STUDY ON

INDIA’S EXPORTS AND IMPORS

LINGAYAS LALITA DEVI INSTITUTE OF MANAGEMENT AND SCIENCES

Submitted in partial of the requirements for the award of the degree of

Bachelor of commerce (Hons)

BY

PRATIYUSH RANA

70519288823

Submitted to:

MS. PRIYANKA

MAVI

JUNE, YEAR-2024
 DECLARATION

I hereby declare that this summer training report, titled,"India's export and imports “ is a record
of an original work done by me under the guidance of PRIYANKA MAVI, Faculty Member,
LINGAYA'S Lalita Devi institute of management and sciences and this project work has not
performed the basis for the award of any Degree to my best knowledge.

Place: New Delhi

Candidate’s signature

Name: Pratiyush Rana

Enroll no:70519288823

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 CERTIFICATE
TO Whom it may concern

This is to certify that this MINOR PROJECT “ Study on INDIA’S EXPORTS AND IMPORTS’’ is
submitted by “PRATIYUSH RANA” who carried out the project work under my supervision I
approve this project for submission of the Bachelors of Commerce (Hons.) in the department
affiliated to Guru Gobind Singh Indraprastha University, Delhi.

DATE: Ms. Priyanka Mavi

Assistant Professor
LLDIMS

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 ACKNOWLEDGEMENT

An independent project is a contradiction in terms. Every project involves contribution of many

people. This project also bears the imprints of many people and it is a pleasure for me to
acknowledge and thank all of them. I am deeply indebted to PRIYANKA MAVI who acted as a
mentor and guide, providing knowledge and giving me her valuable time out of her busy
schedule, at every step throughout the project. It is only because of her this project came
into being.
I also take the opportunity to express my sincere gratitude to each and every person,
who directly or indirectly helped me throughout the project and without anyone of the
project would not have been possible.
The immense learning from this project would be indelible forever.

Thanking you

Student Name : Pratiyush Rana

Enrollment no.: 70519288823

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 TABLE OF CONTENTS

S.NO Page no.

1 Declaration
2 Certificate
3 Acknowledgement
4 Chapter 1: Introduction
5 Chapter 2: Literature review
6 Chapter 3: Research methodology
7 Chapter 4: Data analysis
8

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CHAPTER 1 - INTRODUCTION

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1
Introduction
India, one of the world's largest and fastest-growing economies, plays a significant
role in the global trade landscape. With a rich cultural heritage, diverse geography,
and a burgeoning population, India's export and import activities are critical not
only for its own economic growth but also for shaping global trade dynamics. In
this comprehensive overview, we delve into the intricate details of India's export
and import landscape, exploring the key sectors, trends, challenges, and
opportunities that define its trade relations with the world. The country's trade is
influenced by factors like global demand, government policies, and international
relations. India aims to balance its trade deficit by promoting exports and
encouraging domestic manufacturing. India's economic landscape is a
tapestry woven with threads of vibrant trade, both within its
borders and across the seas. At the heart of this economic
dynamism lie India's export and import activities, which serve as
critical pillars supporting the nation's growth and development on
the global stage. In this introductory exploration, we delve into
the intricacies of India's trade ecosystem, examining the diverse
array of goods flowing into and out of the country, and
uncovering the forces that shape its trade relations with the
world. India's position in the global economy as a vibrant hub of
trade is a testament to its rich history, diverse culture, and
rapidly evolving economic landscape. In this exploration of India's
export and import activities, we delve deep into the intricate web
of commerce that defines the nation's engagement with the
world. From ancient trade routes to modern-day logistics
networks, India's journey in international trade is a compelling
narrative of resilience, innovation, and transformation.

