ASSIGNMENT

BALANCE OF PAYMENT IN INDIA

PREPARED BY:- SAJID KARBHARI

PGCCM (KOTAK BATCH III)
1|Page

Balance Of Payments Position in India

Definition:
Balance of payments accounts are an accounting record of all monetary transactions between a
country and the rest of the world. These transactions include payments for the country's exports
and imports of goods, services, financial capital, and financial transfers.
In simple words, it is the method countries use to monitor all international monetary transactions
at a specific period of time. Usually, the BOP is calculated every quarter and every calendar
year. All trades conducted by both the private and public sectors are accounted for in the BOP in
order to determine how much money is going in and out of a country. If a country has received
money, this is known as a credit, and if a country has paid or given money, the transaction is
counted as a debit. Theoretically, the BOP should be zero, meaning that assets (credits) and
liabilities (debits) should balance, but in practice this is rarely the case. Thus, the BOP can tell
the observer if a country has a deficit or a surplus and from which part of the economy the
discrepancies are stemming.
In other words:
The balance of payments of a country is a systematic record of all economic transactions
between the residents of a country and the rest of the world. It presents a classified record of all
receipts on account of goods exported, services rendered and capital received by residents and
payments made by theme on account of goods imported and services received from the capital
transferred to non-residents or foreigners.
2|Page

Purpose:

The BOP is an important indicator of pressure on a countrys foreign exchange rate, and
thus on the potential for a firm trading with or investing in that country to experience
foreign exchange gains or losses. Changes in the BOP may predict the imposition or
removal of foreign exchange controls.

Changes in a countrys BOP may signal the imposition or removal of controls over
payment of dividends and interest, license fees, royalty fees, or other cash disbursements
to foreign firms or investors.

The BOP helps to forecast a countrys market potential, especially in the short run. A
country experiencing a serious trade deficit is not likely to expand imports as it would if
running a surplus. It may, however, welcome investments that increase its exports.

The Various Components Of A BOP Statement

A. Current Account
B. Capital Account
C. Errors & Omissions

3|Page

Current Account
The current account shows the net amount a country is earning if it is in surplus, or spending if it
is in deficit. It is the sum of the balance of trade (net earnings on exports minus payments for
imports), factor income (earnings on foreign investments minus payments made to foreign
investors) and cash transfers. It is called the current account as it covers transactions in the "here
and now" those that don't give rise to future claims.
It can be calculated by a formula:

Where,

CA: current account

X and M: export and import of goods and services respectively

NY: net income from abroad

NCT: net current transfers.

4|Page

BALANCE OF CURRENT ACCOUNT

BOP on current account refers to the inclusion of three balances of namely Merchandise
balance, Services balance and Unilateral Transfer balance. In other words it reflects the net flow
of goods, services and unilateral transfers (gifts). The net value of the balances of visible trade
and of invisible trade and of unilateral transfers defines the balance on current account.
BOP on current account is also referred to as Net Foreign Investment because the sum represents
the contribution of Foreign Trade to GNP.
Thus the BOP on current account includes imports and exports of merchandise (trade balances),
military transactions and service transactions (invisibles). The service account includes
investment income (interests and dividends), tourism, financial charges (banking and insurances)
and transportation expenses (shipping and air travel). Unilateral transfers include pensions,
remittances and other transfers for which no specific services are rendered.
It is also worth remembering that BOP on current account covers all the receipts on account of
earnings (or opposed to borrowings) and all the payments arising out of spending (as opposed to
lending). There is no reverse flow entailed in the BOP on current account transactions.

5|Page

STRUCTURE OF CURRENT ACCOUNT

Transactions

Credit

Debit

Net Balance

1. Merchandise
2. Foreign Travel
3. Transportation
4. Insurance (Premium)

Export
Earning
Earning
Receipt

Import
Payment
Payment
Payment

5. Investment Income

Dividend Receipt

Dividend Payment

6.Government (purchase of Receipt

goods & services)

Payment

Current A/C Balance

Surplus (+)
Deficit (-)

THE CAPITAL ACCOUNT

The capital account records all international transactions that involve a resident of the country
concerned changing either his assets with or his liabilities to a resident of another country.
Transactions in the capital account reflect a change in a stock either assets or liabilities.
It is often useful to make distinctions between various forms of capital account transactions. The
basic distinctions are between private and official transactions, between portfolio and direct
investment and by the term of the investment (i.e. short or long term). The distinction between
private and official transaction is fairly transparent, and need not concern us too much, except for
noting that the bulk of foreign investment is private.
Direct investment is the act of purchasing an asset and the same time acquiring control of it
(other than the ability to re-sell it). The acquisition of a firm resident in one country by a firm
resident in another is an example of such a transaction, as is the transfer of funds from the
parent company in order that the subsidiary company may itself acquire assets in its own
6|Page

