6.78 343.37 422.34 234.46 182.45 666.52 1037.78 498.82 2540.60 9.32 408.38 602.63 334.24 279.99 942.51 1250.55 39.48 40.04 37.40 18.93 42.69 42.56 53.46 41.41 20.50 0.65 3.30 0.01 0.53 0.78 0.43 0.36 1.22 1.62 2002-2003 2003-2004 23941.32 24.50 0.23 0.00 0.14 24.13 625.78 184.82 83.35 29175.98 19.18 0.04 0.05 0.42 18.66 718.88 133.84 86.23 205.81 -22.66 14.88 -27.58 3.47 Growth Weight (%) 21.86 -21.73 -83.92 (%) 37.87 0.02 0.00 0.00 0.00 0.02 0.93 0.17 0.11 (US $ Million) APRIL-MARCH COMMODITIES 12 Petroleum crude & products II. PEARLS,PRECIOUS & SEMI-PRECIOUS STONES III. MACHINERY 1 Machine Tools 2 Machinery other than electrical 3 Electrical machinery 4 Transport Equipment IV. PROJECT GOODS V. OTHERS 1 Cashew Nuts 2 Fruits & Nuts 3 Wool raw 4 Silk raw 5 Synth.®.fibres 6 Pulses 7 Raw Hides & Skins 8 Leather 9 Coal,coke&briquettes 10 Non-metallic mnl.mfrs. 11 Other crude minerals 664.10 1897.40 542.68 24491.32 255.45 132.61 165.68 133.72 75.25 565.57 55.72 142.17 1239.64 234.67 103.15 47 863.85 2142.51 379.72 32160.24 298.53 177.47 189.46 136.29 58.43 489.90 49.78 171.13 1409.92 326.46 128.27 30.08 12.92 -30.03 31.31 16.87 33.83 14.35 1.92 -22.34 -13.38 -10.65 20.38 13.74 39.11 24.35 1.12 2.78 0.49 41.75 0.39 0.23 0.25 0.18 0.08 0.64 0.06 0.22 1.83 0.42 0.17 6062.76 6374.05 246.94 3565.62 7128.31 8188.52 459.51 4722.64 17.58 28.47 86.08 32.45 9.25 10.63 0.60 6.13 2002-2003 2003-2004 17639.52 20569.60 Growth Weight (%) 16.61 (%) 26.70 (US $ Million) APRIL-MARCH COMMODITIES 12 Organic&Inorganic chmls. 13 Dyeing,tanning matrl. 14 Medicinal&Pharma.prds. 15 Artf.resins, etc. 16 Chemical products 17 OtherTextile yarn,fabrics,etc 18 Manufactures of metals 19 Profl. instruments, etc. 20 Electronic goods 21 Wood and wood products 22 Gold & Silver 23 Tea 24 Wollen Yarn and Fabrics 25 Cotton yarn and fabrics 26 Man made f’mnt spun yarn 27 Made up textile articles 28 Ready made garments(wov.) 29 Silk yarn and fabrics 30 Milk & Cream 31 Spices 32 Oil seeds 33 Jute raw 2002-2003 2003-2004 3025.16 276.81 592.04 781.83 451.98 340.43 488.29 1133.19 5599.41 402.10 4288.25 25.89 20.86 87.80 397.23 39.52 23.96 60.55 1.973 121.18 2.37 27.85 48 4022.30 348.31 643.21 1080.01 630.81 424.23 687.23 1226.42 7495.52 711.29 6817.37 14.04 36.55 141.89 414.60 81.22 37.57 113.41 19.47 126.64 3.02 10.80 Growth Weight (%) 32.96 25.83 8.64 38.14 39.57 24.61 40.74 8.23 33.86 76.89 58.98 -45.77 75.17 61.61 4.37 105.51 56.84 87.29 886.95 4.51 0.00 -61.22 (%) 5.22 0.45 0.83 1.40 0.82 0.55 0.89 1.59 9.73 0.92 8.85 0.02 0.05 0.18 0.54 0.11 0.05 0.15 0.03 0.16 0.00 0.01 (US $ Million) APRIL-MARCH COMMODITIES 34 Woollen & Cotton rags 35 Veg. & animal fats 36 Cottow raw and waste 37 Essential oils & Cos.prep 38 Cement 39 Computer Soft.physical form 40 Other Commodities TOTAL IMPORTS 2002-2003 2003-2004 17.34 2.40 255.73 100.51 0.86 493.80 2328.37 61412.14 29.22 2.76 341.67 90.99 2.02 380.66 2791.34 77032.77 Growth Weight (%) 68.58 14.97 33.61 -9.47 134.03 -22.91 19.88 (%) 0.04 0.00 0.44 0.12 0.00 0.49 3.62 25.44 100.00 Compiled by Economic Division, Department