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Historical context:-

India's engagement in international trade dates back centuries, with ancient

Key Export
maritime Sectors:
routes connecting the Indian subcontinent to distant lands for the
exchange
India boastsofagoods and
diverse ideas.
range ofOver thesectors,
export years, trade
each has been influenced
contributing by to
significantly
colonialism,
its industrialization,
economic prosperity and globalization,
and global shaping
competitiveness. AmongIndia's export and
the leading export
import patterns. Post-independence, India adopted protectionist policies aimed at
sectors are:
fostering domestic industries, leading to a reliance on import substitution
strategies.
However, economic reforms initiated in the early 1990s ushered in an era of
Information Technology
1.liberalization, privatization, (IT)and
and Software Services:
globalization, India has
transforming emerged
India as a
into a more
global
open andIT hub, renowned
competitive for its software
economy. development,
To understand IT outsourcing,
the contemporary dynamics ofand
India's
export andprocess
business import, it's imperative to
outsourcing delveservices.
(BPO) into its historical roots aslike
Companies a trading
Tata nation. Millennia
ago, the Indian subcontinent was a crucible of commerce, attracting merchants from distant
Consultancy Services
lands seeking spices, (TCS),and
textiles, Infosys, and Wipro
other coveted goods.have established
The ancient seaportsaof
strong
the
presence
subcontinentin buzzed with activity, connecting India to the far reaches of Asia, Africa, and
Europe. Over the
international centuries,driving
markets, successive waves
India's of traders,
export invaders,
earnings in theandITcolonial
sector.powers left an

2. Pharmaceuticals: India is a major producer and exporter of generic

drugs, supplying affordable medicines to markets worldwide. The
pharmaceutical
industry has flourished due to India's robust manufacturing capabilities, cost-
effective production processes, and adherence to international quality standards.

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3. Textiles and Garments: With a rich tradition of textile production, India is a
leading exporter of textiles, garments, and yarn. The sector encompasses a wide
range of products, including cotton textiles, silk fabrics, woolens, and
readymade garments, catering to diverse consumer preferences in global
markets.

4. Agricultural Products: India's agricultural sector contributes significantly to its

export earnings, with products such as rice, spices, tea, coffee, and fruits
finding markets across the globe. The country's diverse agro-climatic conditions
and traditional farming practices support the cultivation of a wide variety of
crops, making India a key player in global agri-trade.

5. Automobiles and Auto Components: India's automotive industry has

witnessed rapid growth, fueled by domestic demand and export-oriented
manufacturing.
Leading automobile manufacturers like Maruti Suzuki, Tata Motors, and
Mahindra & Mahindra produce a range of vehicles and auto components for
both domestic and international markets.

Key export categories

India's key export categories span a wide range of sectors, reflecting the country's
diverse economic landscape and global competitiveness. Here are some of the
key export categories of India:

1. Information Technology (IT) and Software Services: India is renowned for its
IT and software services, including software development, IT consulting, and
business process outsourcing (BPO). Leading IT firms such as Tata Consultancy
Services (TCS), Infosys, and Wipro export software solutions and services to clients
worldwide.

2. Pharmaceuticals: India is a major producer and exporter of generic

drugs, supplying affordable medicines to markets across the globe. The
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country's

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pharmaceutical industry manufactures a wide range of pharmaceutical products,
including formulations, active pharmaceutical ingredients (APIs), and vaccines.

3. Textiles and Garments: India has a strong textile and garment industry,
exporting a variety of textiles, including cotton textiles, silk fabrics, woolens, and
readymade garments. The country's textile exports cater to diverse consumer
preferences in
international markets.

4. Automotive Components: India's automotive component industry exports

a wide range of components and parts for automobiles, including engine
parts, transmission parts, electrical components, and body parts. Indian auto
component manufacturers are known for their quality, competitiveness, and
innovation.

5. Chemicals and Petrochemicals: India's chemical and petrochemical industry

exports a variety of chemicals, including specialty chemicals, organic and
inorganic chemicals, and petrochemical products. The sector serves various
industries,
including pharmaceuticals, textiles, agriculture, and manufacturing.

6. Gems and Jewelry: India is a leading exporter of gems and jewelry,

including gold jewelry, diamond jewelry, gemstones, and silverware. The
country's rich
heritage and skilled craftsmanship make it a prominent player in the global gems
and jewelry market.

7. Agricultural Products: India exports a range of agricultural products, including

rice, wheat, spices, tea, coffee, fruits, and vegetables. The country's diverse
agro- climatic conditions and traditional farming practices support the
production of a wide variety of agricultural commodities.
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8. Engineering Goods: India's engineering goods sector exports machinery,
equipment, and industrial products such as electrical machinery, mechanical
appliances, iron and steel products, and precision instruments. Indian engineering
goods are known for their quality, reliability, and cost-effectiveness.

9. Petroleum Products: India exports petroleum products such as refined

petroleum, petroleum oils, and bituminous substances. The country's refining
capacity and strategic location make it a significant exporter of petroleum
products to global markets.

