India’s Role in World Trade
India is a member of the prestigious WTO; she had joined it on April 1, 2001. Our government also seems to be eager to achieve a state of complete globalisation. This would ultimately lead us to green pastures of a free economy. It has been predicted that by the year 2020, India would become a full-fledged free market system. During the recent past, India’s contribution towards world trade was only 0.67 per cent. This percentage should rise to 1 per cent (minimum). But the trends of exports and imports do not throw up a healthy picture. We may touch a figure of 1.0 per cent in the year 2007, if our economy continues to perform despite all odds. India exports tea, coffee, pulses, oil seeds, sugar, processed foods, meat, milk products, sea products, iron ore, manganese ore, chromium ore, aluminium, mica, coal, leather and products thereof, diamonds and jewellery, chemicals, engineering goods (light and heavy) engineering consultancy services, textile goods and apparel, handicraft and carpets, spices and computer software. India imports fertilisers, crude petroleum, pearls and diamonds, machine tools, electrical machines, professional equipment, electronic parts, organic and inorganic chemicals, medicines, fruits, raw materials of various types, consumer goods, iron and steel, coal and other special items needed by the industries of the country.
The government in the centre and various states have taken necessary steps to boost global trade. Under the EXIM Policy (2000-01), India had converted four Export Processing Zones (EPZs) into Special Economic Zones (SEZs). These are located at Kandla, Santa Cruz, Kochi and Surat. Exports would get a boost due to this step, the union government presumes. Further, SEZs have been declared Duty Free Enclaves (DFEs). Besides, Nanguneri (Tamil Nadu), Postara (Gujarat); Kalpi (West Bengal), Bhadohi (Uttar Pradesh), Kakinada (Andhra Pradesh), Dronagiri (Maharashtra) and one township of Madhya Pradesh would soon have SEZs.
There are eleven Import Entry Gates, which control the imports of 300 sensitive items into the country. These are: Mumbai, JLN Port, Kolkata, Chennai, Vishakhapatnam, Kochi (all ports); New Delhi, Mumbai, Chennai, Kolkata (all airports); and Tughalakabad (international container depot).
The total number of EPZs has gone down to four; they are located at NOIDA, Chennai, Falta and Vishakhapatnam. Further, till the end of December 2001, there were 1,353 EOUs operating in the country. In order to boost exports, the government has also planned to start EPZs at Mumbai, Greater NOIDA and Kanchipuram. ITPO is a government organisation that promotes India’s export activities and organises trade fairs in India and abroad. It is playing a lead role in the arena of export promotion. The government had also launched Export Promotion Industrial Park (EPIP) Scheme in 1993-94. Till date, it has approved the establishment of twenty-three EPIP parks.
By the end of December 2000, there were 4 Golden Superstar trading houses, 9 superstar trading houses, I golden star trading house, 42 star trading houses, 61 golden trading houses, 13 star trading houses, 98 golden export houses and 189 export houses operating in India. Thus, there were 2,474 trading houses of all types operating on the country (till December, 2000).
The typical climate and geography of Indian peninsula have much to offer to the world. We are the largest producers of milk and mica. Our fruits and products there of have good demand abroad. Further, small and heavy engineering goods and services of India are also in great demand. We are the leading exporters of software, technical manpower and project consultancy services. We have the largest pool of technical manpower in the world. Our infrastructure has been developed, at least to the extent of putting us in the frontline of exporting States. We are the fourth largest economy of the world. Then, why are we not having a major chunk of the world trade?
There are many reasons of this fiasco. Bureaucratic delays, lack of knowledge about (foreign) markets, cultural disparities, lack of funds, insecurity in the minds of local investors and communal riots are some of them. Free market economics would gradually drive them out of the country. However many of them, deeply embedded in the traditional Indian psyche, may not be eliminated altogether. Further recession in our traditional market niches (the USA, Europe and Japan) has also led to reduction in exports from our soil.
And lastly, figures speak more than words. During the fiscal year 2001-02, India’s exports stood at US$ 43,998.53 million; during the previous fiscal year, this figure was US$ 44,035.37 million. So, a negative growth rate of 0.08 per cent was observed in 2001-02. During the fiscal year 2001-02, the country’s imports stood at US$ 50,654.01 million; this figure was US$ 50,113.25 million during the previous fiscal year. So, a positive growth rate of 7.36 per cent was observed in the year 2001-02. The oil import bill had dipped by 12.73 per cent cent during 2001-02. But non-oil imports had risen by 7.36 per cent during 2001-02. A rise in non-oil import,’ proves that our economy had not recovered’ from the slow down. During the fiscal year 2001-02, our trade deficit was US$ 6.655.48 million. We can reduce this deficit if we export more. We can achieve this stage by the end of the year 2020, when our exports might exceed our imports. But in order to achieve this aim, our government, export houses and manufactures would have to make courageous and sincere efforts. This target can be achieved.