CHAPTER- V

INDIA’S FOREIGN TRADE AND AGRICULTURE EXPORTS 5.1 Introduction The ‘outward looking’ exports promotion strategy adopted in 1991, led to significantly faster growth of production and exports in India since then. The increased domestic competition in international economic environment owns to formation WTO and other global economic crises. The trade to GDP ratio in 1990-91 was around 11percent which has increased to more than 30 percent in 2008-09 in India indicated tremendous growth in trades (economic survey, 2009-10). This clearly indicates greater degree of openness of Indian Economy. The present chapter discusses growth and composition of India’s foreign trade, it further discusses growth and composition of agriculture export in India since economic liberalization.

5.2 GDP growth rate in India Indian economy recorded a high growth path triggered mainly by macroeconomic reforms and expansion of economic activities across the sectors. However, there are some serious concerns about a number of imbalances in the growth scenario inter-sectoral, interregional and inter-state. As a result, the average productivity has remained very low as compared to developed and other developing countries. Table 5.1: Contribution of Different Sectors in National Income1980-81 to 2008-09 Year

Primary sector (percentage)

Secondary sector (percentage)

Tertiary sector (percentage)

1980-81

41.8

21.6

36.6

1990-91

33

27

40

2000-01

28.1

24.8

47.1

2007-08

17.2

26.8

56

2008-09

17.1

25.9

57

Source: statistical outline of India2007-08, Monthly Economic report, March 2009

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The table 5.1 shows that national income up to 1980-81 contribution of primary sector had more percentage than other two sectors. But after a decade it is just reversed tertiary sectors has taken up the position, this has due to international demand to primary and secondary sectors. This trend continued and was maintained during the year 2008-09 also i.e. 57 per cent more than three times and more than two times of primary and secondary sectors. With growth in GDP, the issue of rural-urban divide, regional divides and rich-poor divide became evident, which brought “inclusive growth” on high priority. The Indian economy has been growing at a faster rate in recent decades than it did earlier. Table 5.2 shows average rate of growth in real GDP highest was observed during the year 2007-08, i.e. 9.2 percentage. Table 5.2: Average Rate of Growth of Real GDP in India (1990-2010) Period 1990-2008

Growth percentage 6.39

2000-2008

7.19

11 th plan period (2007-12) 2007-08

9.2

2008-09

6.7

2009-10

7.2

Source: CSO, Govt. of India, 2010

While the growth rate of the Indian economy has been increasing in recent times, though, with fluctuation but one phenomenon which was observed was that the growth performance of the three major sectors of the economy, namely, agriculture, industry and services, has been diverse. The growth in the agriculture sector has been the most volatile and also the least among the three sectors. While the growth in the industrial sector has remained more or less constant with upward bias, growth rate in services sector has risen sharply. The consequence of diverse growth rate in the three sectors has resulted in a structural change and change in contribution of the sectors in the total GDP. The share of agriculture sector in overall GDP has declined more or less consistently since economic liberalization,

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Table 5.3 India’s Total Exports and Imports (1990-91 to 2007-08)

Rs. Crores

Total exports

Percentage share of total exports in GDP

Total Imports

Percent share of total Imports in GDP

1990-91

515032

32558

5.72

42095

7.39

1995-96

1083289

106352

8.92

122678

10.29

2000-01

1925017

201350

9.58

228307

10.86

2001-02

2097726

209018

9.17

245200

10.76

2002-03

2261415

255137

10.39

297206

12.11

2003-04

2538170

293367

10.65

359108

13.04

2004-05

2971464

375340

11.92

501065

15.91

2005-06

3389621

456418

12.73

660409

18.41

2006-07

3952241

571779

13.85

838048

20.3

2007-08

4581422

655864

13.89

1005159

21.28

Year

Total GDP

Source: Economic Survey 2010-11& Centre for Monitoring Indian Economy Sep, 2010

The total India’s Exports, Imports and their share in Gross Domestic products is given Table 5.3; the share of total exports in the total GDP was 5.72 percent in the year 1990-91, which increased to 13.89 percent during 2007-08. Similarly, the share of total imports in the total GDP was 7.39 percent, which increased to 21.28 percent in the same period. Almost similar increase have been observed during the year 1995-96 and 2000-01 it was 8.92, 10.29 percent and 9.58, 10.86 percent respectively. Thus it is clear from table that the last decade has seen acceleration in growth of exports as well as imports compared to previous decades. The import growth has been faster compared to growth of export resulting in widening of trade deficit. On account of liberalization, privatization and globalization of the Indian economy, the growth rate of GDP (at the factor cost at 1993-94prices) has increased in the post reform period. Particularly since 2001- 02 onwards due to Indian economy adopting itself to implementation of WTO and increased competition resulting in increased competitiveness of 107 | P a g e

economy. India has done fairly well in comparison to other regions and economies of the world as shown in table 5.4 with regards to growth of GDP. The growth of export as well as imports is robust during this period in India. However, imports have increased faster than export, widening the gap.

Table: 5.4 GDP and Merchandise Trade by Region (2006-08) Annual percentage change at constant prices GDP

Exports

Imports

2006

2007

2008

2006

2007

2008

2006

2007

2008

World

3.7

3.5

1.7

8.5

6.0

2.0

8.0

6.0

2.0

North America (a)

2.9

2.1

1.1

8.5

5.0

1.5

6.0

2.0

-2.5

United States

2.8

2.0

1.1

10.5

7.0

5.5

5.5

1.0

-4.0

Europe

3.1

2.8

1.0

7.5

4.0

0.5

7.5

4.0

-1.0

European Union (27)

3.0

2.8

1.0

7.5

3.5

0.0

7.0

3.5

-1.0

Commonwealth of Independent

7.5

8.4

5.5

6.0

7.5

6.0

20.5

20.0

15.0

Africa

5.7

5.8

5.0

1.5

4.5

3.0

10.0

14.0

13.0

Middle East

5.2

5.5

5.7

3.0

4.0

3.0

5.5

14.0

10.0

Asia

4.6

4.9

2.0

13.5

11.5

4.5

8.5

8.0

4.0

China

11.6

11.9

9.0

22.0

19.5

8.5

16.5

13.5

4.0

Japan

2.0

2.4

-0.7

10.0

9.5

2.5

2.0

1.5

-1.0

India

9.8

9.3

7.9

11.0

13.0

7.0

8.0

16.0

12.5

Newly industrialized

5.6

5.6

1.7

13.0

9.0

3.5

8.0

6.0

3.5

States (CIS)

economies (4)(b) Source: WTO Secretariat & Economic Review 2009

a. Includes the Caribbean. b. Hong Kong, China; Republic of Korea; Singapore and Chinese Taipei.

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Thus, table 5.4 clearly indicates slowdown in economic activity around the world. Among world economies China and India have emerged the fastest growing ones. Obviously appropriate policy framework is required to reduce adverse impacts of global slowdown.

5.3 General trends in trade performance Since 1991, India has transformed itself from one of the most closed large economies of the world to a relatively more open one, with trade as a percentage of GDP reaching 47percent in 2006 and 46 percent in 2007 as shown in Table 5.5. The average annual real growth rate of India’s exports of goods and services for the 1995-2007 periods was 12 percent well above the world average growth of 7 percent. Table 5.5 Total trade as a percentage of GDP (percentage)

Year

1990

16 GDP (percentage

1995

2000

2001

2002

2003

2004

2005

2006

2007

23

27

26

30

31

40

43

47

46

Source: World Development Indicators. & Organization for Economic Co-operation and Development, 2009

As discussed above, the shares of manufacturing in both the value added and total exports are lower in India but this is not necessarily because the manufacturing sectors internationally uncompetitive but because it has an unusually small share in the domestic economy. In fact, according to Gaullier et al. (2005), up to 54.4 percent of manufacturing value-added was exported in 2004.Nevertheless, despite its is relative abundance in skilled labor and capital, India’s manufacturing exports are highly concentrated in low-technology goods and the share of high-technology manufactured goods in its total exports has barely changed since the mid1990s. The table 5.6 provides data related to Share of India's goods and services trade in world total, it shows service export and import has much higher than Merchandise export and import.

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Table 5.6 Share of India's goods and services trade in world total Export/Import

1995

2000

2005

2006

2007

Merchandise exports

0.6

0.7

1

1

1.1

Merchandise imports

0.8

0.8

1.3

1.4

1.4

Services exports

0.5

1.1

2.2

2.7

2.7

Services imports

0.8

1.2

2

2.4

2.4

Source: WTI (2008).

India’s current merchandise export structure remains heavily skewed towards petrol products, jewelry, furniture, chemical products and textiles and wearing apparel, the structure of India’s exports seems a little more concentrated in 2005 than in 1996 but this is largely driven by the emergence of exports of petroleum products. In general, it is not easy to classify the direction of changes in the structure of top Indian exports. On the one hand a few more sophisticated products such as motor vehicle parts made it to the top 25 products in 2005. On the other hand several traditional manufacturing products such as gems and jewelry, wearing apparel and certain food products that already dominated Indian exports in 1996 have not gained in importance in 2006. This suggests that India has not integrated into the global production networks of high technology products to an extent. The strength of services provided an impetus to, and now plays an important role in, India’s overall trade. The table 5.7 shows Share of India's goods and services trade in world in 1995 merchandise exports was 0.6 percent compare to import share.8 percent, Services exports &Services imports was 0.5 & 0.8 percent respectively, it has reached 1.1 & 1.4 percent merchandise exports& imports in the year 2007. Services exports &Services imports was 2.7 & 2.4 percent respectively in the same period. The data reveals that share of trade of India’s to world trade has more than doubled since the formation of WTO.

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Table: 5.7 Trade performance Volumes and Unit Values Annual per cent change Exports

Imports

Value

Value

Year

Terms of Trade

Rs.

USD

VOL

Unit Val

Rs.