10. Leather and Leather Products: India exports leather goods such as footwear,
leather garments, leather bags, and accessories. The country's skilled
workforce
and abundant raw materials contribute to its competitiveness in the global leather
market.

These key export categories highlight India's strengths in various sectors and its
ability to compete in global markets. Continued focus on innovation, quality
enhancement, and market diversification can further bolster India's export
competitiveness and contribute to sustainable economic growth.

Key Import Categories :

India's import basket is equally diverse, encompassing a wide range of goods
and commodities to meet domestic demand and support industrial production.
Some of the key import categories include:

1. Crude Oil and Petroleum Products: India is heavily dependent on imports to

meet its energy requirements, with crude oil and petroleum products
constituting a significant share of total imports. The country relies on imports
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from oil-

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producing nations such as Saudi Arabia, Iraq, and the United Arab Emirates to
meet its energy needs.

2. Electronics and Electrical Goods: India's booming consumer electronics

market drives demand for imported electronic goods such as smartphones,
laptops,
televisions, and household appliances. Despite efforts to promote domestic
manufacturing under initiatives like Make in India, India remains a net importer of
electronic products.

3. Machinery and Industrial Equipment: India imports a variety of machinery

and industrial equipment to support its manufacturing sector and
infrastructure
development projects. Imports include machinery for sectors such as
construction, mining, manufacturing, and agriculture, sourced from countries like
China, Germany, and Japan.

4. Precious Metals and Stones: India has a long-standing tradition of gold and
diamond jewelry consumption, making precious metals and stones a significant
category of imports. Gold imports are driven by cultural preferences, investment
demand, and festive occasions.

5. Chemicals and Fertilizers: India relies on imports for a wide range of

chemicals, fertilizers, and pharmaceutical raw materials to support its industrial
and
agricultural sectors. Imports play a crucial role in meeting the demand for
specialty chemicals, intermediates, and agrochemicals required for various
industrial processes.

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CHAPTER- 2 LITERATURE REVIEW

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2
Literature review
India's export and import dynamics have been the subject of
extensive research and analysis, reflecting the country's growing
significance in the global economy. Scholars, economists, and
policymakers have explored various facets of India's trade
relationships, shedding light on the drivers, challenges, and
implications of its export and import activities. This literature
review provides an overview of key themes, findings, and
debates in the field of research on India's exports and imports.
This literature review provides an in-depth exploration of key
themes, findings, and debates surrounding India's trade
relationships, shedding light on the drivers, challenges, and
implications of its export and import activities.
Historical Context and Trade Policy
Evolution:

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India's engagement with international trade dates back millennia,
shaped by its geographical location, cultural heritage, and
historical interactions with global civilizations. During the colonial
era, India was subjugated to a trade regime that primarily served
the interests of the British Empire, leading to the exploitation of
its resources and markets. Following independence in 1947, India
pursued a policy of import substitution industrialization (ISI),
aimed at reducing dependence on foreign imports and fostering
domestic industries. However, by the late 20th century, mounting
fiscal deficits, balance of payments crises, and sluggish economic
growth prompted a shift towards liberalization and globalization.
The landmark economic reforms of the early 1990s dismantled
trade barriers, opened up the economy to foreign investment,
and catalyzed India's integration into the global economy.

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 Export-Led Growth
A central theme in the literature on India's trade dynamics is the
export-led growth hypothesis, which posits that expanding
exports can stimulate economic growth, job creation, and
technological progress. Early proponents of this theory, such as
Bhagwati and Desai (1970) and Balassa (1978), argued that by
specializing in industries with comparative advantage and gaining
access to larger markets, countries like India could achieve
sustainable development. Empirical studies by Mitra and Joshi
(1999) and Chandrasekhar and Ghosh (2002) provided evidence
supporting this hypothesis, demonstrating a positive correlation
between export growth and GDP expansion in India. However,
critics have raised concerns about the unequal distribution of
gains from trade liberalization, potential adverse effects on
income distribution, and the need for complementary policies to
address structural constraints. A significant body of literature has
examined the role of exports in driving economic growth and
development in India. Scholars such as Bhagwati and Desai
(1970) and Balassa (1978) have espoused the export-led growth
hypothesis, arguing that expanding export markets can stimulate
domestic investment, technological innovation, and productivity
gains, thereby fostering long-term economic development.
Empirical studies by Mitra and Joshi (1999) and Chandrasekhar
and Ghosh (2002) have provided evidence supporting this
hypothesis, highlighting the positive correlation between export
growth and GDP expansion in India.