country. Such business transactions form the major part of private direct investment in other
countries, multinational corporations being especially important. There are of course some
examples of such transactions by individuals, the most obvious being the purchase of the second
home in another country.
Portfolio investment by contrast is the acquisition of an asset that does not give the purchaser
control. An obvious example is the purchase of shares in a foreign company or of bonds issued
by a foreign government. Loans made to foreign firms or governments come into the same broad
category. Such portfolio investment is often distinguished by the period of the loan (short,
medium or long are conventional distinctions, although in many cases only the short and long
categories are used). The distinction between short term and long term investment is often
confusing, but usually relates to the specification of the asset rather than to the length of time of
which it is held. For example, a firm or individual that holds a bank account with another country
and increases its balance in that account will be engaging in short term investment, even if its
intention is to keep that money in that account for many years. On the other hand, an individual
buying a long term government bond in another country will be making a long term investment,
even if that bond has only one month to go before the maturity. Portfolio investments may also
be identified as either private or official, according to the sector from which they originate.
The purchase of an asset in another country, whether it is direct or portfolio investment, would
appear as a negative item in the capital account for the purchasing firms country, and as a
positive item in the capital account for the other country. That capital outflows appear as a
negative item in a countrys balance of payments, and capital inflows as positive items, often
causes confusions. One way of avoiding this is to consider that direction in which the payment
7|Page

would go (if made directly). The purchase of a foreign asset would then involve the transfer of
money to the foreign country, as would the purchase of an (imported) good, and so must appear
as a negative item in the balance of payments of the purchasers country (and as a positive item
in the accounts of the sellers country).
The net value of the balances of direct and portfolio investment defines the balance on capital
account.
Short term capital movement includes:
Purchase of short term securities
Speculative purchase of foreign currency
Cash balances held by foreigners
Net balance of current account
Long term capital movement includes:
Investments in shares, bonds, physical assets etc.
Amortization of capital
CAPITAL ACCOUNT CONVERTIBILITY (CAC)
While there is no formal definition of Capital Account Convertibility, the committee under the
chairmanship of S.S. Tarapore has recommended a pragmatic working definition of CAC.
Accordingly CAC refers to the freedom to convert local financial assets into foreign financial
assets and vice a versa at market determined rates of exchange. It is associated with changes
8|Page

of ownership in foreign / domestic financial assets and liabilities and embodies the creation and
liquidation of claims on, or by, the rest of the world. CAC is coexistent with restrictions other
than on external payments. It also does not preclude the imposition of monetary / fiscal measures
relating to foreign exchange transactions, which are of prudential nature.
Following are the prerequisites for CAC:
1. Maintenance of domestic economic stability.
2. Adequate foreign exchange reserves.
3. Restrictions on inessential imports as long as the foreign exchange position is not very
comfortable.
4. Comfortable current account position.
5. An appropriate industrial policy and a conducive investment climate.
6. An outward oriented development strategy and sufficient incentives for export growth.

DIFFERENCE BETWEEN CURRENT ACCOUNT AND CAPITAL ACCOUNT

CURRENT ACCOUNT

Indicates
flow
aspect
of
countrys national transactions
Relates to goods , services and
unrequited transfers

9|Page

CAPITAL ACCOUNT

Indicates changes in stock magnitudes

Relates to all transactions constituting
debts and transfer of ownership

STRUCTURE OF BALANCE OF PAYMENTS ACCOUNT

CREDITS

DEBITS

Current A/c:

Current A/c:

Exports of goods(Visible items)

Imports of goods(Visible items)

Exports of services (Invisibles)

Imports of services(Invisibles)

Unrequited receipts(gifts , remittances,

Unrequited

indemnities, etc. from foreigners)

remittance,

Capital

indemnities

gifts,
etc.

to

foreigners)

Capital A/c:

payments(

receipts

(Borrowings

from Capital A/c:

abroad, capital repayments by, or sale

Capital payments (lending to, capital

of assets to foreigners, increase in stock

repayments to, or purchase of assets

of gold and reserves of foreign currency

from foreigners, reduction in stock of

etc.)

gold and reserves of foreign currency

etc.)

ERRORS AND OMISSIONS

Errors and omissions is a statistical residue. It is used to balance the statement because in
practice it is not possible to have complete and accurate data for reported items and because
these cannot, therefore, ordinarily have equal entries for debits and credits. The entry for net
errors and omissions often reflects unreported flows of private capital, although the conclusions
10 | P a g e

that can be drawn from them vary a great deal from country to country, and even in the same
country from time to time, depending on the reliability of the reported information. Developing
countries, in particular, usually experience great difficulty in providing reliable information.
Errors and omissions (or the balancing item) reflect the difficulties involved in recording
accurately, if at all, a wide variety of transactions that occur within a given period of (usually 12
months). In some cases there is such large number of transactions that a sample is taken rather
than recording each transaction, with the inevitable errors that occur when samples are used. In
others problems may arise when one or other of the parts of a transaction takes more than one
year: for example with a large export contract covering several years some payment may be
received by the exporter before any deliveries are made, but the last payment will not made until
the contract has been completed. Dishonesty may also play a part, as when goods are smuggled,
in which case the merchandise side of the transaction is unreported although payment will be
made somehow and will be reflected somewhere in the accounts. Similarly the desire to avoid
taxes may lead to under-reporting of some items in order to reduce tax liabilities.
Finally, there are changes in the reserves of the country whose balance of payments we are
considering, and changes in that part of the reserves of other countries that is held in the country
concerned. Reserves are held in three forms: in foreign currency, usually but always the US
dollar, as gold, and as Special Deposit Receipts (SDRs) borrowed from the IMF. Note that
reserves do not have to be held within the country. Indeed most countries hold a proportion of
their reserves in accounts with foreign central banks.
The changes in the countrys reserves must of course reflect the net value of all the other
recorded items in the balance of payments. These changes will of course be recorded accurately,
11 | P a g e