2001-02

2.7

-1.6

0.8

1

6.2

1.7

4

2.8

-2.1

-1.3

2002-03

22.1

20.3

19

2.9

21.2

19.4

5.8

14.3

-9.8

7.4

2003-04

15

21.1

7.3

7.5

20.8

27.3

17.4

3.1

3.6

11.2

2004-05

27.9

30.8

11.2

14.9

39.5

42.7

17.2

18.9

-3.5

7.3

2005-06

21.6

23.4

15.1

6.1

31.8

33.8

16

14

-6

8.2

2006-07

25.3

22.6

10.2

13.7

27.3

24.5

9.8

15.1

-1.3

8.8

2007-08

14.7

29

7.9

5.1

20.4

35.5

14.1

1.9

2.6

10.7

2008-09

28.2

13.6

9

16.9

35.8

20.7

20.2

13.8

2.5

11.7

2009-10

0.6

-3.5

-1.1

1

-0.8

-5

9.9

-10

12.3

11

USD VOL

Unit Val

Net Income

Source: Computed from DGCI&S, Economic Survey, 2010-11

Thus, table: 5.7 Shows trade performance volumes and unit values annual per cent change during the year 2001-02 values was in rupees 2.7 imports was in rupees 6.2 unit value was 1, it has reduced to .6 and -0.8 in the year 2009-10 net income was positive I.e. 12.3and 11 but earlier period it was negative i.e. -2.1and -1.3. The deceleration in export growth in rupee terms in 2009-10 was not only due to a large deceleration of growth in unit values to 1.0 per cent compared to 16.9 per cent in 2008-09 but also due to actual decline in quantum by 1.1 per cent compared to the 9 per cent growth in 2008-09. This was mainly due to the negative growth in both volume and unit value of manufactured goods. Export volume of food and food articles like rice, coffee, spices, and oilseed cake also fell (though their unit values (-) 8.0 per cent growth for the Association of South East Asian Nations (ASEAN) and the (-) 5.8 per cent growth for North America which are among our major trading partners and the high negative growth of 22 percent for the Commonwealth of Independent States (CIS) contributed to this fall in quantum of exports.

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Similarly a dissection of the import unit value indices, region-wise, shows that the negative growth for the first time in the decade was due to the negative growth of unit values in imports from all the regions, with the South African Development Community being the exception. The deceleration of imports in rupee terms in 2009-10 was mainly due to the high negative growth of unit value indices even while volume growth was moderately high. This, in turn, was due to the high negative unit value growth in chemicals and related products despite the moderate quantum growth; negative unit value growth of machinery and transport equipment coupled with the low quantum growth; negative unit value growth in miscellaneous manufactured articles and mineral fuels and nonfuel crude materials, despite their positive quantum growths. The net terms of trade, which measures the unit value index of exports as a proportion of unit value index of imports, improved by 12.3 per cent. This was despite the very marginal positive growth in unit value index of exports as the growth of unit value index of imports was negative for the first time in this decade at 10 per cent. Income terms of trade, reflecting the capacity to import, grew at 11 percent like in the two previous years. But unlike the earlier two years this was due to the high favorable growth in net barter terms of trade while export volume growth was negative for the first time in this decade. 5.4 India’s Export –Import India’s primary products export during 1990-91 was US$ 4324 Million recorded increases to US$ 7256 Million in 1995-96. The export has finally reached to US$ 27523.42 million in 2007-08. The increase in export and import raised the proportion of trade in agricultural GDP from less than 5 percent in the beginning of reforms to close to nine and a half percent by 1995-96. After 1996-97, value of export started shrinking as international prices started falling (Chand 2003). Due to falling international prices imports into the country became more attractive and were facilitated due to liberalization of imports followed due to WTO commitments. This way the net earnings from agriculture trade in the post WTO period dropped to a very low level. The post WTO period showed increase in ratio of imports to GDP whereas ratio of exports to GDP for agriculture sector followed small decline. This shows that post WTO period has been adverse to export but favorable for imports. This pattern shows sharp contrast with the first five years of reforms period when share of exports in GDP experienced sizable increase.

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Marine products are the most important items of agricultural exports from India and oil meal/cake remained the second most important item in most of the years (Table 4.8). Export of marine products got a big boost with economic reforms in the initial years. During the post WTO period marine products export did not show much increase. India has registered its presence in a very big way in rice export in some years however these exports show very large year-to-year fluctuations. Marine products export during 1990-91 was US$ 535 Million recorded a increases to US$ 1010.8 Million in 1995-96. The export has finally reached to US$ 1720.5 Million in 2007-08. Export of oil meal increased from US $ 339 Million in 1990-91 to US $ 702 Million in 1995-96 since then export has fallen to less than half. In the case of commodities like cotton, wheat, and sugar, India occasionally export large quantity but there is no consistent trend in these exports. Exports of traditional items from India like spices, tea and coffee and groundnut could not keep pace with the past after 1997-98. Export of horticultural products maintained upward trend during post WTO period but total export of these products is low.

In case of

manufactured goods export it has increased from US $ 12996.4 Million in 1990-91 to US $ 23747 Million in 1995-96, finally in the year 2007-08 it has reached US $ 102944 Million.

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Table: 5.8 Exports of Principal Commodities – US Mn Dollar Commodity/Year I. Primary products A. Agriculture and allied products 1. Tea 2. Coffee 3. Rice 4. Wheat 5. Cotton raw including waste 6. Tobacco 7. Cashew including cashew nut shell liquid 8. Spices 9. Oil meals 10. Fruits and vegetables 11. Processed fruits, juices, miscellaneous processed items

199019952000200120022003200491 96 01 02 03 04 05 4324 7256.9 7126.2 7163.6 8706.1 9901.8 13553.3 3354.4 6081.9 5973.2 5901.2 6710 7533.1 8474.7 596.4 350.1 391.5 360.5 341.4 356.3 409.6 140.6 449.3 259.4 229.6 205.4 236.3 237.9 257.2 1365.7 641.8 665.6 1204.9 907 1506.5 17.3 109.6 90.9 278.9 363.6 520.4 324.9 471.4 60.8 48.4 9 10.4 205.1 94 146.8 133.6 189.8 169.4 211.4 238.6 279.2

2005200606 07 16377.4 19686 10213.8 12683.5 390.9 435.3 358.8 435.1 1405.2 1554.9 125.9 7.8 656 1349.8 300.6 372.4

200708 27523.4 18403.6 505.3 465 2918.7 0.1 2202 479.8

249.1

369.9

449.5

376.2

426

371

554

585.8

553.9

555.1

130.4 339.1 118.9

237.2 702.1 157.7

354.1 447.6 184.6

313.9 474.5 221.1

342.1 307.3 245.5

336 728.7 389.9

419.1 707.2 398.7

477.9 1101.1 481.9

697.9 1216.4 681.1

1044.3 2022 761.6

118.5

265.4

288.4

259.3

306.7

305.2

284.3

359

405.8

530.5

12. Marine products 535 1010.8 1393.8 1236.8 1431.6 1328.7 1439.8 1589.2 1768.2 1720.5 13. Sugar and mollases 20.9 151.4 110.6 373.6 374.9 269 34.5 135 720.6 1406.5 14. Meat and meat preparations 77.9 187.4 321.7 250.2 284.6 373.1 424 621.2 732.4 931.3 15. Others 134.7 530.8 801.2 682.8 654.3 967.8 1360.9 1625.3 1751.6 2861 The export of agricultural products such as tea has decreased during 1990-91 to 2008-09 periods. For primary products, overall the exports increased to 5 times during same period, for agricultural products it increased but not in the same trend. Total exports increased in the post WTO period as well as in the Pre WTO period not in linear trend (ref Table: 5.8). 114 | P a g e

Table: 5.8 Exports of Principal Commodities – US Million Dollar (Cont…) Table: 5.8 Exports of Principal Commodities – US Million Dollar (Cont…) Commodity/Year B. Ores and minerals II. Manufactured goods A. Leather and manufactures

1990-91 1995-96 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 969.6

1174.9

1153

1262.4

1996

2368.7 5078.6

6163.6 7002.5

9119.8

12996.4 23747

34335.2 33369.7 40244.5 48492.1 60730.7 72562.8 84920.6 102944

1449.2

1752.2

1944.4

1910.1

1848.3

3597

5885.9

6051.8

7455.3

9445.9 12443.7 14769.5 17335.5 21176.7 12405.4 17348.3 21718.8 29567.2 37352.8

B. Chemicals and Related products 1728

2163

2421.6

2697.7 3016.7

3502.5

C. Engineering goods

2250.4

4391

6818.6

6957.8

9033

D. Textile and textile products

4342.6

8031.6

11285

10206.5

11617 12791.5 13555.3 16402.1 17373.2 19420.1

E. Gems and jewellery

2924.1

5274.8

7384

7306.3

9029.9 10573.3 13761.8 15529.1 15977

F. Handicrafts (excluding handmade carpets)

223.9

433.9

661.5

549

785.3

499.7

377.4

462

438

508.2

G. Other manufactured goods

78.2

266.5

355.8

388.3

475.6

613.3

822.6

983.7

1213

1304.5

III. Petroleum products

522.7

453.7

1869.7

2119.1

2576.5

3568.4 6989.3 11639.6 18678.7 28363.1

IV. Others

302.2

337.3

1229.2

1174.3

1192.3

1880.3 2262.6

Total exports

4302.1

18145.2 31794.9 44560.3 43826.7 52719.4 63842.6 83535.9 103091 126414 163132

Source: Directorate General of Commercial Intelligence and Statistics. 2007 & RBI Handbook, 2008

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2510.7 3128.8

19678.7

Trends in export show that India has not been able to maintain steady flow of export of commodities like non-basmati rice, wheat, cotton, sugar. In the post WTO period export of oil, groundnut, spices, tea, and coffee has been affected adversely. In the case of high value horticultural and livestock products, exports, in general, maintained rising trend even during the post WTO period of depressed international prices. Export of guar gum meal, castor oil shows the possibility of exploiting inches in export. Trend in export of castor oil is a pointer to the important role of technology that enabled India to raise castor yield in some states, which equipped it with advantage in export. Uncertain production in agriculture is also due to its dependence on monsoon; however, exports from agricultural sector depend on surplus production and policy of Government regarding exports.