Trade
The Policy
impact and Structural
of trade liberalization and globalization on India's
export and import dynamics has been a subject of considerable
debate. Researchers such as Panagariya (2008) and Goldar
(2011) have analyzed the effects of trade reforms initiated in the
early 1990s, arguing that liberalization policies have contributed
to diversification of India's export basket, increased
competitiveness of domestic industries, and integration into
global value chains. However, critics such as Rodrik (2004) and
Nayyar (2008) have raised concerns about the unequal
distribution of gains from trade liberalization,

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potential adverse effects on employment and income
distribution, and the need for complementary policies to address
structural constraints. India's persistent trade imbalances,
particularly in merchandise trade, have been a subject of concern
for policymakers and researchers alike. Studies by Mohan and
Rajan (2019) and Subramanian and Kessler (2014) have
examined the factors contributing to India's trade deficits,
including the dependence on oil imports, sluggish export growth
in certain sectors, and currency exchange rate dynamics. Policy
recommendations have ranged from promoting export
diversification and enhancing competitiveness to addressing
structural bottlenecks in infrastructure, logistics, and regulatory
frameworks, as proposed by Aggarwal and Chadha (2017) and
Prasad and Reddy (2020).

Sectoral Analysis and Comparative Advantage:

Scholars have conducted sectoral analyses to identify India's

comparative advantage in international trade and assess the
competitiveness of its export industries. Studies by Kapoor and
Ramachandran (2009) and Mukim and Sharma (2013) have
highlighted the importance of sectors such as information
technology, pharmaceuticals, textiles, and automotive
components in India's export portfolio, emphasizing factors such
as skilled labor, technological capabilities, and market access.
However, challenges such as infrastructure deficiencies,
regulatory barriers, and supply chain inefficiencies continue to
hamper the competitiveness of certain sectors, as noted by Das
and Narayanan (2018) and Chakraborty and Gopinath (2020).

Geopolitical Considerations and Regional Trade Dynamics:

The geopolitical dimensions of India's trade relationships,

including its engagement with neighboring countries and regional
trading blocs, have received attention from scholars and
analysts. Research by Pant and Kumar (2016) and Rai (2018) has
explored the strategic implications of India's trade agreements,
geopolitical rivalries, and efforts to balance economic interests
with political considerations. The evolving dynamics of regional
trade partnerships, such as the ASEAN-India Free Trade Area and
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the

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 Regional Comprehensive Economic Partnership (RCEP), have
raised questions about India's strategic positioning and long-
term economic integration in the Asia-Pacific region, as
discussed by Mukherjee and Mukherjee (2021) and Roy
(2020).
Future Directions and Emerging Research
Agendas:

Looking ahead, the literature on India's exports and imports is

likely to continue evolving in response to changing economic,
political, and environmental dynamics. Emerging research
agendas may focus on topics such as digital trade, e-commerce,
services exports, and the impact of technological innovations on
trade patterns. Additionally, there is a growing interest in
exploring the implications of geopolitical shifts, such as the rise of
China, the recalibration of global supply chains, and the
resurgence of protectionist sentiments, on India's trade
relationships and strategic interests.

Trade and Sustainable

Development:

In recent years, there has been growing recognition of the

importance of integrating trade policies with sustainable
development goals, including environmental protection, social
inclusion, and poverty reduction. Scholars such as Bhagwati and
Mavroidis (2007) and Ghosh and Ganguly (2015) have examined
the nexus between trade liberalization, economic growth, and
environmental sustainability in the Indian context. The role of
trade in promoting inclusive growth and addressing socio-
economic disparities has also been explored by researchers such
as Basu and Chakraborty (2016) and Sen and De (2019),
highlighting the need for policies that ensure equitable
distribution of benefits and opportunities.

Objectives of export and import:

1. Analyzing Trade To examine the recent trends in India's

Trends: exports
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and imports over the past few years, including identifying growth
patterns, fluctuations, and sectoral shifts in trade flows.

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2. Identifying Key To understand the factors driving
changes in India's export and import performance, including
macroeconomic conditions, global trade dynamics, policy
reforms, and sector-specific developments.

