The integration of domestic economy through the twin channels of trade and capital flows has seen acceleration over the last two decades as India’s GDP reached Rs 203.39 trillion (US$ 2.88 trillion) in 2019–20*. Simultaneously, the per capita income also nearly trebled during these years. India’s trade and external sector had a significant impact on the GDP growth as well as expansion in per capita income.
Total export from India (Merchandise and Services) stood at US$ 528.45 billion in 2019–20, while total import was estimated at US$ 598.61 billion according to data from the Ministry of Commerce and Industry. Merchandise export stood at US$ 314.31 billion in 2019–20, while merchandise import touched US$ 467.19 billion in the same period. The estimated value of services export and import for 2019–20 stood at US$ 214.14 billion and US$ 131.41 billion, respectively.
In 2020–21 (till July 2020), total export from India (merchandise and services) stood at US$ 141.82 billion, while total import was estimated at US$ 127.76 billion according to data from the Ministry of Commerce and Industry. India registered a trade surplus of US$ 14.06 billion from April 2020 to July 2020.
According to Mr Piyush Goyal, Minister for Commerce and Industry & Railways, the Government of India is keen to grow export and provide more jobs for young, talented, and well-educated people as well as for semi-skilled and unskilled workforce in India.
India's foreign exchange reserve was Rs 39.64 trillion (US$ 542.01 billion) as of September 4, 2020, according to data from the RBI.
- On September 10, 2020, Prime Minister Mr Narendra Modi launched the Pradhan Mantri Matsya Sampada Yojana (PMMSY), a flagship scheme for the fisheries sector with an estimated investment of Rs 200.5 billion (US$ 2.7 billion) for implementation over a period of 5 years from FY 2020–21 to FY 2024–25. An online digital platform, e-Gopala App, was also launched to help farmers choose better-quality livestock.
- On September 9, 2020, Mr Nitin Gadkari, Union Minister for Road Transport & Highways and Micro, Small and Midsized Enterprises (MSME), stated that he aims to enhance MSME contribution to the GDP from about 30% to 50% and from 49% to 60% in exports. He added that the government is targeting to create ~50 million additional jobs in the MSME segment/industry in 5 years
- On September 7, 2020, CSIR–Central Mechanical Engineering Research Institute (CMERI), Durgapur, and National Institute of Solar Energy (NISE), Gurugram, signed an MoU for a ‘Strategic Association’ to boost the Solar Energy industry.
- On September 2, 2020, the Union Cabinet approved an MoU between India and Japan for improving quality and testing Indian textiles and clothing for the Japanese market.
- On September 2, 2020, the Union Cabinet approved an MoU between India and Finland for cooperation in the fields of Geology and Mineral Resources and provide a framework to promote cooperation in the fields of geology and mineral resources between the participants for mutual economic, social and environmental benefit.
- On August 21, 2020, Atal Innovation Mission (AIM), NITI Aayog and Business Sweden, on behalf of India Sweden Healthcare Innovation Centre, announced collaboration to promote the disruptive potential of Indian entrepreneurs and boost the vibrant start-up ecosystem across the country.
- In July 2020, Indian Railways handed over 10 broad gauge (BG) locomotives to Bangladesh under grant assistance from the Government of India.
- In June 2020, MoU on Indo-Denmark Energy Cooperation was signed between the Ministry of Power, Government of India and the Ministry for Energy, Utilities and Climate, Government of the Kingdom of Denmark to develop a strong, deep and long-term co-operation between two countries in the power sector on the basis of equality, reciprocity and mutual benefit.
- In February 2020, MoU was signed between the Department of Health and Family Welfare, Government of India and Department of Health and Human Services, Government of the United States of America.
- In February 2020, President of Portugal, H.E. Mr Marcelo Rebelo de Sousa, Minister of National Defence of Portugal and India’s Minister of State for Shipping(I/C) and Chemical and Fertilizer, Mr Mansukh Mandaviya signed a MoU to develop a world class National Maritime Heritage Complex at Lothal, Gujarat with cooperation from the Republic of Portugal.
Foreign Trade Policy
- In the mid-term review of Foreign Trade Policy (FTP) 2015–20, the Ministry of Commerce and Industry enhanced the scope of Merchandise Exports from India Scheme (MEIS) and Service Exports from India Scheme (SEIS), increased MEIS incentive raised for ready-made garments and made-ups by 2% and raised SEIS incentive by 2% and increased the validity of Duty Credit Scrips from 18 months to 24 months. In April 2020, the Government extended FTP for one more year, up to March 31, 2021.
- In August 2019, the Ministry of Commerce planned to introduce new FTP aimed at providing incentives and guidelines for increasing export in the next five financial years, starting FY20.
India is presently known as one of the most important players in the global economic landscape. Its trade policies, Government reforms and inherent economic strengths has attributed to its standing as one of the most sought-after destination for foreign investments in the world. Also, technological, and infrastructural development being carried out across the country augurs well for the trade and economic sector in the years to come.
The Government of India has been working on striking important deals with the Governments of Japan, Australia, and China to increase contribution towards the economic development of the country and growth in the global market.
India has a potential to increase its goods and services export to Australia to US$ 15 billion by 2025 and US$ 35 billion by 2035.
*Provisional estimates at current prices
Note: Conversion rate used for September 2020 is Rs 1 = US$ 0.01370