and it is the discrepancy between the changes in reserves and the net value of the other record
items that allows us to identify the errors and omissions.
Balance Of Payment in India
Indias balance of payment position was quite unfavorable during the time of countrys entry into
liberalized trade regime. Two decades of economic reforms and free trade opened several
opportunities that, of course, reflected in the balance of payments performance of the country.

ADVANTAGES OF BOP
Comparative advantage influences the balance of payments through its effect on the current
account. The balance of payments describes the overall balance of international trade, finance
and capital flows for a country. The current account focuses specifically on trade, meaning
exports and imports. For payments to balance, the current account should equal the financial
account and the capital account. These accounts specifically track monetary investments in
companies and purchases of non-productive and non-financial assets, respectively.
The current account itself balances when the value of exports equals the value of imports. When
exports exceed imports, there is a trade surplus, and when imports exceed exports there is a trade
deficit. Comparative advantage is a key factor in determining the mix of exports and imports for
a country, so it is useful in analyzing the current account and the overall balance of payments.
Comparative advantage is the idea that a country should specialize in activities that present the
lowest opportunity cost. It doesn't matter if a nation has an absolute advantage in every product
category, which would mean that it could produce all of them at a lower price than another
nation. Specializing in the products with the highest returns and trading for the other products
produces greater benefits on the whole.
Comparative advantage can be gained from economies of scale, a skilled labor force or natural
resources. It can be seen often in global trade: the American economy produces a lot of
innovation and services, for example, while the Bangladeshi economy produces a lot of
innovation. These specialties arise from differences in comparative advantage, which in turn
affect the components of the current account.
A country importing more goods and services than it exports, like the United States, runs a trade
deficit, which in turn must be financed through asset sales or borrowing. This affects the overall
balance of payments picture.
12 | P a g e

CHARACTERISTICS OF BOP

There Is Money at the BOP

The dominant assumption is that the poor have no purchasing power and therefore do not
represent a viable market.
Access to BOP Markets
The dominant assumption is that distribution access to the BOP markets is very difficult and
therefore represents a major impediment for the participation of large firms and MNCs.
The BOP Markets Are Brand-Conscious
The dominant assumption is that the poor are not brand-conscious. On the contrary, the poor are
very brand-conscious. They are extremely value-conscious by necessity.
The BOP Market is Connected
Contrary to the popular view, BOP consumers are getting connected and networked. They are
rapidly exploiting the benefits of information networks
BOP Consumers Accept Advanced Technology Readily
Contrary to popular belief, the BOP consumers accept advanced technology readily.

13 | P a g e

TRADE AND BALANCE OF PAYMENT

INDIAS FOREIGN TRADE - US DOLLAR

EXPORT
1
1976-77
1977-78
1978-79
1979-80
1980-81
1981-82
1982-83
1983-84
1984-85
1985-86
1986-87
1987-88
1988-89
1989-90
1990-91
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12

14 | P a g e

Oil
2
20.8
18.3
17.2
23.3
31.5
246.3
1278.0
1535.8
1529.4
527.0
321.8
500.4
348.7
418.4
522.7
414.7
476.2
397.8
416.9
453.7
481.8
352.8
89.4
38.9
1869.7
2119.1
2576.5
3568.4
6989.3
11639.
6
18634.
6
28363.
1
27547.
0
28192.
0
41480.
0
56038.
5

Non-Oil
3
5707.6
6280.3
6943.1
7903.1
8453.2
8457.6
7829.6
7913.6
8348.7
8377.5
9422.9
11588.1
13621.7
16194.1
17622.5
17450.7
18061.0
21840.5
25913.6
31341.2
32987.9
34653.7
33129.3
36783.5
42690.6
41707.6
50142.9
60274.1
76546.6
91450.9
107779.5
134541.1
157748.0
150559.5
209656.2
249925.3