3. Assessing Sectoral To analyze the sectoral

composition of India's exports and imports, evaluating the
country's comparative advantage in different industries and
identifying sectors driving trade growth.

4. Evaluating Policy To assess the impact of trade policies,

tariffs, non-tariff barriers, and international trade agreements on
India's export and import performance, highlighting policy
interventions that have influenced trade outcomes.

5. Offering To provide insights and

recommendations for policymakers, businesses, and
stakeholders on strategies to enhance India's trade
competitiveness, promote export diversification, address trade
imbalances, and navigate global trade challenges effectively.

Importance of Literature
Review:

A literature review on India's export and import dynamics holds

significant importance for several reasons:

1. Understanding Historical Context: Examining past research

provides insights into the historical evolution of India's trade
relationships, including colonial legacies, policy shifts, and
economic reforms, which helps contextualize current trade
dynamics.
2. Identifying Trends and Patterns: A literature review enables the identifi

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3. Analyzing Policy Implications: By synthesizing existing
literature, researchers can assess the impact of trade policies,
regulatory reforms, and international agreements on India's
export and import performance, informing policy discourse and
decision-making processes.

4. Evaluating Economic Impacts: Studying the economic

implications of India's trade dynamics, including their effects
on GDP growth, employment, income distribution, and
sectoral development, helps policymakers and stakeholders
understand the broader socio-economic consequences of
trade policies.

5. Assessing Competitiveness: A literature review facilitates

the evaluation of India's trade competitiveness, comparative
advantage, and market positioning in relation to other
countries and regions, providing insights into strategic
opportunities and challenges.

6. Informing Strategic Decision-Making: By synthesizing

insights from diverse sources, a literature review provides a
knowledge base for policymakers, businesses, and
stakeholders to make informed decisions about trade
strategies, investment priorities, and policy reforms.

7. Identifying Research Through a critical analysis of existing

literature, researchers can identify gaps, limitations, and areas
for further investigation, guiding future research agendas and
contributing to the advancement of knowledge in the field of
trade.
8. If you walk into a supermarket and you find yourself with a
packet of Lays, or even our favourite Cadbury chocolate, or a
can of Coca-Cola, you have experienced international trade.
International trade allows you to get goods and services that
you might not get domestically. As
quoted by Wasserman and Haltman, “Trade can be connoted
as transactions among the citizens of different nations. Global
economic activities are aided by International trade and are a
catalyst of economic growth for various developed countries
and also for the developing nations. Differences in various
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conditions, like resource availability, natural climatic
conditions, cost of production, etc., act as the motive

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 behind trade between the countries. International trade has
provided the opportunity for employment services in the
developing nations.
International trade is the reason for the rising living standards of
people
all over the world.”
9.
10. The concept of international trade emerged as a sub-
part of economic study that deals with the patterns,
causes, and effects of global trade. Since the 18th
century, the topic has been debated to assess its effect
and consequences.
11. One of the earliest subfields of economic theory is that of
global trade and commercial policy. Government officials,
thinkers, and economists have debated the factors that
influence international trade from the time of the ancient
Greeks to the present. They have questioned whether trade
benefits or harms a country and, more importantly, have
sought to identify the best trade policies for various nations.
12. Since the time of Greek philosophers, the only tension in
international trade has been that domestic businesses,
workers, and the economy will be affected by foreign
competition. Philosophers analyse the gains from such trade
and compare them to the losses of domestic business, thus
comparing them to the conclusion of such trade. The tensions
caused by this dual perspective on trade have never been
resolved. The theories of International trade are
13. Classic or country-based theory of International trade
14. The classical theory of trade states that goods are
exchanged against one another according to the relative
amounts of labour embodied in them. It is based on the labour
cost theory of value. Goods that have equal prices embody
equal amounts of labour. The classic or country- based
international trade theory has the following division –
15. The Mercantilism theory was developed in the 16th
century, and it was one of the earliest efforts to develop an
economic theory.
16. The Absolute Cost Advantage was introduced in 1776 by
economist Adam Smith. He questioned the leading mercantile
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theory of the time in his publishing – The Wealth of Nations.