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Table: 5.9 Exports of Principal Commodities - Rupees (Rupees Crore) 199091 7758.4 6018.7 1070.1 252.2 461.6 31.1 845.9 263.4

199596 24274 20344 1171.1 1502.9 4568.1 366.8 203.5 446.8

447

1237.2

2054

1793.9

2061.5

1704.8

2489.1

2593.4

2506.5

2234.8

233.9 608.5 213.3

793.5 2348.6 527.6

1618 2045 843.3

1497 2262.9 1054.6

1655.5 1487.4 1188.1

1544.2 3348.4 1791.6

1883.2 3177.6 1791.3

2116 4875 2133.5

3157.9 5504.3 3082.1

4204.5 8140.5 3066.4

11. Processed fruits, juices, miscellaneous processed items

212.7

887.8

1318

1236.7

1484.2

1402.4

1277.2

1589.4

1836.4

2135.8

12. Marine products 13. Sugar and mollases 14. Meat and meat preparations 15. Others

960 37.6 139.8 241.7

3381.1 506.4 627 1775.6

6367 505.1 1470 3660

5898.3 1781.9 1193.3 3256.5

6928.1 1814.5 1377.2 3166.6

6105.6 1236 1714.4 4447.2

6469.2 155.1 1905.3 6114.9

7035.9 597.9 2750.2 7195.6

8001 6926.7 3260.8 5662.8 3314 3749.5 7926.1 11518.4

Commodity/Year I. Primary products A. Agriculture and allied products 1. Tea 2. Coffee 3. Rice 4. Wheat 5. Cotton raw including waste 6. Tobacco 7. Cashew including cashew nut shell liquid 8. Spices 9. Oil meals 10. Fruits and vegetables

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20002001200220032004200501 02 03 04 05 06 32556 34164.6 42133.3 45500.4 60896.9 72508.4 27288 28144 32473.3 34615.7 38078.1 45220.1 1789 1719.2 1652.1 1637.4 1840.3 1730.7 1185 1094.9 994 1085.9 1069.1 1588.7 2932 3174.1 5831.2 4168 6768.9 6221.3 415.1 1330.2 1759.9 2391.2 1459.8 557.5 221.1 42.7 50.3 942.4 422.6 2904.4 867.2 807.7 1022.9 1096.5 1254.6 1330.7

2006200707 08 89078 110811 57392 74094.3 1969.5 2034.2 1969 1872.3 7035.9 11750.9 35.4 0.2 6107.8 8865.4 1685.2 1931.9

Table: 5.9 Exports of Principal Commodities-Rupees (Rupees Crore) (Contd…)

Commodity/Year

1990-91 1995-96 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08

B. Ores and minerals

1739.7

II. Manufactured goods

23319.1 79433.3 156858.4 159146.4 194764.5 222828.8 272872.2 321260.8 384261.4 414457.7

A. Leather and manufactures

2600.3

5861.2

8883.1

B. Chemicals and Related products

3100.5

12032

26889.2 28862

C. Engineering goods

4037.8

14687.7 31150.4 33182.9 43715.4 57004.9 77948.7 96156.9 133790.1 150384.9

D. Textile and textile products

7791.8

26865.4 51554.7 48676.6 56220.8 58778.8 60905.8 72617.8 78612.9 78186.6

E. Gems and jewellery

5246.7

17644.2 33733.4 34845.1 43700.7 48586.1 61833.7 68752.6 72295.2 79227.7

F. Handicrafts (excluding handmade carpets)

401.7

1451.5

3022.1

2618.1

3800.6

2296.1

1695.8

2045.3

1981.9

2046.2

G. Other manufactured goods

140.4

891.4

1625.6

1852

2301.7

2818.1

3696.3

4355

5488.8

5252.3

III. Petroleum products

937.8

1517.8

8541.7 10106.6 12469.2 16397.4 31404.2 51532.8 84520.1 114191.7

IV. Others

542.3

1128.2

5615.4

Total exports

3930.1

5267.4

6020.6

9109.8

5600.4

8945

31686

36716.9

9939.4 10880.6 11943.5 13650.4 14101.3

36080.3 43405.5 55911.4 65389.8 78442.1 85258.7

5770.3

8640.1 10166.3 11115.9 13919.7 16402.9

32557.6 106353.3 203571 209018 255137.3 293366.8 375339.5 456417.9 571779.3 655863.5

Source: Directorate General of Commercial Intelligence and Statistics. 2007 & RBI Handbook

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9659.9 10884.6 22818.8 27288.3

The table 5.9 shows exports of principal commodities, in terms of rupees. India’s primary products export during 1990-91 was Rs. 7758.4 crore recorded increase to Rs. 24274.1 crore in 1995-96. The export has finally reached to Rs. 110811 crore in 2007-08. Marine products export during 1990-91 was Rs. 960 crore recorded a increases to Rs. 3381 crore in 1995-96. The export has finally reached to Rs. 6926.7 Crore in 2007-08. Manufactured goods export during 1990-91 was Rs. 23319 crore recorded a increases to Rs. 79433 crore in 1995-96. The export has finally reached to Rs. 414458 crore in 2007-08. Petroleum products export during 1990-91 was Rs. 937.8 crore recorded a increases to Rs. 1517.8 crore in 1995-96. The export has finally reached to Rs. 114192 crore in 2007-08. The issue of export promotion is particularly relevant at the present time when Indian economic policies are undergoing a process of substantial reconsideration and revision.21 A commodity wise export data as per (DGCIS) reveals that manufactured goods continued to maintain the largest share at 67.2 percent followed by petroleum products 14.7 per cent and primary products 13.9 per cent. Above all the share of manufactured goods has increased along with the decrease in share of petroleum products and primary products. Exports were largely neglected during the first and second five-year plans, which were justified on the ground that demand for India export was inelastic. In Table 5.8 shows export of India’s agriculture and allied products exports

in

1990-91 was 6018.7 crore during 1995-96 it has reached to 20344 crore, but in the year 200102 it reach to 27228.2 crore, finally 74094.3 crore in 2007-08. Among the primary products, agriculture and allied products showed a decline of 4.9 per cent as against a high growth of 45.3 per cent during the year. Slowdown in agricultural and allied products export was mainly due to the decline in exports of rice, cotton, marine products sugar and molasses and deceleration in export growth of tea, coffee, and oil meal. Ores and minerals export declined by 14.5 per cent during this period.

21

E xport optimi sm and import liber alization E cono mic and political w eekly vol. 20. (J ayati Ghosh Jan 198 5.)

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Table 5.10 India’s Exports of Principal Commodities Percentage share

Commodity Group

2006-

2007-

2008-

07

08

09

I Primary Products

15.6

16.9

13.9

Agri & Allied

10.0

11.3

9.6

Ores &Minerals

5.5

5.6

4.3

II Manufactured

67.2

63.2

67.2

2.4

2.2

1.9

13.7

13.0

12.4

Engineering Goods

23.4

22.9

25.9

Textiles & Textile

13.7

11.9

11.0

Gems & Jewelry

12.6

12.1

15.2

III Petroleum

14.7

17.4

14.7

2.5

2.5

4.2

products

Goods Leather & Manufacture Chemical & Related Products

products

Products IV Others Total Exports

100.00 100.00 100.00

Source: RBI Bulletin Nov2009

The table 5.10 shows that during 2008-09, exports of major commodity groups slowed down, engineering goods showed a marginal growth, Gems and Jewelry showed substantially accelerated growth. Export of agriculture and allied products, ores and minerals and petroleum products declined. Leather, manufacture and textile products showed deceleration. Export of manufactured goods showed a deceleration of 19.3 per cent from 21.3 per cent in the previous year. Among manufactured goods export of engineering goods which was the largest item in

120 | P a g e

India’s export comprising of transport equipment, iron & steel and electronic goods showed a marginal increase of 26.5 per cent as it was 25.4 percent a year ago. The share of engineering goods in total export has increased remarkably from 22.9 per cent to 25.9 per cent as a result of high growth manufactured by engineering goods in contrast with slow down in most of other commodity groups. Chemicals and related products exports during 200809 at US$ 22.6 billion showed a moderate growth of 6.8percent from 22.3percent during 200708. Exports of textiles and textile products showed a sharp moderation in growth to 3.0 percent from 11.8 percent. Gems and Jewelry exports during 2008-09 at US$ 27.7 billion recorded an accelerated growth of 40.8 percent, as it was 23.2 percent. This is evidence of recessionary condition prevailing in export destination of the country. Table 5.11 India's Share in world Export (in US million dollar (1990-2008)

Year

Commodity

Meat & Preparation

1990 0.2

Fish Preparation

1995

2000 0.7

2007 0.9

2008 1.1

1.6

2.7

2

1.7

Rice

6.4

10.2

17.8

14.3

Vegetable &fruits

0.8

1.3

1.1

1.2

Sugar &prep

0.1

0.9

3.6

4.8

Coffee substitute

1.7

2.3

1.9

2

Tea

22.1

14

8.6

9

Spices

7.7

10.3

14

14.5

U/M Tobacco

2.1

2.7

3.8

5.3

M Tobacco

0.3

0

0

0

Oilseeds

0.8

1.7

1.8

1.5

Iron ores

7.6

3.9

11.5

8.6

Medicine Pharmacy

1.2

1.2

1

0.9

Leather

4.8

2.3

3.1

3.5

Woven cotton fabrics

3.7

4.9

3.2

3.6

Pearls &stone

9.8

12

13

13

Total

0.5

0.7

1.1

1.1

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Source: United Nation: 2008, International Trade Statistics, Year Book, &Economic Survey 2010-11, UN2009