IMPORT
Oil Non-Oil
Total
4
5
6
1574.3
4077.4
5728.4
1806.4
5205.4
6298.6
2038.2
6240.5
6960.3
4034.7
7255.9
7926.4
6654.9
9211.6
8484.7
5786.2
9386.7
8703.9
5816.2
8970.4
9107.6
4673.1 10637.8
9449.4
4549.8
9862.5
9878.1
4078.0
11988.9
8904.5
2199.5 13527.2
9744.7
3118.1 14037.6
12088.5
3009.0 16488.2
13970.4
3767.5 17451.7
16612.5
6028.1 18044.4
18145.2
5324.8 14085.7
17865.4
6100.0 15781.6
18537.2
5753.5 17552.7
22238.3
5927.8 22726.5
26330.5
7525.8 29149.5
31794.9
33469.7 10036.2 29096.2
8164.0 33320.5
35006.4
6398.6 35990.1
33218.7
36822.4 12611.4 37059.3
44560.3 15650.1 34886.4
43826.7 14000.3 37413.0
52719.4 17639.5 43772.6
63842.6 20569.5 57579.6
83535.9 29844.1 81673.3
103090.5 43963.1 105202.6
126414.1 56945.3 128790.0
162904.2 79644.5 171794.7
185295.0 93671.7 210024.6
178751.4 87135.9 201237.0
251136.2 105964.4 263804.7
305963.9 154967.6 334352.0

TRADE BALANCE
Total
7
5651.7
7011.8
8278.7
11290.6
15866.5
15172.9
14786.6
15310.9
14412.3
16066.9
15726.7
17155.7
19497.2
21219.2
24072.5
19410.5
21881.6
23306.2
28654.4
36675.3
39132.4
41484.5
42388.7
49670.7
50536.5
51413.3
61412.1
78149.1
111517.4
149165.7
185735.2
251439.2
303696.3
288372.9
369769.1
489319.5

Oil
8
-1553.5
-1788.1
-2021.0
-4011.4
-6623.4
-5539.9
-4538.2
-3137.3
-3020.4
-3551.0
-1877.7
-2617.7
-2660.3
-3349.1
-5505.4
-4910.1
-5623.8
-5355.7
-5510.9
-7072.0
-9554.4
-7811.2
-6309.2
-12572.5
-13780.4
-11881.2
-15063.0
-17001.1
-22854.8
-32323.5
-38310.7
-51281.4
-66124.8
-58943.9
-64484.4
-98929.0

Non-Oil
Total
9
10
1630.2
76.7
1074.9
-713.2
702.6
-1318.4
647.2
-3364.2
-758.4
-7381.8
-929.1
-6469.0
-1140.8
-5679.0
-2724.2
-5861.5
-1513.8
-4534.2
-3611.4
-7162.4
-4104.3
-5982.0
-2449.5
-5067.2
-2866.5
-5526.8
-1257.6
-4606.7
-421.9
-5927.3
3365.0
-1545.1
2279.4
-3344.4
4287.8
-1067.9
3187.1
-2323.8
2191.7
-4880.4
3891.7
-5662.7
1333.1
-6478.1
-2860.8
-9170.0
-275.8 -12848.3
7804.2
-5976.2
4294.6
-7586.6
6370.3
-8692.7
2694.5 -14306.5
-5126.7 -27981.5
-13751.7 -46075.2
-21010.5 -59321.2
-37253.6 -88535.0
-52276.6
-50677.5 118401.3-54148.5 109621.4-84426.6 118632.9183355.7

2012-13
2013-14
2014-15

60865. 239535.5 300400.7 164040.6 326696.1 490736.7 -103175.5

1 251236.3 314415.7 164770.3 285443.3 450213.7 -101591.0
63179.
4 253491.6 310533.9 138324.7 309223.6 447548.3 -81282.5
57042.
3