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17. The Comparative Cost Advantage challenged the absolute
advantage theory that some countries may be better at
producing both goods and, therefore, have an advantage in
many areas.
18. The Heckscher-Ohlin theory introduced by Smith and
Ricardo didn’t help countries determine which products would
give a country an advantage. Both theories assumed that
free and open markets would lead countries and producers to
determine which goods they could produce more efficiently.
19. Modern or firm-based theory of International trade
20. The modern or firm-based theory emerged after World War
II. It evolved with the growth of multinational firms and their
expansion. The theory incorporates other products and factors
like customer loyalty and technology. The modern or firm-
based theory of International trade has the following theories –
21. Country similarity theory was given by Swedish economist
Steffan Linder in 1961, as he tried to explain the concept of
in-train industry trade. His theory proposed that consumers in
countries that are in the same or similar stages of
development would have similar preferences.
22. The Product life cycle theory by Raymond Vernon, a Harvard
Business School professor, developed the product life cycle
theory in the 1960s. The theory, originating in the field of
marketing, states that a product’s life cycle has three distinct
stages namely new product, maturing product, and
standardised product.
23. Global strategic rivalry theory was introduced in the
1980s and was based on the work of economists Paul
Krugman and Kelvin Lancaster. Their theory focused on
multinational companies and their efforts to gain a
competitive advantage against other global firms in the
same field.
24. Porter’s National Competitive Advantage Theory was part of

the
continuing evolution of international trade theories, Michael
Porter of Harvard Business School developed a new model in
1990 to explain national competitive advantage. His theory
stated that a nation’s
competitiveness in an industry depends on the capacity of the
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 industry
to innovate and upgrade.

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OBJECTIVE OF THIS STUDY

Creating a project file on Indian exports and imports holds

significant importance due to several reasons:

1. Economic Significance:India’s international trade plays

a vital role in its economy. Documenting and analyzing export
and import data can provide insights into the country’s economic
health, growth prospects, and trade relationships with other
nations.

2. Policy Development:Governments formulate trade

policies based on data and analysis. A project file can serve as a
repository of information for policymakers to understand trade
patterns, identify areas of improvement, and develop strategies
to enhance competitiveness in global markets.

3. Business Opportunities:For businesses, especially

exporters and importers, a project file can offer valuable
information for market research and identifying new
opportunities. Understanding which products are in demand in
international markets and where potential import gaps exist can
help businesses make informed decisions about product
development and market entry strategies.

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4. Risk Management:International trade involves various
risks, including currency fluctuations, geopolitical tensions, and
regulatory changes. A project file can help businesses and
policymakers assess and mitigate these risks by providing
insights into market dynamics and identifying potential
challenges.

5. Performance Evaluation:Businesses can use project

files to track their export and import performance over time.
Monitoring key metrics such as trade volume, market share, and
profitability can help companies identify areas for improvement
and make strategic decisions to optimize their trade operations.

6. Compliance and Documentation:Exporters and

importers must comply with various regulations and
documentation requirements. Maintaining a comprehensive
project file can ensure compliance by keeping track of permits,
licenses, certificates, and other necessary documents related to
trade transactions.

7. Educational and Research Purposes: This Project files

on Indian exports and imports can serve as valuable resources
for students, researchers, and professionals studying
international trade, economics, and business. They provide real-
world data and case studies for analysis and academic research.

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CHAPTER-3 REASEARCH METHODOLOGY

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3
Research Methodology
Research Methodology This research is an analytical in nature. The present study
is based on only secondary data is collected from various journals, books, and
hand book of statistics of Indian economy, RBI, EXIM reports and world bank
indicators. Researcher has been selected eighteen years in India. The period of
the study is from 2000 to 2017. Import: The term trade in is resulting from the
theoretical meaning as to carry in the merchandise into the harbor of a nation.
The purchaser of such goods and services is referred to an importer. Types of
Import: There are the following two basic types of imports of a country.
Industrial and consumer goods. Intermediate goods and services. Advantages
of Import: Reduce dependence on existing markets. Exploit international trade
technology. Extend sales potential of existing products. Maintain cost
competitiveness in business. Disadvantages of Import: Importation of
items from other countries can increase the risk of getting them which is no
more common in the warm weather. It leads to excessive
competition It also
increase risks of other diseases from which the country is exporting the goods.
Export: The term export is derived from the conceptual meaning as to ship the
goods and services out of the port of the country. The seller of such goods and
services is referred to as an export. Types of Export: Physical export: if the
goods physically go out of the country. Deemed export: if the goods and
services are supplied to another country. Advantages of Export: Exporting
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is one way of