However, during post-WTO period (1995-2008), the average share of edible oils increased to 45.4 per cent in India's agricultural imports. But the share of other items, i.e. pulses, cashew nuts, sugar, wheat and cereal preparations, diminished marginally. India’s agricultural imports on an average during post-WTO period. The major items, whose imports have been increased during post-WTO period, were edible vegetable oils, spices, raw cotton, and raw jute. The share of these four items in India's agro imports increased from 18.1 per cent during pre-WTO period to 54.6 per cent during post-WTO period on an average per annum. In fact, edible oils constituted more than 50 per cent in India's agricultural imports during 1998-2004, except 2001-02. The major items, whose share has been increased during post-WTO period, were rice other than basmati, pulses, wheat, spices, groundnut, guar gum meal, castor oil, and sugar. On the other hand, the share of agricultural products in India's global imports during post-WTO period has been increased to 6.1 per cent-on an average per annum, as compared to 4 per cent during pre-WTO period. The major items, whose share has been increased in India's global imports during postWTO period, were edible vegetable oils, raw cotton and spices. Thus, it is revealed that during post-WTO period, India's global agricultural exports have diminished marginally; rather her global agricultural imports have been increased. The most important determinant of the distribution of gains from trade is the Terms of Trade. Terms of trade are the important measure of gains to individual country from international trade. During post-WTO period the gains from trade may not be evenly distributed among WTO members. Table 5.11 shows that India enjoyed favorable terms of trade during pre-WTO period (1990-95) except for 1991-92, when new economic policy of liberalization was launched. During 1991-92, export unit value of coffee, tobacco and sugar was cheap and import unit value of rice and milk and cream was higher. India's commodity terms of trade were turned out to be highly favorable during 1994-95. On an average per annum during pre-WTO period, India's agricultural terms of trade were favorable by 18.6 per cent. During post-WTO period also, India enjoyed favorable agricultural terms of trade except for 1995-96, when import prices of edible oils, cashew nuts and raw cotton were higher. However, India experienced favorable agricultural terms of trade during 1996-2004. On an average per annum during post-WTO period, India enjoyed favorable agricultural terms of trade by 11.15 per cent, as the export unit value index 122 | P a g e

was higher by 52.74 per cent, but the import unit value index was higher by 37.42 per cent. Nevertheless, on an average per annum, the gains from agricultural trade were lower during the post-WTO period, as compared to Pre-WTO period. On the whole, it can be said that India's agricultural terms of trade have not deteriorated. Rather, India has marginally gained in her global agricultural trade during the post-WTO period. But the gains from agricultural trade in the post-WTO regime have been much less than expected. 5.5 Imports of Principal Commodities Trends in India's Imports The trends in India's imports for the period 1990-91 and 1995-96 as compared with the corresponding period of the previous year are reflected in Import of items under bulk category as a whole comprising inter-alia Fertilizers, Cereals, Sugar, Edible Oil, Iron and Steel and Petroleum Crude and Products recorded a substantial increase during 2003-2004 compared with the corresponding period of the previous year. It is notable that the commodity group recording the highest growth in imports was Machinery. India’s Bulk Imports during 1990-91 was US$ 10848 Million recorded increases to US$ 14314 Million in 1995-96. The export has finally reached to US$ 112749 Million in2007-08. As far as import of individual items is concerned, significant growth was registered by Paper Board and Manufactures (47.59percent) followed by Iron & Steel (43.76 percent), Crude Rubber including Synthetic (43.31 percent), Edible Oil (36.71 percent), Non-ferrous Metals (33.07 percent), News Print (29.72 percent), Fertilizer (15.60 percent) Pulp & Paper Waste (13.76 percent), Metalli ferrous Ore & Scrap (11.66 percent) and Petroleum Crude and Products (4.44 percent). India’s non-bulk Imports during 1990-91 was US$ 13224 Million recorded a increases to US$ 22361 Million in 1995-96. The export has finally reached to US$ 138691Million in2007-08 (table: 5.12). Import of some items during this period registered a fall. These included Crude oil, Fertilizer (25.55 percent). Import of Rice & Wheat came down to nil during the period under review. Imports of food and related items increased at a very sharp rate during post WTO period also, which raised the imports from $ 1.1 billion in 1995-96 to $2.7 billion during 1998-99. In the last two years some check has been put on these imports

123 | P a g e

Table: 5.12 Imports of Principal Commodities - Us Dollar Commodity/Year

1990-91 1995-96 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08

I. Bulk imports

10848

14314

20816 20263.1 24299.5 29461.5 42400.7 61086.1 84434.2 112748.5

A. Petroleum, crude and products

6028.1

7525.8

15650 14000.3 17639.5 20569.5 29844.1 43963.1 57143.6 79644.5

B. Bulk consumption goods

556.5

969.7

1443

2043.2

2411

3072.8

3104.6

C. Other bulk items

4263.3

5818.9

3722

4219.6

4249

5819.2

9452

II. Non-bulk imports

13224.6

22361

29721 31150.2 37112.6 48687.6 69116.7 88079.6 101315 138690.7

A. Capital goods

5835.6

10330

8941

B. Mainly export related items

3680

5257.5

8059

8260

C. Others

3709

6773.3

12721

13008 13300.7 17691.9 26886.2 31772.4 36374.2 47066.5

Total imports

42217.7

36675

50537 51413.3 61412.1 78149.1 111517 149165.7 185735 251654

4294.2

4599.4

14356.5 22996.5 28504.6

9882.2 13498.2 18278.9 25135 37666.2 47069.2 70840.6

10313.7 12716.8 17095.5 18641

Source: Directorate General of Commercial Intelligence and Statistics. 2007 & RBI Handbook,2008

124 | P a g e

2766.6

17871.7 20783.5

Thus, Import of edible oil accounts for major increase, in food import. Till 1994-95 import of edible oil did not exceed $200 million. During 1998-99 and 1999-2000, edible oil import has risen to more than $1.8 billion (Ref. table 5.12). This has raised Indian’s dependence on import for edible oil close to 40 per cent and is causing adverse impact on domestic oilseed growers. Import of cotton (raw and waste) has also witnessed quantum jump after 1998-99. Despite having large surplus of sugar for export, India witnessed import shock whenever tariffs on sugar imports were low. The trend in India’s import and export during reforms period, show that, decline in India’s agricultural exports after 1997, is consistent with the trend in global trade in agricultural products largely attributable to decline in the international prices. However, India’s farm imports rose sharply during post WTO period despite decline in global agricultural trade. Thus India’s agricultural imports during post WTO period did not follow the trend in the global trade. Second, in the post WTO period trade liberalization has led to sharp rise in import of edible oil and cotton. Horticulture sub sector has seen favorable impact on export during the decade of reforms.

5.6 Import by major product categories: During the year 1990 the total import of Fertilizers increased to Rs. 2742 crores from Rs. 2372 crores in the corresponding period of 1995 recording an increase of 15.60 percent. However import of Crude Fertilizer decreased by 25.55 percent. The import of Petroleum Crude & Products was valued at Rs. 67920 crores during 2001-05 as against Rs. 62059 crores during 2005-2008 showing a growth of 9.44 percent. Import of Pearls and Precious and Semi-precious Stones increased by 5.55 percent to Rs. 23109 crores during year 1990 as compared to Rs. 21893 crores during the corresponding period of the previous year. Import of Capital Goods, largely represented by machinery, including Transport Equipment as well as Project Goods recorded a notable increase during year 1990 over the same period of last year. Machine Tools segment saw a significant rise of 64.03 percent in imports. Import of Project Goods, however, decreased from Rs. 1807 crores in year 1990 to Rs. 1221 crores in year 1990 registering a fall of 32.43 percent. Other items that showed positive import growth were Transport Equipments (62.06 percent) Non-Electrical Machinery (24.17 percent), Electric Machinery (19.34 percent), and Professional Instruments (1.56 percent). Organic and Inorganic Chemical Materials and Medicinal and Pharmaceuticals Products constituted the major components of imports under this category. The 125 | P a g e

imports of organic and inorganic chemicals increased to Rs. 13,149 crores during year 1990 from Rs. 10,794 crores during year 1990, registering a growth of 21.82 percent. Import of medicinal and pharmaceutical products marginally declined to Rs. 2073 crores during year 1990 from Rs.2087 crores during the corresponding period of last year registering a fall of 0.67 percent. The total import of sensitive items for the period 2006 has been Rs 14,472 crore as compared to Rs 12,959 crore during the corresponding period last year thereby showing an increase of 11.7 per cent. The gross import of all commodities during same period of current year was Rs 598287 crore as compared to Rs 46,4866 crore during the same period of last year. Thus import of sensitive items constitutes 2.8 per cent and 2.4 per cent of the gross imports during last year and current year respectively. Imports of fruits & vegetables (including nuts), cotton & silk, spices and tea & coffee have shown a decline at broad group level during the period. Imports of items viz. edible oil, food grains, products of SSI, rubber, marble & Granite, Alcoholic beverages and milk & milk products have shown increase during the period under reference. In the edible oil segment, the imports have increased from Rs 6,753 crores last year to Rs 7,558 crores for the corresponding period of this year. A significant feature of edible oil import is that import of crude oil has gone up by 20.5 per cent and that of refined oil have gone down by 44.9 per cent. The growth in edible oil import is mainly due to significant increase in import of Crude Palm Oil and its fractions, which has gone up by 44 per cent.