EXPORT
Oil
1

IMPORT

Non-Oil

Total

Oil

-87160.6
-34207.0 190336.0-55732.0 135798.0137014.5

TRADE BALANCE

Non-Oil

Total

Oil

Non-Oil

Total

10

1976-77

0.19

51.24

51.43

14.13

36.60

50.74

-13.95

14.64

0.69

1977-78

0.16

53.92

54.08

15.51

44.69

60.20

-15.35

9.23

-6.12

1978-79

0.14

57.12

57.26

16.77

51.34

68.11

-16.63

5.78

-10.85

1979-80

0.19

64.00

64.18

32.67

58.76

91.43

-32.48

5.24

-27.24

1980-81

0.25

66.86

67.11

52.64

72.86

125.49

-52.39

-6.00

-58.38

1981-82

2.21

75.85

78.06

51.89

84.18

136.08

-49.68

-8.33

-58.02

1982-83

12.35

75.68

88.03

56.22

86.71

142.93

-43.87

-11.03

-54.89

1983-84

15.88

81.83

97.71

48.32

110.00

158.32

-32.44

-28.17

-60.61

1984-85

18.18

99.26

117.44

54.09

117.25

171.34

-35.91

-18.00

-53.91

1985-86

6.45

102.50

108.95

49.89

146.68

196.58

-43.45

-44.18

-87.63

1986-87

4.11

120.41

124.52

28.11

172.85

200.96

-23.99

-52.45

-76.44

1987-88

6.49

150.25

156.74

40.43

182.01

222.44

-33.94

-31.76

-65.70

1988-89

5.05

197.27

202.32

43.58

238.78

282.35

-38.53

-41.51

-80.04

1989-90

6.97

269.62

276.58

62.73

290.56

353.28

-55.76

-20.94

-76.70

1990-91

9.38

316.20

325.58

108.16

323.77

431.93

-98.78

-7.57

-106.35

1991-92

10.22

430.20

440.42

131.27

347.24

478.51

-121.05

82.95

-38.09

1992-93

13.79

523.09

536.88

171.42

462.33

633.75

-157.63

60.76

-96.86

1993-94

12.48

685.04

697.51

180.46

550.55

731.01

-167.98

134.49

-33.50

1994-95

13.09

813.65

826.74

186.13

713.58

899.71

-173.04

100.07

-72.97

1995-96

15.18

1048.36

1063.53

251.74

975.05

1226.78

-236.56

73.31

-163.25

1996-97

17.10

1171.07

1188.17

356.29

1032.91

1389.20

-339.18

138.16

-201.03

1997-98

13.11

1287.90

1301.01

303.41

1238.35

1541.76

-290.30

49.55

-240.76

1998-99

3.76

1393.77

1397.53

269.19

1514.13

1783.32

-265.43

-120.36

-385.79

1999-00

1.69

1593.93

1595.61

546.49

1605.88

2152.37

-544.80

-11.95

-556.75

2000-01

85.42

1950.29

2035.71

714.97

1593.76

2308.73

-629.55

356.53

-273.02

2001-02

101.07

1989.11

2090.18

667.70

1784.30

2452.00

-566.63

204.82

-361.82

2002-03

124.69

2426.68

2551.37

853.67

2118.39

2972.06

-728.98

308.29

-420.69

2003-04

163.97

2769.69

2933.67

945.20

2645.88

3591.08

-781.23

123.82

-657.41

2004-05

314.04

3439.35

3753.40

1340.94

3669.71

5010.65

-1026.90

-230.35

-1257.25

2005-06

515.33

4048.85

4564.18

1946.40

4657.69

6604.09

-1431.07

-608.84

-2039.91

15 | P a g e

2006-07

845.20

4872.59

5717.79

2585.72

5819.35

8405.06

-1740.52

-946.75

-2687.27

2007-08

1141.92

5416.72

6558.64

3206.55

6916.57

10123.12

-2064.63

-1499.85

-3564.48

2008-09

1233.98

7173.57

8407.55

4199.68

9544.68

13744.36

-2965.70

-2371.11

-5336.80

2009-10

1328.99

7126.35

8455.34

4116.49

9520.86

13637.36

-2787.50

-2394.52

-5182.02

2010-11

1887.79

9541.43

11429.22

4822.82

12011.85

16834.67

-2935.03

-2470.42

-5405.45

2011-12

2679.15

11980.45

14659.59

7430.75

16023.88

23454.63

-4751.60

-4043.44

-8795.04

2012-13

3308.19

13035.00

16343.18

8918.71

17772.91

26691.62

-5610.52

-4737.92

-10348.44

2013-14

3832.48

15217.63

19050.11

9978.85

17175.48

27154.34

-6146.38

-1957.85

-8104.23

2014-15

3476.08

15494.18

18970.26

8428.70

18911.79

27340.49

-4952.62

-3417.62

-8370.23

EXPORTS OF PRINCIPLE COMMODITIES- US DOLLAR (BN)