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the increasing your sales potential. Increasing sales and profits. Reducing risk
and balancing growth. Sell excess production capacity. Gain new knowledge
and experience. Disadvantages of Export: Extra costs. Financial risks. Export
licenses and documents. Market information. Why Export is Important to the
Economy: Exports plays an Important role in every country‟s economy,
influencing the level of economic growth, employment and the balance of
payments. Lower transport costs, globalization, economies of scale and reduced
tariff barriers have all helped exports become a bigger share of Indian national
income. Importance of exports can be better explained as follows: Employment:
growth is exports can create employment. For example, the growth in textile
sector exports have created many jobs in the past, such as Garments in
Tirupur.
Traditionally export jobs have been in manufacturing industries – an
important sources of full time employment, especially in industrial regions. In
recent years, exports have become more diversified with a greater industrial on
service sector based exports. Economic Growth: exports are a component of
aggregate demand (AD). Rising also have a knock on effect to related services
industries. For example, the success of commodities like leather goods will help
the local economy to grow. Similarly a fall in exports, during the global economic
downturn can have a big negative impact on Indian economy. Current Account
Deficit: the strength of exports has a large role in determining the current
deficit, in the past few decades, Indian has had a persistent current account
deficit, which many attribute to the Indians relative poor export performance.

Taxation in imports and exports

Taxation plays a significant role in India's export and import transactions,

influencing the cost structure, competitiveness, and regulatory compliance
of businesses engaged in international trade. Here's an overview of the
taxation framework applicable to India's export and import activities:

1. Export Taxes:

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Goods and Services Tax (GST): Generally, exports of goods and services are
considered zero-rated under GST, meaning that no GST is levied on the export of
goods or services. Exporters can claim input tax credits on GST paid on inputs
used in the export process.
Duty Drawback: The Duty Drawback Scheme allows exporters to claim a refund
of customs duties, excise duties, and GST paid on inputs used in the manufacture
of exported goods. This scheme aims to neutralize the incidence of taxes and
duties on exported products.

2. Import Taxes:

Customs Duty: Imported goods are subject to customs duties, which may
include basic customs duty, additional customs duty (commonly known as
countervailing duty or CVD), and integrated goods and services tax (IGST) where
applicable.
Customs duties are levied to protect domestic industries, generate revenue,
and regulate imports.
IGST: Imported goods are also subject to IGST, which is levied on the value of
imported goods, including customs duty and other applicable charges. IGST is
a part of the GST framework and is levied on the import of goods into India.

3. Export Promotion Schemes:

Export Promotion Capital Goods (EPCG) Scheme: Under the EPCG Scheme,
exporters can import capital goods at concessional customs duty rates for the
purpose of enhancing their export competitiveness. Export obligations are
imposed on beneficiaries under this scheme.
Merchandise Exports from India Scheme (MEIS): MEIS provides exporters with
duty credit scrips based on a percentage of the Free on Board (FOB) value of
exports. These scrips can be used to pay customs duties on imported goods or be
transferred/sold to other exporters.
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4. Export Oriented Units (EOUs) and Special Economic Zones (SEZs):

EOUs and units located in SEZs enjoy various tax benefits, including exemption
from customs duty, excise duty, and GST on inputs procured domestically or
imported for the production of goods destined for
export. Anti-dumping Duties and Safeguard Duties:

India imposes anti-dumping duties and safeguard duties on certain imported

goods to protect domestic industries from unfair trade practices and sudden
surges in imports. These duties are imposed in accordance with
international trade regulations and may affect the cost of imported goods.
Understanding and complying with the taxation framework is essential for
businesses involved in India's export and import activities to ensure cost-
effectiveness, regulatory compliance, and competitiveness in the global
marketplace. Additionally, tax policies and schemes may undergo revisions or
amendments over time, necessitating continuous monitoring and adaptation by
stakeholders in the international trade ecosystem.

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Chapter 4 Data analysis

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India’s Trade Performance in FY 2023-24 and Strategy to
Explore New Export Markets

India has released its latest trade data, forecasting that export
figures will sustain the peak achieved in the previous year,
reaching an estimated US$776.68 billion in the fiscal year (FY)
2023–24, slightly surpassing the US$776.40 billion recorded in
the preceding fiscal year. According to the Ministry of Commerce
and Industry, FY24 concluded with the highest monthly
merchandise exports of the fiscal year, totaling US$41.68 billion
in March 2024.