126 | P a g e

Table: 5.13 shows Imports of bulk commodities –in terms of rupees during 1990-91 was Rs. 19,464.3 crore recorded a increases to 47881.1 crore in 1995-96. The export has finally reached to Rs. 453933 crore in 2007-08. Non-bulk products Imports during 1990-91 were Rs. 23,728crore recorded a increases to Rs. 74,797 crore in 1995-96. The export has finally reached to Rs. 55,8,378 crore in 2007-08. 5.7 Composition of India’s Import Financial crisis in U.S., which began in the second quarter of 2007, adversely affected India's merchandise exports to U.S. with negative effects becoming pronounced from october 2008 onwards. A likely explanation for this lag is that India's exports grew at a much higher rate to the world as compared to US since 2005. Also, the share of U.S. in India's exports has declined over the years. India’s export basket in terms of its composition has diversified over time and shares of traditional exports have declined in the export basket. This has led to reduced dependence on few exportable products and helped moderate the impact of reduced demand of exports. However, there exists large scope for further diversification. Over a period of time, the significance of South-South trade for India is increasing with the share of developing countries increasing from 17 percent in 1990-91 to 42 percent in 2007-08. In particular, the direction of India's exports is slowly shifting towards Asian developing countries. However, developed countries, like EU and US, are still India's major export markets. In terms of exports of services, there has been exponential rise overtime with CAGR of about 24percent during 2001-2008. U.S. remains the major export market for India's services and software exports remain the major exportable service with 40percent share. India's import growth has declined during the slowdown but the decline has been lower than the decline in exports. Non-oil import growth declined from 29 percent in 2005-06 to 13 percent in 2007-08 while oil imports declined from 47percent in 2005-06 to 17 percent in 2008-09. Unlike growth rate of exports, the growth rate of imports has remained positive. Agricultural trade during 2008-09 shows a healthy balance, which can be boosted further if the export of traditional and new agricultural products like marine products, rice (basmati), other cereals, tea, coffee, cashew nuts, oil meals, floriculture, cotton, Niger seed, etc., can be increased further. The post Uruguay round experience has been a mixed one for agricultural trade in India. While exports in certain areas, have registered a high growth, in certain other areas, the growth rate has 128 | P a g e

not been satisfactory. Exports of rice (basmati and non-basmati), coffee, tobacco, dairy and poultry products, spices, groundnut, guar gum meal, oil meal, fresh fruits and vegetables, meat and its preparations, raw cotton including waste, and paper/wood products have shown significant growth. Exports of pulses, castor oil, and marine products have not shown significant growth. At the global level, average bound tariffs have been reduced in the Uruguay round However, measures like, tariff escalation, variable Tariffs, complex tariffs and also certain nontechnical barriers still persist. Domestic support and export subsidies continue to remain high in a few developed countries. For most high-value agricultural products, including fruits and vegetables, fish, beef, poultry products, and Spices, many importing countries have developed new standards, besides tightening existing standards. These factors have acted as inhibiting forces in actualizing the export growth potential of the country. Other factors that have led to limited exports include infrastructure inadequacies, poor quality awareness, and poor postharvest management. Globalization has led to increased competition from international markets and pressure to dismantle protectionist instruments. Since agriculture in India is more a matter of livelihood than a commercial venture, it is necessary to build capacities in the system so that it is able to withstand the forces of globalization and compete wherever possible. While there are a large number of issues to be addressed at the micro and macro levels, the Capacity Building to Enhance the Competitiveness of Indian Agriculture and Registration of Organic Products Abroad scheme aims to address some of the limited micro-level capacity creation issues. The capacity building under this scheme may be in the form of academic, relevant research, market surveys (domestic and international), or in the form of creation of physical assets critical to agriculture in the international context. The EC-India Joint Working Group on Agriculture and Marine Products has been setup in the Department of Agriculture and Cooperation for facilitating and promoting agricultural trade between India and the European Union. The 3rd meeting of the Joint Working Group was held in New Delhi on 14October 2009 to discuss agricultural policies, growth in bilateral trade, and issues of mutual interest related to agricultural trade.11.9 Negotiations on PTAs/FTAs are at various stages of progress with MERCOSUR (Brazil, Argentina, Paraguay, and Uruguay), BIMSTEC (Bangladesh, Bhutan, Myanmar, Nepal, Sri Lanka and Thailand), the Gulf Cooperation Council (Kuwait, Bahrain, Qatar, Oman, Saudi Arabia, and the United Arab Emirates), Thailand, and the European Union. India has signed the Trade in Goods Agreement 129 | P a g e

with ASEAN countries and comprehensive Economic Partnership Agreement with South Korea in 2009. Agricultural commodities which are vulnerable to global competition and which are crucial for food and livelihood security have been kept out of the purview of these agreements. Besides, stringent rules of origin norms and built-in safeguards have been put in place to protect the interest of farmers.

5.8 India’s Agriculture Export –Import Agriculture and allied products comprises a wide variety of agricultural products covering Cereals, Pulses, Tobacco, Spices, Nuts and Seeds, Oil Meals, Guargum Meals, Castor Oil, Shellac, Sugar and Molasses, Processed Food, Meat and Meat Products, etc. During 1990-2008 the exports of this group recorded an increase of Rs. 6018.7 crores to Rs. 74094.3 crores Cereals (except Rice) Groundnuts, Guar gum Meals, Shellac, Processed Food & Spirit & Beverages registered growth in exports. The exports of Marine Products stood at Rs. 960 crores during 1990-91 recording a decline of 11.7 percent over Rs. 6926 crores during 2007-2008. The USA, EU and Japan continued to be the major destination of marine exports from India. As regards the composition of India's global agricultural trade, the major items of her exports were oil meals, tea, coffee, rice, cashew, raw cotton, spices, fruits and vegetables, marine products, etc. The major items of her agricultural imports were edible oils, cashew nuts, pulses, wheat, sugar, raw cotton, etc. As per economic review 2009, the share of major items in India's agricultural trade during pre-WTO and post-WTO period. During pre-WTO period, the major export items and their respective share in total exports were Meat & prep 0.2 percent and 0.7 percent in the year 1990 & 2000 finally it stood at 1.1 percent during the year 2008, oil seeds 0.8 percent share it reached to 1.5 percent share in 2008, Tea’s percentage share in 1990

was 22.1 percent, it

reached to 14, & 9 percent during the year 2000 and 2008. In case of rice 6.4 percent&10.2 percent and 1.1 percent in the same period, coffee percentage share in1990 was 1.7, it reached to 2.3 &2 percent during the year 2000 and 2008. Spices export was in said period 7.7,10.3and14.5percent Tobacco both Manu and u/Manu together share was 2.4 during 1990 in the year 2000 it marginally gain of .3 percent oil seeds exports share was 0.8 percent during the year 1990 it has reach to 1.5percen in year 2008. These eight items accounted for 78.9 per cent in India's agricultural exports during 1990-95 on an average per annum. However, the situation changed during post-WTO period. During 1995-2004, the share of these eight major items in 130 | P a g e

India's agricultural exports diminished to 67 percent on an average per annum. Whose exports have been increased during the post-WTO period, were rice other than basmati, pulses, wheat, coffee, spices, sesamum seed, groundnut, guar gum meal, castor oil and sugar. The share of these ten items in India's global agricultural exports increased from 17.9 per cent during pre-WTO period to 32.7 per cent during post-WTO period on an average per annum. The removal of export restrictions on rice in 1994 has been a factor in growth of rice exports during post-WTO period.

5.9 India’s Total Exports vs. Agri Exports (US Billion Dollars) India’s total exports vs agri exports has shown in Table 4.14 by the figure it was clearly seen that, Export of agriculture products increased from US$ 6.0 bn in 2000-01 to US$ 11.2 bn in 2006-07. However, the share of agriculture and allied products in total exports has come down from 13.6 percent to 8.9 percent during the same period. During the period 2000-01 to 2006-07, India’s overall exports grew faster than agro exports. Table 5.14 India’s Total exports vs. Agriculture exports Year

Total export

Agri and allied Export

Growth in Total export

2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07

44.1 43.8 52.7 63.8 83.5 103.1 126.3

6.0 5.9 6.7 7.6 8.4 9.6 11.2

20.1 -1.7 20.3 21.1 30.9 23.5 22.5

Growth in Agri and allied Export 6.6 -0.7 13.6 13.4 10.5 14.3 16.7

Source: CMIE, India Trade data base, 2008

India is among the 15 leading exporters of agricultural products in the world. As per International Trade Statistics, 2009, published by the WTO, India's agricultural exports amounted to US$ 21.37 billion, with a share of 1.6 per cent of world trade in agriculture in 2008. Agricultural exports have shown an increasing trend. Agricultural exports have increased from Rs. 79,039.72 crore in 2007-08 to Rs. 85,961.82 crore in 2008-09, registering a growth of about 8.76 percent

131 | P a g e

The most significant positive aspect of our agricultural exports is that a majority of the items in the agriculture export are net foreign exchange earners, with negligible import content unlike high import content in many manufactured products. Export of agriculture products increased from US$ 6.0 bn in 2000-0 1 to US$ 11.2 bn in 2006-07. However, the share of agriculture and allied products in total exports has come down from 13.6percen to 8.9% during the same period (Ref Table 5.14). During the period 2000-01 to 2006-07, India’s overall exports grew faster than agro exports. The difference has always been substantial except in 2001-02 where both experienced negative growths. India’s major agro exports (apart from marine products) include rice, oil meals, cashew, spices, tea, and wheat. The non-traditional exports include horticulture and floriculture products such as vegetables, fruits and their processed products. Star performers have in fact been the traditional agro exports like basmati rice, oil meals and castor oil. To be precise, share of oil meals in India’s agriculture exports jumped to 8.6percen in 2004-05 from 4.6percent during 2001-02. Share of basmati rice also shot up from 6.3percent to 7.6 percent during the same period. This was due to a significant average growth rates experienced over the last three years of 62 percent and 22 percent, respectively. This trend clearly reflects increasing importance of traditional agro exports, necessitating the need to diversify into non-traditional export products. 5.10 Direction of India’s Agricultural Exports The agricultural commodities from India are mainly exported to many of the developed and emerging economies. Destination wise analysis shows that during 2008-09 developing countries and OECD countries were the major markets for India’s export accounting for 37.6 percent, 37.4 percent share respectively. Another major contributor was OPEC with 21.2 percent shares. Country-wise the UAE become the single largest destination for India in 2008-09 with a share of 13.1 percent in. India’s total exports by replacing the U.S which remained India’s largest export market for a number of years UAE was followed by the US (1 1.4percent), China (5. 1 percent), Singapore (4.5 percent), Honkong (3.6 percent) and UK (3.6 percent). The detail of India’s direction of exports to principal countries in rupees is shown in table 5.15, Tea export was Rs.30.1 crores during 1990-91 in 1995-96 it has reached to Rs. 131.3crores finally it stood at 286.6 for UAE in the year 2007-08,followed by Russia in the same year almost same value. Incase of Germany the value wise export not very impressive from the year 1990-91 to 2007-08. 132 | P a g e

Coffee was main export for India that was Rs.17 crores during 1990-91 in 1995-96it has reached to Rs. 197.7 crores finally it stood at 464.5 for Italy in the year 2007-08,followed by Russia in the same period Rs.146 crores to Rs.156.5 crores value. In case of USA the value wise export from the year 1990-91 to 2007-08 was Rs 6.9 to Rs 40.5 crores. Rice export are also very important for India, Export of rice to Bangladesh followed by Saudi Arabia was Rs951 crores and Rs. 519crores during 1995-96 it has reached to Rs. 2646 crores & Rs. 1433 crores. Tobacco export has second position for UAE i,e Rs 223.2 crores., during the year 2007-08, but in 1990-91only it was Rs. 3.4 crores. First position was Belgium Rs. 17.8 crores. In 1990-91 it reached to Rs. 246.1 crores in the year 2007-08 (Ref Table 5.15). Table: 5.15 Exports of Select Commodities to Principal Countries - Crore Rupees

Commodity

199091

199596

200001

200102

200203

200304

200405

200506

200607

200708

Tea Germany

42.2

75.5

92.9

86.5

95.3

125.5

119.2

112.8

101.1

109.2

Iran

61.8

5.4

53.2

39.4

11.8

8.5

113.1

80.9

100.6

171.7

Russia

597.3

476.6

479

403

287.1

260

234

237.8

279.1

285.2

U.A.E.