2009-10
2

2010-11
3

2011-12
4

2012-13
5

2013-14
6

2014-15
7

1. Tea

620.4

736.2

851.1

867.3

805.5

682.2

2. Coffee

428.3

660.6

946.2

865.9

793.2

813.4

2372.3

2542.9

5030.7

6222.8

7782.7

7855.0

4. Other cereals

626.7

800.8

1146.2

1503.5

1186.4

860.6

5. Tobacco

915.7

874.7

836.0

924.5

1013.9

959.8

6. Spices

1253.9

1730.9

2734.1

2789.3

2503.5

2428.3

7. Cashew

590.5

618.8

916.1

747.5

842.2

910.3

8. Oil Meals

1650.8

2429.5

2461.6

3036.1

2821.4

1329.5

9. Oil seeds

650.0

1019.2

1712.5

1369.4

1294.2

1739.8

1514.6

1445.0

1728.0

1796.3

2256.3

2154.8

446.6

582.4

805.0

917.5

1151.9

1257.4

12. Marine Products

2086.7

2615.6

3460.7

3462.8

5062.2

5509.7

13. Meat, dairy & poultry products

1570.1

2295.7

3160.7

3802.3

5316.5

5391.8

14. Iron Ore

5978.9

4872.1

4622.1

1651.3

1567.0

525.2

15. Mica, Coal & Other Ores, Minerals including processed minerals

2497.2

3707.9

3661.8

3809.2

4013.2

3901.6

16. Leather & leather products

3277.8

3822.8

4686.1

4777.8

5590.2

6025.7

706.0

865.1

1050.7

1156.3

1294.4

1643.9

28639.1

42314.3

46314.1

43045.1

41379.4

41248.4

19. Drugs & Pharmaceuticals

8880.7

10460.8

13150.5

14425.4

14944.2

15430.9

20. Organic & Inorganic Chemicals

6264.9

8212.4

11396.4

11477.3

12309.9

12472.1

33618.9

50278.9

59923.3

59165.5

64078.5

73114.6

Commodity / Year
1

3. Rice

10. Fruits & Vegetables

11. Cereal preparations & miscellaneous processed items

17. Ceramic products & glassware

18. Gems & Jewellery

21. Engineering Goods

16 | P a g e

22. Electronic Goods

5614.2

8445.7

9078.8

8258.5

7860.6

6258.0

23. Cotton Yarn/Fabs./made-ups, Handloom Products etc.

5317.4

7609.8

8987.9

9657.0

11090.4

10779.6

24. Man-made Yarn/Fabs./made-ups etc.

3602.7

4274.9

5069.5

4535.7

5189.1

5275.2

10717.2

11614.8

13710.7

12948.9

14994.2

16836.3

26. Jute Mfg. including Floor Covering

217.8

459.2

464.5

390.4

382.7

347.2

27. Carpet

756.0

1032.4

920.3

1093.1

1178.1

1360.4

28. Handicrafts excl. hand made carpet

713.0

760.1

993.4

988.3

1509.0

1378.1

29. Petroleum Products

28192.0

41480.0

56038.5

60865.1

63179.4

57042.3

30. Plastic & Linoleum

3001.1

4266.1

5674.5

5599.2

6160.3

5738.3

31. Other Commodities

16029.9

28306.8

34431.9

28251.2

24865.4

19263.5

178751.4

251136.2

305963.9

300400.7

314415.7

310533.9

25. RMG of all Textiles

Total Exports

IMPORTS OF PRINCIPLE COMMODITES- US DOLLAR (BN)

2009-10
2

2010-11
3

2011-12
4

2012-13
5

2013-14
6

2014-15
7

261.7

136.6

221.0

453.4

392.7

507.1

2. Vegetable Oil

4703.9

5688.8

8119.1

9844.1

7278.8

10613.3

3. Pulses

Commodity / Year
1
1. Cotton Raw & Waste

2240.4

1648.8

1971.6

2452.6

1824.2

2790.6

4. Fruits & vegetables

657.8

877.1

1054.5

1244.8

1378.9

1664.9

5. Pulp and Waste paper

464.9

621.3

720.3

745.6

768.2

945.1

6. Textile yarn Fabric, made-up articles

838.1

1100.4

1430.5

1441.5

1507.6

1691.0

7. Fertilisers, Crude & manufactured

6693.2

6920.8

11124.3

8770.9

6306.8

7408.0

8. Sulphur & Unroasted Iron Pyrts

143.7

241.3

476.9

319.6

182.6

286.2

9. Metaliferrous ores & other minerals

5432.3

6472.8

8112.7

9143.7

8395.2

9302.4

10. Coal, Coke & Briquettes, etc.

8960.4

9804.1

17443.9

17007.7

16384.8

17811.6

11. Petroleum, Crude & products

87135.9

105964.4

154967.6

164040.6

164770.3

138324.7

3214.2

3708.2

5024.3

5083.1

5120.7

5464.8

12. Wood & Wood products

13. Leather & leather products

460.8

636.8

719.5

739.9

823.7

1005.6

14. Organic & Inorganic Chemicals

10395.5

13464.1

16717.5

16787.0

17464.5

18561.0

15. Dyeing/tanning/colouring mtrls.

1210.4

1599.0

2108.8

2171.0

2419.0

2443.7

16. Artificial resins, plastic materials, etc.

5785.0

7855.3

8834.9

9989.6

10456.0

12057.0

17. Chemical material & products

2982.7

3823.5

4549.4

4861.5

4877.9

5303.1

18. Newsprint

473.1

821.0

1030.4

804.0

891.8

838.8

19. Pearls, precious & Semi-precious stones

15925.9

33829.7

28039.6

22637.1

23849.3

22564.6

20. Iron & Steel

11573.4

14598.8

18254.7

17700.8

12658.6

16314.5

4498.7

6539.3

8407.2

9038.1

8856.8

10748.2

21. Non-ferrous metals

17 | P a g e

22. Machine tools

2157.7

2962.6

3977.2

3720.7

3057.5

3138.2

23. Machinery, electrical & non-electrical

21321.3

26128.8

33099.2

30764.5

27091.4

28004.7

24. Transport equipment

14388.9

14900.7

18724.7

21288.9

19323.9

18402.7

25. Project goods

4682.7

6144.4

8810.2

6553.7

4535.8

3632.8

26. Professional instrument, Optical goods, etc.

2245.1

2777.8

3593.6

3756.1

3597.5

3716.8

22228.1

27939.1

34081.1

32906.2

32378.4

36872.0

3591.6

4202.7

5184.0

5465.2

5233.1

5431.3

28641.2

40546.9

56319.8

53694.8

28704.7

34407.2

27. Electronic goods

28. Medcnl. & Pharmaceutical products
29. Gold
30. Silver
31. Other Commodities
Total Imports

961.9

1965.0

5155.0

1984.5

4458.3

4528.1

14102.6

15849.4

21046.3

25325.8

25224.8

22768.8

288372.9

369769.1

489319.5

490736.7

450213.6

447548.3

203
TABLE 132 : EXPORTS OF SELECT COMMODITIES TO PRINCIPAL
COUNTRIES - US DOLLAR
(US $ million)
Commodity/Country
1

2013-14
2

2014-15
3

Tea
Germany

43.5

35.2

Iran
Iraq
Japan
Kazakhstan
Poland
Russia

100.6
0.2
25.6
50.4
12.0
108.8

88.5
0.2
24.4
54.1
10.7
96.6

U.A.E.
U.K.
U.S.A
Others

81.4
59.6
71.5
251.9

44.2
57.2
67.3
203.8

Total

805.5

682.2

Belgium
Germany
Italy
Latvia
Netherlands
Russia
Spain
Switzerland
U.K.
U.S.A
Others