Total goods imports by India in 2023–24 decreased by 5.66

percent to US$675.44 billion.

Looking ahead, India is actively working on expanding its export

portfolio beyond traditional sectors like iron ore and agricultural
commodities. The focus is on diversifying into electronics,
pharmaceuticals, engineering products, and food items. The
Ministry of Commerce’s initiative aims to strengthen export
offerings by introducing goods such as alcohol beverages,
prepared meals, confectioneries, and value-added products like
jackfruit and bananas.

To tailor products to the preferences and legal requirements of

each target market, the commerce ministry’s strategy will entail
thorough market research and analysis.

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India’s trade performance in FY 2023-24
Trade during FY 2023-24 (April 1, 2023 to March 31, 2024)

category Export/Import 2023-24(US$ Billion) 2022-23(US$ Billion)

Merchandise Export 437.06 451.07

Import 677.24 751.97

Services Export 339.62 325.33

Import 177.56 182.05

Export 776.68 776.40

Overall trade Import 854.80 898.01

(merchandise+services)

TRADE BALANCE -78.12 -121.62

The information indicates that the values are an estimate and

are subjected to revision after the Reserve Bank of India (RBI)
releases trade data for FY 2023-24.

The 2023-24 trade data indicates that non-petroleum and non-

gems and jewelry exports have seen a modest increase of 1.45
percent, rising from US$315.64 billion in FY 2022-23 to US$320.21
billion in FY 2023-24. Key drivers of merchandise export growth in
FY24 were electronic goods, drugs

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& pharmaceuticals, engineering goods, iron ore, cotton yarn,
fabrics, and made-ups, handloom products, ceramic products,
and glassware.

TRADE DYNAMICS And Challenges

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India's export and import dynamics are
shaped by a myriad of factors, including global
economic conditions, trade policies, exchange
rates, and geopolitical developments. While
India has made significant strides in
expanding its export basket and diversifying
its trade partners, several challenges persist:

1. Trade Deficit: India's trade balance has been

characterized by persistent trade deficits, with
imports often outpacing exports. The
widening trade deficit poses challenges for
macroeconomic stability, currency valuation,
and external debt management.

2. Infrastructure Constraints: Inadequate

infrastructure, including ports, roads, and
logistics facilities, hampers the efficiency of
India's trade operations, leading to higher

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 transaction costs and delays in cargo
movement.

3. Regulatory Barriers: Regulatory hurdles,

bureaucratic red tape, and complex trade
procedures can impede the smooth flow of
goods across borders, inhibiting trade
growth and competitiveness.

4. Global Trade Uncertainties: Volatility in

global commodity prices, trade tensions
among major economies, and geopolitical
conflicts pose
uncertainties for India's export and import
prospects, necessitating agile policy responses
and risk mitigation strategies.

Opportunity and policy initiatives

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Despite the challenges, India's export and import
landscape present numerous opportunities for
growth and development. Leveraging its
demographic dividend, technological prowess, and
strategic location, India can explore the following
avenues:

1. Export Diversification: India can enhance its

export competitiveness by diversifying into high-
value-added sectors such as aerospace,
renewable energy, biotechnology, and advanced
manufacturing. Encouraging innovation, research
and development, and skill development will be
critical in this regard.

2. Strengthening Trade Infrastructure: Investing

in modernizing trade infrastructure, including
ports, airports, transport networks, and digital
connectivity, will improve efficiency, reduce costs,
and enhance India's competitiveness in global
trade.
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3. Trade Facilitation Reforms: Streamlining trade
procedures, reducing bureaucratic bottlenecks,
and implementing digital platforms for customs
clearance and documentation will simplify trade
processes and enhance the ease of doing business.

4. Regional and Bilateral Trade Agreements:

Actively engaging in regional trade blocs such as
ASEAN,
SAARC, and RCEP, as well as pursuing bilateral
trade agreements with key trading partners, can
open up new markets, promote cross-border
investment, and strengthen India's trade relations.

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CONCLUSION

India's export and import landscape reflects the

country's economic vibrancy, global integration,
and aspirations for sustainable development. By
harnessing its inherent strengths, addressing
structural bottlenecks, and pursuing proactive trade
policies, India can unlock its full potential as a
leading player in the global trade arena,
contributing to inclusive growth, job creation, and
prosperity for its people.

BIBLIOGRAPHY

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