30.1

131.3

270.2

238

247.4

261.9

271.8

242.2

177.4

286.6

1730.7 1969.5

2034.2

Total

1070.1

1171. 1 1788.7

1719.2 1652.1

1637.4 1840.3

Coffee Italy

17

197.7

126.9

145.9

171.5

197.6

228.2

366.3

450.9

464.5

146.2

341

288.2

318.5

223.6

211.5

181.8

298.4

230.5

156.5

U.K.

1.1

14.2

26.9

16.3

7.3

8.6

10

12.2

12.3

10.9

U.S.A

6.9

165

78.1

50.6

22.8

17.7

32.6

24.7

38.1

40.5

1502. 9 1184.9

1094.9

994

1085.9 1069.1

1588.7

1969

1872.3

Russia

Total

133 | P a g e

252.2

Rice Bangladesh Saudi Arabia Singapore

0 143.3

951.8

297.6

80.9

564.9

904.3

836.7

519.1 1269.6

1309.4

1245

1098.2

1236

552.6

489.3

2646.8

1892.9 1874.1

1433.8

1.1

8

32.8

51.2

91.6

39.2

38.4

65.2

56.4

68.4

U.A.E.

25.7

182.7

113.2

83.9

140.7

236.5

368.5

399.9

542.4

1516.7

U.K.

38.4

119.8

306.2

196.3

208.6

223.2

284.2

228.4

228.7

320.6

6221.3 7035.9

11750. 9

Total

461.6

4568. 1 2932.2

3174.1 5831.2

4168 6768.9

Tobacco Belgium

17.8

23.5

62

114.3

114.1

95.8

117.4

162.6

206.1

246.1

4

9.5

46.4

22.3

40.8

62.5

52.2

50.1

53.3

76.3

Russia

105

75.2

126.9

104.9

116.6

96

142.9

173.8

130.7

116.6

U.A.E.

3.4

23.2

70

60

103.4

107.2

72.3

98.7

166.6

223.2

263.4

446.8

867.2

1330.7 1685.2

1931.9

19.5

43.5

70.8

50.2

49.9

62.6

76.2

47

173.6

198.8

5.3

61.6

94.9

69.7

68.2

92.8

92.9

108.7

155.4

211.1

U.K.

10.5

47.2

112.6

116.1

118.7

103.1

115.7

140.1

188.2

224.9

U.S.A

38.5

172.5

344.6

345.3

380

330

387.3

457.9

591.2

830.1

Total

233.9

2116 3157.9

4204.5

Netherlands

Total

807.7 1022.9

1096.5 1254.6

Spices Bangladesh U.A.E.

793.5 1617.7

1497 1655.5

1544.2 1883.2

Source: Directorate General of Commercial Intelligence and Statistics. 2007 & RBI Handbook, 2008

UAE in the same period the value wise export was Rs. 273.8crores, In case of Netherlands the value wise export was impressive from the year 1990-91 to 2007-08 i.e. Rs. 65.7 crores to Rs. 243.8 Crores. Marine Products export was very impressive Japan, China was major importer from India the value of export was Rs.475 crores during 1990-91 in 1995-96it has reached to Rs. 134 | P a g e

1393 crores finally it reduced to Rs. 1083 crores for Japan, for the same period it was. Followed by China the value of export was in 1995-96 it was to Rs. 46 crores finally it stood at Rs. 673.2crores, exports of select commodities to principal countries - (Rupees crore) are shown Table: 5.16. The Cashew including cashew nut shell liquid export was Rs. 57 crores during 1990-91 in 1995-96, it has reached to Rs. 349.3 crores finally it stood at Rs. 798.6 crores for USA in the year 2007-08.

Table: 5.16 Exports of Select Commodities to Principal Countries - Rupees (Rupees crore)

Commodity

1990 1995-91 96

200001

200102

200203

200304

200405

200506

200607

2007-08

Cashew including cashew nut shell liquid Netherland

65.7

209.2

380.1

255.6

248

205

320.1

410.7

378.2

243.8

SaudiArabia

0.1

11

37.7

28.5

43.3

30.6

54.9

60.8

67.1

68.4

U.A.E.

5.4

38.4

83.7

61.8

89.4

92

134.7

189.2

207.7

273.8

U.S.A

57

349.3

924.4

889.9

1086.1

828.8

1172.7

984.7

975.3

798.6

2489.1 2593.4

2506.5

2234.8

447

1237. 2 2053.5 1793.9

1.7

339.5

313.4

387

159.4

590.6

367.9

637.7

694.1

851.3

0

284.5

210.2

224

261.5

236.3

339.6

607.3

729.8

886.5

Thailand

30.1

213.8

158.6

349.1

17.8

275.1

216.4

289.8

364.9

615.4

Total

608. 5

2348. 6 2044.7 2262.9

1487.4 3348.4

3177.6

4875

5504.3

8140.5

495.5

666.9

516.1

673.2

1225 1133.6

1278.2

1083.6

Total

2061.5 1704.8

Oil Meals Indonesia Korea

Marine Products China Japan 135 | P a g e

0

46

475.

1393.

529.1

404.9

2329.3 1641.8

571.5

408.2

1555.2 1112.8

2

1

Spain

59.7

155.9

203.8

288.2

385.8

302.4

459.3

516

569.9

633.6

U.A.E.

9.6

337.7

325.1

206.8

167.6

155.5

211.8

246.5

278.5

236

U.S.A

113. 4

329.4 1091.7 1294.1

1885.8 1888.4

1512.8 1555.8

1289.3

886.1

960

3381. 1 6367.3 5898.3

6928.1 6105.6

6469.2 7035.9

8001

6926.7

China

2.1

232.3

593.7

986.5

14490

15083

21485

Japan

671. 5

926.2

542.9

522.8

1491.8

822.8

1125.7 1634.3

1489.7

1016.2

Korea

116. 7

158.4

101.1

97.2

253.6

123

292.1

228.5

381.5

264.4

Total

1049 .1

1721 1633.8 2033.6

4200.4 5173.3

14726

16829

17656

23400

Total Iron Ore

1976 3784.4

12061

Source: Directorate General of Commercial Intelligence and Statistics. 2007 & RBI Handbook, 2008

Table: 5.17 shows direction of foreign trade (Rupees crore) the export and import for OECD countries during 1990-91 export was Rs. 18,3,89.3 crore & import Rs. 24712.6 crore, it has reached to Rs 10,3,119.7 crore Rs 98,4,39.1 crore in 2001-02 further in 2007 -08 it reached to Rs. 25,2,205 crore & Rs. 352061crore. For Eastern Europe countries during 1990-91 export was Rs. 5819.2 crore & import was Rs. 3377.2crore it has reached to Rs 5984.2crore Rs 4515.6 crore in 2001-02 further in 2007 -08 it reached to Rs. 13622.5 crore & Rs. 21191.9crore. In OPEC countries during 1990-91 export was Rs. 1830.9crore & import was Rs. 7040.7 crore, it has reached to Rs 24916.5crore Rs 14144.4crore in 2001-02, further in 2007-08 it reached to Rs.107379 crore & Rs. 306286.7crore,

but in case of developing countries during 1990-91

export was Rs. 5560 crore & import Rs. 8057.1crore it has reached to Rs 64553.2 .5crore Rs 60933.3 crore in 2001-02 further in 2007 -08 ,it reached to Rs. 4694.3 crore.