51.9
80.1
182.4
5.3
4.7
37.0
13.2
6.4
7.3
29.1
375.8

41.6
79.5
160.8
6.2
5.6
57.7
13.6
8.2
10.0
25.0
405.2

Total

793.2

813.4

257.0

439.8

21.5
267.9
1196.9
75.3
176.1
313.2
144.1
166.2
222.4
4942.1

18.6
271.0
1293.7
98.4
145.4
441.1
157.5
155.1
244.0
4590.4

Coffee

Rice
Bangladesh
France
Kuwait
Saudi Arabia
Singapore
South Africa
U.A.E.
U.K.
U.S.A
Yemen Republic
Others

18 | P a g e

Total

7782.7

7855.0

209.0
35.7
37.2
41.9
45.8
20.3
82.9
15.1
30.9
12.2
482.9

153.9
18.4
33.9
37.3
58.4
29.2
78.9
11.7
25.3
16.4
496.4

1013.9

959.8

59.1
80.3
41.8

55.7
74.3
47.6

Saudi Arabia
Singapore
Spain
Sri Lanka
U.A.E.
U.K.
U.S.A
Others

78.2
70.2
37.6
54.6
87.6
104.0
391.8
1498.3

86.1
46.2
40.8
67.6
122.7
101.0
409.6
1376.7

Total

2503.5

2428.3

Tobacco
Belgium
Germany
Netherlands
Russia
Saudi Arabia
Singapore
U.A.E.
U.K.
U.S.A
Yemen Republic
Others
Total

Spices
Bangladesh
Germany
Japan

INDIA'S OVERALL BALANCE OF PAYMENTS - RUPEES

Item/Year

2012-13

2013-14

2014-15

Credit

Debit

Net

Credit

Debit

Net

Credit

Debit

Net

11

12

13

14

15

16

17

18

19

1. Merchandise

16676.90 27321.46

-10644.56

2. Invisibles (a+b+c)

12188.93

6340.47

5848.46

14117.73

7146.79

6970.95

14500.96

7387.35

7113.61

a) Services

7924.88

4392.71

3532.17

9171.80

4749.23

4422.57

9508.40

4876.68

4631.72

i) Travel

978.81

643.33

335.48

1088.07

714.26

373.81

1245.42

935.41

310.01

ii)Transportation

943.00

806.05

136.95

1052.61

894.80

157.81

1067.98

989.25

78.73

iii) Insurance

121.19

76.62

44.56

128.49

67.60

60.89

134.53

68.35

66.18

31.26

44.22

-12.96

29.47

58.88

-29.41

33.21

58.71

-25.50

5850.62

2822.48

3028.14

6873.15

3013.69

3859.47

7027.26

2824.96

4202.30

3583.48

128.56

3454.91

4206.20

151.75

4054.45

4472.82

165.82

4307.00

Business services

1547.80

1650.36

-102.57

1722.50

1645.70

76.80

1737.93

1691.90

46.02

Financial services

269.41

252.01

17.40

401.58

346.04

55.54

345.83

217.72

128.11

1
A. Current account

iv) G.n.i.e.
v) Miscellaneous
of which: Software services

Communication services
b) Transfers

19310.74 28159.18

-8848.45

19350.64 28164.75

-8814.11

91.77

40.30

51.48

145.61

63.35

82.26

122.24

62.36

59.88

3704.64

220.71

3483.93

4257.16

309.92

3947.25

4289.37

281.88

4007.48

i) Official

25.10

41.98

-16.88

46.72

58.65

-11.93

19.70

64.50

-44.80

ii) Private

3679.54

178.73

3500.81

4210.44

251.26

3959.18

4269.67

217.39

4052.28

c) Income

559.41

1727.05

-1167.64

688.77

2087.64

-1398.87

703.19

2228.78

-1525.59

i) Investment income

392.13

1609.57

-1217.44

489.33

1917.68

-1428.35

485.50

2061.53

-1576.03

ii) Compensation of employees

167.29

117.48

49.80

199.44

169.96

29.48

217.69

167.25

50.44

28865.83 33661.93

-4796.10

33428.47 35305.97

-1877.50

33851.60 35552.10

-1700.49

14906.78 13310.29

1596.50

18731.00 14235.27

4495.72

Total Current account (1+2)