Of Commerce based on DGCI&S, provisional data US $ Exchange Rate 48.3953 45.9513 49 TABLE 10: IMPORTS BY REGIONS AND COUNTRIES: APRIL-MARCH, 2003-04 US $ Million COUNTRIES/REGIONS APRIL-MARCH 2002-2003 2003-2004 I.WEST EUROPE (a)EU Countries 1.Belgium 2.Denmark 3.France 4.FRG 5.Greece 6.Ireland 7.Italy 8.Luxembourg 9.Netherlands 10.Portugal 11.Spain 12.United Kingdom 13.Austria 14.Finland 15.Sweden (b)Rest of West Europe 1.Norway 2.Turkey 3.Switzerland II. EAST EUROPE 15045.37 12541.71 3711.93 143.36 1094.18 2404.53 22.81 97.98 811.99 19.34 385.74 14.96 177.12 2777.01 164.21 199.00 517.56 2503.66 96.95 59.64 2329.88 295.82 18161.84 14502.34 3893.70 225.61 1054.55 2911.27 47.09 101.54 1070.21 44.40 533.67 13.87 258.74 3176.00 201.69 270.04 699.97 3659.49 265.34 73.32 3308.53 367.18 Growth Weight % 20.71 15.63 4.90 57.37 -3.62 21.07 106.41 3.63 31.80 129.63 38.35 -7.28 46.08 14.37 22.82 35.70 35.24 46.17 173.68 22.94 42.00 24.12 % 23.58 18.83 5.05 0.29 1.37 3.78 0.06 0.13 1.39 0.06 0.69 0.02 0.34 4.12 0.26 0.35 0.91 4.75 0.34 0.10 4.29 0.48 50 US $ Million COUNTRIES/REGIONS APRIL-MARCH 2002-2003 2003-2004 1.Poland 2.Hungary 3.Czech. Repubic III. C.I.S.& BALTIC STATES a) Russia b) Rest of CIS Countries 1. Kazakhstan 2. Ukraine IV. ASIA & OCEANIA (a).Escap 1.Bangladesh 2.Nepal 3.Sri Lanka 4.Australia 5.China P.R. 6.Hongkong 7.Indonesia 8.Japan 9.Korea Republic of 10.Malaysia 11.Singapore 12.Thailand 13.Pakistan (b).Others 38.84 20.61 85.48 842.52 592.61 249.92 12.73 194.96 17937.77 14489.82 62.05 281.76 90.83 1336.79 2792.04 972.59 1380.87 1836.33 1522.01 1465.42 1434.81 379.00 44.85 3447.95 51 49.20 27.32 111.83 1261.05 959.51 301.54 9.26 235.00 26609.30 21645.31 62.24 272.00 194.45 2620.43 4048.35 1492.57 2096.25 2642.26 2453.57 2045.20 2029.96 608.96 57.74 4963.99 Growth Weight % 26.68 32.52 30.83 49.67 61.91 20.66 -27.22 20.54 48.34 49.38 0.30 -3.46 114.10 96.02 45.00 53.46 51.81 43.89 61.21 39.56 41.48 60.68 28.75 43.97 % 0.06 0.04 0.15 1.64 1.25 0.39 0.01 0.31 34.54 28.10 0.08 0.35 0.25 3.40 5.26 1.94 2.72 3.43 3.19 2.65 2.64 0.79 0.07 6.44 US $ Million COUNTRIES/REGIONS APRIL-MARCH 2002-2003 2003-2004 1.Saudi Arabia 2.United Arab Emirates 3.Israel V. AFRICA 1.Egypt 2.Nigeria 3.South Africa VI. AMERICA (a)North America 1.Canada 2.U.S.A. (b)Latin American Countries 1.Brazil 2.Argentina 3.Mexico (c) Rest of America 1.Panama Canal Zone 2.Peurto Rico 3.Turks & Calcos. Is. GRAND TOTAL 504.72 956.99 602.68 3424.75 226.57 78.13 2093.48 6046.04 5009.87 566.29 4443.58 1035.41 316.79 404.14 65.52 0.76 0.03 0.73 0.01 61412.14 737.21 2059.70 669.76 3185.88 98.21 75.64 1891.97 6616.37 5453.35 590.73 4862.62 1162.48 314.82 523.90 73.85 0.54 0.53 0.01 0.00 77032.77 Growth Weight % 46.06 115.23 11.13 -6.97 -56.66 -3.18 -9.63 9.43 8.85 4.32 9.43 12.27 -0.62 29.63 12.72 -29.16 1790.18 -98.80 -100.00 % 0.96 2.67 0.87 4.14 0.13 0.10 2.46 8.59 7.08 0.77 6.31 1.51 0.41 0.68 0.10 0.00 0.00 0.00 0.00 25.44 100.00 Compiled by Economic Division, Department Of Commerce based on DGCI&S, provisional data US $ Exchange Rate 48.3953 45.9513 52