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28, 0102 crore & Rs. 32,

Table: 5.17 Direction of Foreign Trade (Rupees crore) Group/ Country

1990-91

1995-96

2000-01

2001-02

Exports Imports Exports Imports

Exports Imports

Exports

18389.3

24712.6

59223

64254.2

92090.3

103119.7

98439.1

A.EU

8950.8

12680.4

29129

34463.9

47560.9

48015.4

46956.9

49773.9

B.NorthAmerica

5077.1

5803.9

19487

14191.4

45508.9

15587.9

43390.9

17546.1

C.Asia and Oceania

3400.5

4825.7

8870.4

11880.7

10341.3

13633

9493.9

16857.7

961

1402.5

1736.5

3718.2

3826.7

14853.5

3278.1

14261.5

II.OPEC

1830.9

7040.7

10299

25570.2

22156.9

12283.6

24916.5

14144.4

III.Eastern Europe

5819.2

3377.2

4482.2

5598.7

6020.4

3884.2

5984.2

4515.6

5560

8057.1

30768

27245

59447.1

50966.4

64553.2

4683.1

6050.2

24444

21494.7

45857.6

38646.7

49278.4

44185.3

957.1

235.8

5755.3

858

8810.4

2128

9662.4

2725.7

20636.7

37047.2

36518.7

I.OECDcountries

D.Other OECD countries

IV.Developing countries A.Asia a)SAARC b) Other Asian developing countries

3726

5814.4

18689

Imports

39616

41459.7

B.Africa

706.2

1027.6

5060

3785.6

8937.8

9119

10782.8

11934.6

C.Latin American countries

720.7

170.8

1264.1

1964.7

4651.7

3200.7

4492

4813.4

V.thers/unspecified

958.2

5.3

1580.4

10

8708.7

71648.3

10444.4

67167.4

32557.6

43192.9

Totaltrade

Cont…

137 | P a g e

106353 122678.1

203571 230872.8

209018 245199.7

Group/ Country

2002-03

2003-04

Exports Imports Exports Imports

Exports Imports

I.OECDcountries

127679

112766

A.EU

55763.3

60696

63827

67627.1

78807.9

84080.1

B.NorthAmerica

56109.7

24245.4

56306

26471.4

65746.3

34943.6

C.Asia and Oceania

11788.6

15726.2

10934

24794.5

13216.1

32295.1

4017.6

12098.9

5084.5

16995.7

6206.4

28361.8

33318.2

16838.5

43858

25775

59342.7

45032.4

6040.1

5516.4

7147.3

7484.9

7998.8

11296.5

IV.Developing countries

86445.2

75923.4

104697

94509.7

141971 128523.1

A.Asia

67661.4

54704.9

84674

74762.4

112187 101461.1

a)SAARC

13183.5

2477.7

19061

3073.2

b) Other Asian developing countries

54477.9

52227.2

B.Africa

12465.2

16203.6

14219

14262.7

20123

17660.1

C.Latin American countries

6318.6

5014.9

5804.5

5484.6

9660.7

9401.9

V.thers/unspecified

1654.6

86161.2

1513

95449.4

2050.9

136532

Totaltrade

255137

297206

D.Other OECD countries II.OPEC III.Eastern Europe

138 | P a g e

136151 135888.6

2004-05

65613

71689.1

293367 359107.7

163977 179680.5

19952.7

92234

4269.3

97191.7

375340 501064.5

Cont… Group/ Country

2005-06

2006-07

Exports Imports Exports Imports

2007-08 Exports Imports

I.OECDcountries

202936

229323

235333 289771.8

252205 352061.3

A.EU

99106.1

111354

116549 128651.6

132301

148201

81351

45932

90393

61148.1

88482.1

92565.3

15249.5

40845.1

19416

53708.4

20783.9

58362.9

7229.2

31191.8

8975.8

46263.7

10637.8

52932

67482.8

49458.4

93668 253759.3

107379 306286.7

III.Eastern Europe

8767.9

16796.7

11354

13622.5

IV.Developing countries

175927

167754

229705 270569.6

280102 324694.3

A.Asia

137165

134815

170190 214319.6

207251 258238.7

a)SAARC

24561.4

6257.2

29274

b) Other Asian developing countries

112603

128558

140916

B.Africa

25231.5

20994.6

C.Latin American countries

13530.9

V.thers/unspecified Totaltrade

B.NorthAmerica C.Asia and Oceania D.Other OECD countries II.OPEC

22682.6

6820.7

21191.9

38719.7

8500.6

207499

168531

249738

40182

30785.2

50301.7

41693.1

11944.5

19333

25464.8

22549.6

24762.5

1304.5

197077

1719

3722.9

2555.5

8077.6

456418

660409

571779 840506.3

655864

1012312

Source: Directorate General of Commercial Intelligence and Statistics. 2007 & RBI Handbook, 2008

139 | P a g e

5.11 Performance of India’s Agricultural Export Table 4.17: shows major agricultural exports and their share in total agricultural export, before independence; India exported raw materials and foodstuffs and imported finished goods. Exports were decreased due to partition and India announced policy of self-sufficiency. There was neglect to traditional agricultural export and active discouragement of exports in first two plan periods. Increase in exports was observed in 1970-71 due to export promotion policies, rise in price etc. Stagnation in Indian Agricultural exports was observed from 1980 to 1990 due to stagnation in world trade flow. During 1960-61 to 2008-09 whole period almost no changes in coffee i.e. 2.5 Percentage Share, Maximum percentage reduced in case of Tea & mate i.e. 43.6 to 3.1. But all agri. & allied products export increased from 596 US $ million to 16,914 US $ million during the same period (ref table 5.18). Table 5.18: Major Agricultural Exports and their Share in Total Agricultural Export Percentage Share, (US $ million) Commodities 1960-61 1970-71 1980-81 1990-91 2000-01 2008-09 Coffee 2.5 5.1 10.4 4.0 4.1 2.6 Tea & mate 43.6 30.4 20.7 16.9 6.2 3.1 Oil cakes 4.9 11.3 6.1 9.6 7.1 12.0 Tobacco 5.7 6.7 6.8 4.2 3.0 4.0 Cashew kernels 6.7 11.8 6.8 7.1 7.2 3.4 Spices 6.0 7.9 0.5 3.8 5.7 7.4 Sugar & Molasses 10.1 6.1 1.9 0.6 1.8 5.3 Raw Cotton 4.2 3.0 8.0 13.4 0.8 3.3 Rice 1.1 10.8 7.3 10.2 13.0 Fish & Fish 1.7 6.2 10.5 15.2 22.2 8.2 Products Meat & Meat 0.3 0.6 2.7 2.2 5.1 6.2 products Fruits,veg & pulses 2.2 2.5 3.9 3.4 5.0 5.2 Mis. Processed 0.3 0.6 1.7 3.4 4.5 4.5 items All Agri. & allied 596 644 2,601 3,521 6,256 16,914 products Total (100.0) (100.0) (100.0) (100.0) (100.0) (100.0) CAGR 0.78 15.0 3.07 5.92 13.24 Source: Computed from the Data obtained from Economic Survey, 2009-10 140 | P a g e

From 1991 due to economic liberalization and trade reforms, exports show increasing trend. Exports grew by a CAGR of 5.92 percent during 1991 to 2000. After 2001, there was increase in agricultural exports. Exports grew by a CAGR of 13.24 percent from 2001 to2009. This growth was due to export of cotton raw, castor oil and cereals.

India’s export was of the order of Rs 860 billion in 2008-09, as compared to Rs. 60 bn. in 199091, Rs. 286 bn in 2000-01 and Rs.790 bn. In 2007-08 The agro exports from the country constituted 18.49 percent of the total exports of India in 1990-91. This share came down to about 14.23 percent in 2000-01 and to 10.22 percent in the year 2008-09 Ref. Table4.18.

5.12 India’s Balance of Trade: Total and Agricultural The Balance of Trade from agriculture remains always positive since 1991. The surplus generated in agricultural trade would help enhancing non-agricultural imports, which would promote growth in all sectors of the economy. The main destination of India’s agricultural exports include Saudi Arabia, UAE, Bangladesh, Malaysia, USA, UK, Kuwait, Iran, Vietnam, Indonesia etc. The products that have registered higher growth (CAGR) are-cotton raw including waste, castor oil, other cereals, oil meals, gaur gum meal, poultry and dairy products, meat and reparations, spices, fruits and vegetables etc. The products having high instability inexpert are sugar, groundnut, jute, cotton raw including waste, rice other than basmati, wheat, other cereals etc.

5.13 Trend in India’s Agricultural Exports and imports: 1990-91 to 2008-09 Total Agricultural exports show a continuous increasing trend since 1990-91 to 2008-09. However the year 1999-2000 shows decrease in exports by 0.01percent, due to fall in export of rice other than basmati, wheat, and cotton etc. We observe high growth of exports 1991-92, 1993-94, 1995-96, 2006-07, and 2007-08 due to rise in export of marine products, oil meal etc., whereas slow growth was observed in the year 1999-00, 1997-98 and 1998-99. Percentage share of exports was maximum in the year 1995-96, 1996-97and 1997-98, and that was minimum in 2008-09. In the similar way trend analysis of 35 agricultural commodities was done to understand the prospects of export. 141 | P a g e

As regards imports, the years 1992-93, 1995-96, 2000-01, 2005-06 and 2008-09 show negative growth and the growth in imports was high in the year 1994-95. Percentage share of imports was maximum in 1998-99, 1999-2000 and minimum in 2008-09 as world prices were much higher than Indian prices. By using least squares method to compute the regression coefficients and through regression model we can predict exports for the given year.

For total agricultural exports the linear trend during 1990 to 2009 has been estimated to be as Y = 3747.8 X- 4980.7 This indicates that export was rising at an annual rate of 3747.8 crores. The Compound Annual Growth rate has been 17.92 % During this period, besides the average annual value of export during 1990 to 2001 has been estimated to be Rs 17962.24 & that in y = 3747.8x - 4980.7 y = 1723.1x - 3145.2 The period 2001 to 2009 was Rs 52497.8. The standard deviation and coefficient of variation have been estimated to be 8326.87, 46.24 respectively for 1990 to 2001, 21112.61, and 40.23 respectively for 2001-09. As regards imports, the linear trend during1990 to 2009 has been estimated to be Y = 1723.1 X – 3145.2 which shows that imports were rising at an annual rate of Rs.1723.1crores. 5.14 CAGR and Instability Index for Agricultural Exports 1990-09 The period from 1990-91 to 2008-09 is split into different sub-periods, viz., the period from 1990-91 to 2000-01, and from 2001-02 to 2008-09. Growth rates are used to measure the past performance of exports of commodities (Table 4.19). The growth is analyzed by Using Compound Growth Rate r = (Antilog b – 1) * 100 Instability can be measured by Ix = C.V. √ 1- R 2 Where, CV is the coefficient of variation and R 2 is corrected coefficient of determination of the trend function of export earnings adjusted by the number of degrees of freedom. Here for 1990-01, degrees of freedom are 10, for 2001-09 it is 7 and for 1990-09 it is 18.

142 | P a g e

Table 5.19 CAGR and Instability Index for Agricultural Exports 1990-2009 CAGR%

Instability Index

1990-2001 2001-2009 1990-2009 1990-2001 2001-2009 1990-2009 Total Agri Products

17.33

17.11

13.84

14.46

6.8

15.53

Total National Exports

18.55

21.93

17.92

9.46

2.71

9.68

Source: Calculated from secondary data.