B. Capital account
1. Foreign investment (a+b)

11698.22

9151.69

2546.53

2167.37

1085.51

1081.86

2638.94

1339.25

1299.69

3118.71

1122.43

1996.28

i) In India

1868.69

399.15

1469.54

2185.95

317.65

1868.30

2711.83

605.06

2106.76

Equity

1247.73

372.48

875.25

1533.23

287.49

1245.74

1951.65

589.63

1362.02

537.37

0.00

537.37

544.24

0.00

544.24

549.93

0.00

549.93

a) Foreign direct investment (i+ii)

Reinvested earnings

19 | P a g e

Other capital
ii) Abroad
Equity

83.58

26.67

56.91

108.48

30.16

78.32

210.25

15.44

194.81

298.68

686.37

-387.68

452.99

1021.59

-568.60

406.88

517.36

-110.48
156.87

298.68

386.14

-87.46

452.99

761.60

-308.61

406.88

250.00

Reinvested earnings

0.00

64.71

-64.71

0.00

70.70

-70.70

0.00

66.76

-66.76

Other capital

0.00

235.51

-235.51

0.00

189.30

-189.30

0.00

200.60

-200.60

b) Portfolio investment

9530.85

8066.18

1464.67

12267.84 11971.04

296.80

15612.29 13112.85

2499.45

i) In India
of which: FIIs

9450.11

7937.60

1512.51

12218.16 11907.13

311.03

15568.57 13070.04

2498.53

9439.89

7937.60

1502.28

12217.04 11907.13

309.91

15568.57 13070.04

2498.53

10.23

0.00

10.23

1.12

0.00

1.12

0.00

0.00

80.74

128.58

-47.84

49.68

63.91

-14.23

43.72

42.81

0.91

8433.53

6742.79

1690.73

8134.42

7675.41

459.01

7573.73

7361.44

212.29
100.43

GDRs/ADRs
ii) Abroad
2. Loans (a+b+c)
a) External assistance

0.00

257.47

204.21

53.26

282.39

220.43

61.97

354.16

253.73

i) By India

2.82

18.38

-15.56

2.74

14.78

-12.03

3.76

29.56

-25.80

ii) To India

254.65

185.83

68.82

279.65

205.65

74.00

350.40

224.17

126.23

b) Commercial borrowings

1501.58

1041.06

460.52

1827.60

1103.44

724.16

1735.84

1568.93

166.90

ii) By India

115.13

120.68

-5.54

98.51

35.64

62.88

98.42

16.53

81.90

ii) To India

1386.45

920.38

466.07

1729.08

1067.80

661.28

1637.41

1552.41

85.00

6674.47

5497.52

1176.95

6024.42

6351.55

-327.12

5483.74

5538.78

-55.04

6485.03

5405.49

1079.54

6008.49

6270.93

-262.45

5356.89

5500.81

-143.92

189.44

92.03

97.41

15.94

80.61

-64.67

126.85

37.97

88.89

3. Banking capital (a+b)

4554.07

3651.40

902.68

6544.82

5028.18

1516.64

5509.76

4788.93

720.83

a) Commercial banks

4518.66

3642.09

876.56

6514.91

5028.18

1486.73

5402.46

4788.93

613.53

654.22

726.04

-71.82

865.60

1314.23

-448.64

1034.41

1128.95

-94.54

3864.44

2916.05

948.39

5649.31

3713.94

1935.37

4368.05

3659.98

708.07

3551.92

2745.41

806.51

5331.98

2951.99

2380.00

3868.67

3007.43

861.25

35.42

9.30

26.11

29.90

0.00

29.90

107.30

0.00

107.30

0.00

3.13

-3.13

0.00

3.04

-3.04

0.00

4.89

-4.89

970.73

1250.20

-279.46

1338.01

2009.03

-671.02

1703.75

1609.76

93.99

25656.56 20799.22

4857.34

30924.03 28025.95

2898.08

33518.24 28000.29

5517.94

c) Short term to India

i) Suppliers' Credit >180 days & Buyers' Credit
ii) Suppliers' credit up to 180 days

i) Assets
ii) Liabilities
of which: Non-resident deposits
b) Others
4. Rupee debt service
5. Other capital
Total capital account (1 to 5)
C. Errors & omissions
D. Overall balance (A+B+C)
E. Monetary movements (i+ii)

145.78

0.00

145.78

54668.17 54461.15

207.02

49.63

109.67

-60.04

64402.13 63441.59

960.54

90.68

128.88

-38.20

67460.52 63681.28

3779.25

0.00

207.02

-207.02

0.00

960.54

-960.54

0.00

3779.25

i) I.M.F.

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

ii) Foreign exchange reserves (Increase- / Decrease+)

0.00

207.02

-207.02

0.00

960.54

-960.54

0.00

3779.25

-3779.25

References/Bibliography:

en.wikipedia.org/wiki/Balance_of_payments/

www.investopedia.com/articles/03/060403.asp

www.economicshelp.org/blog/glossary/balance-payments/

Economic Survey (2013-14), http://indiabudget.nic.in

Reserve Bank of India, www.rbi.org

Search Engine:- Google.com

20 | P a g e

-3779.25