The growth rate for total exports is higher than agricultural exports during 1990-2009. The instability index in agricultural exports is higher than the total National exports. Therefore more risk is observed in exports of agricultural products. 5.15 Prospects for India India has a competitive advantage in several commodities for agricultural exports because of self-sufficiency of inputs, relatively low labor costs and diverse agro-climatic conditions. These factors have enabled export of several commodities such as cereals, cashew, tea, coffee, spices, oil meals, fruits and vegetables and tobacco. An analysis of growth rates using trend analysis, Compound Annual Growth rate and instability index reveals following trends for the last decade Steady growth items: marine products, spices, fruits and vegetables, cashew and basmati rice. Others that have shown high growth are sesame and Niger seeds, meat preparations and paper and wood products. Negative growth items: Tea, coffee, shellac, nuts and seeds whose export values have declined over this period New high growth items: Basmati rice, oil meal, castor oil, processed fruits and juices, floriculture products, meat and meat preparations etc. Other items with inconsistent growth: Exports of the items which have been fluctuating are sugar and molasses, cotton raw including waste, rice other than basmati, wheat, other cereals, gaur gum meal etc. The following products have good export potential Basmati Rice, oil meal, Floriculture, marine products, spices, processed food, fresh vegetables, fresh fruits, poultry products, dairy products, processed meat, etc. India can concentrate more on nontraditional

143 | P a g e

exports. The production has to be increased, as there is huge demand for it from various European and Gulf countries. This position continued in 2009-10 and the first half of 2010-11. This is mainly due to India’s exports and imports of gems and jewellery items followed by POL to the UAE. In both2009-10 and 2010-11, India’s exports to the UAE were higher than imports, while India’s exports to China are lower than imports. The high and rising trade with the UAE may also be due to circular trading to some extent.7.36 Export-import ratios in Table 5.20 show that among its top 15 trading partners, India had bilateral trade surplus with five countries, namely the UAE, USA, Singapore, the UK, and Hong Kong in 2009-10and the first half of 2010-11. India’s trade deficit with the USA and Singapore in 2007-08, turned into trade surplus thereafter. The export-import ratio fell in 2008-09 in the case of Hong Kong, though it recovered in2009-10. India’s exportimport ratio in the case of China is not only low but has been stagnating at around 0.3 though it increased to 0.4 in 2009-10, to again fall to 0.3 in the first half of 2010-11.7.37 The UAE has displaced the USA as the topmost destination of India’s exports in 2008-09 and 2009-10 with an export share of 13.2 percent and 13.4 per cent respectively. In 2009-10, India’s exports to the top two destinations, i.e. the UAE followed by the USA, registered growth of (-) 2.1, and (-) 7.6, percent respectively. The top 15 trading partners increasing by 5.5 percentage points to 60.3 percentage in 2007-08 compare to 2001-01, again first half of 2010-11 it has come down to 59.8 percent. During the year 2007-08 USA was first position, in the passage of time UAE becoming largest trading partner followed by China during the year 2008-09.22 Table 5.19 shows India’s export from 1990-91 to 2007-08 OECD country has reduced from 56.5 percent to 38.8 percent; OPEC countries increased the share from5.6 percent to 16.5 percent. Most interesting point is that developing countries increased the share from 17.1 to 42.3 percent.

22

Economic survey page 169

144 | P a g e

Table: 5.20 Share of Region/Country in India’s Exports: 1990-91 to 2007-08 Group/ country I.

OECD A. B.

C.

II III

IV.

V.

D. OPEC 1 Eastern 1. Developing countries A.

EU North America 1 2 Asia &Oceania 1 2 Other OECD countries U.A.E. Russia

Asia a) b) B. Africa C. Latin American Others / un-specified Total Trade

1990-91 1995-96 2000-01 2005-06 2007-08 56.5 55.7 52.7 44.5 38.8 27.5 27.4 23.4 21.7 20.2 17.8 13.8 Canada 0.9 1.0 1.5 1.0 0.8 U.S.A 14.7 17.4 20.9 16.8 13.0 5.1 3.3 3.1 Australia 1.0 1.2 0.9 0.8 0.7 Japan 9.3 7.0 4.0 2.4 2.2 1.9 1.6 1.7 5.6 9.7 10.9 14.8 16.5 2.4 4.5 5.8 8.3 9.7 17.9 4.2 3.0 1.9 2.1 16.1 3.3 2.0 0.7 0.6 0.0 0.0 0.0 17.1 28.9 29.2 38.5 42.3 14.4 23.0 22.5 30.1 31.5 SAARC 2.9 5.4 4.3 5.4 5.7 17.6 18.2 24.7 25.8 Other Asian country 2.2 4.8 4.4 5.5 7.6 0.5 1.2 2.3 3.0 3.2 2.9 1.5 4.3 0.3 0.4 100.0 100.0 100.0 100.0 100.0

Source: Estimated from RBI “Handbook of statistics on Indian Economy”, Directorate General of Commercial Intelligence and Statistic, Economic Review 2009

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State-wise exports as reflected in the data on state of origin of exports of goods show clear domination of Maharashtra and Gujarat. Tamil Nadu, Karnataka, and Andhra Pradesh fall in the second rank of exporting States. In 2009-10, the growth of exports from all the States was negative, except Haryana, Kerala, Goa, and Rajasthan. High negative export growth was registered by Delhi, followed by Uttar Pradesh, West Bengal, and Karnataka. In the first half of 2010-11 export growth to all destinations was positive except for Kerala (Table 5.21). To encourage exports outlay under the Assistance to States for Developing Export Infrastructure and Allied Activities (ASIDE) scheme for the Eleventh Five year plan was increased to 3793 crore. BOX 5.1 Indian Agricultural Export Restrictions Export restrictions are one of several policy instruments the central government uses to address food price inflation and maintain stockpiles of food to feed the poor through the Public Distribution System. Export restrictions are of three types—export ban, minimum export prices (MEPs), and export taxes. Export ban prohibit the export of sensitive nature of agricultural commodities, government is required to monitor their price and availability in the economy on regular basis. This entails ordering restrictions of import and export of various agriculture items. Products, regardless of international and domestic price levels. MEPs are prices below which exporters cannot sell their product, making Indian goods less competitive overseas. Export taxes are levied on the value of exports, again making Indian product less competitive. In 2007, the Indian government began significantly restricting exports of essential commodities as global food prices increased and Indian strategic food reserves, or stocks, declined below government target levels. Reportedly, these export restrictions were also imposed because of the government’s desire to keep food prices low in the run-up to the national elections in early 2009. Wheat. On February 9, 2007, the government banned exports of wheat and wheat products until December 31, 2007, a prohibition that was later extended indefinitely. Non basmati rice. Effective October 9, 2007, the government banned exports of all non basmati rice to ensure adequate rice availability in the domestic market. On October 31, 2007, however, because of the demands of rice exporters, the outright ban on exports was replaced by an MEP of $425 per ton, which was later increased to $1,000 per ton on March 27, 2008. On April 1, 2008, the 146 | P a g e

government again banned exports. Basmati rice. Effective March 5, 2008, an MEP of $950 per ton was imposed, which was gradually increased to $1,200 per ton on April 1, 2008. In addition, an export tax of Rs. 8,000 per ton was imposed at that time. On January 20, 2009, the MEP was lowered to $1,100 per ton, and the export tax was abolished. Corn. On March 5, 2007, the government banned exports of corn by the private sector and channeled exports only through state trading enterprises for a period of six months. Effective July 3, 2008, the government banned exports of corn through October 15, 2008. Vegetable oils. On March 17, 2008, the government banned exports of vegetable oils. This prohibition was extended to March 16, 2010. Pulses. Effective June 22, 2006, the government imposed a ban on the export of pulses, with the exception of kabuli chana (garbanzos). Milk and milk products. On February 9, 2007, the government imposed a ban on exports of skimmed milk powder, skimmed milk food for babies, whole milk, whole milk for babies, and other milk products until September 30, 2007. Source: Aradhey, India: Oilseeds and Products, April 16, 2009, 22; Govindan, India: Grain and Feed, February 20,2009, 15; Govindan, India: Grain and Feed, February 20, 2008, 7; and Dhankhar, India: Dairy and Products, November 5, 2008.

Before economic liberalization Primary sectors had more percentage share than other two sectors in world trade. During 1990-91 Tertiary sectors high growth rate and growth trend is still continued upto 2008-09. The growth in the agriculture sector has been the most volatile and also the least among the three sectors. The share of total exports in the total GDP was 5.72 percent in the year 1990-91, which increased to 13.89 percent during 2007-08. Similarly, the share of total imports in the total GDP was 7.39 percent, which increased to 21.28 percent in the same period. Export volume of food and food articles like rice, coffee, spices, and oilseed cake’s are in negative growth rate.

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The post WTO period showed increase in ratio of imports to GDP whereas ratio of exports to GDP for agriculture sector has decline. The post WTO period has been adverse to export but favorable for imports. India’s manufacturing exports are highly concentrated in low-technology goods and the share of high-technology manufactured goods in its total exports has barely changed since the mid-1990s. Exports of traditional products from India like spices, tea and coffee and groundnut could not maintain upward trend. But in the case of horticultural Export maintained upward trend during post WTO period, but total export of these products is low among the primary products, agriculture and allied products showed a decline of 4.9 per cent as against a high growth of 45.3 per cent during the same period. The share of agricultural products in India's global imports during post-WTO period has been increased to 6.1 per cent per annum, as compared to 4 per cent during pre-WTO period. The major items, whose share has been increased in India's global imports during post WTO period, were edible vegetable oils, raw cotton and spices due to economic liberalization and trade reforms. Destination wise analysis shows that during 2008-09 developing countries and OECD countries were the major markets for India’s exports accounting for 37.6 followed by OPEC. Country-wise the UAE become the single largest destination for India in 2008-09 with a share of 13.1 percent. During the post Uruguay round experience has been a mixed one for agricultural trade in India. While exports in certain areas, have registered a high growth. Exports of rice (basmati and nonbasmati), coffee, tobacco, dairy and poultry products, spices, groundnut, guar gum meal, oil meal, fresh fruits and vegetables, meat and its preparations, raw cotton including waste, and paper/wood products have shown significant growth. Exports of pulses, castor oil, and marine products have not shown significant growth Exports grew by a CAGR of 5.92 percent during 1991 to 2000. After 2001, there was increase in agricultural exports. Exports grew by a CAGR of 13.24 percent from 2001 to2009. State-wise exports as reflected in the data on state of origin of exports of goods show clear domination of Maharashtra and Gujarat. How Gujarat agriculture performed

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