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 exports from India (Merchandise and Services) stood at US$ 304.25 billion between April and November 2020, while imports totalled US$ 290.66 billion according to data from the Ministry of Commerce and Industry. Merchandise exports stood at US$ 173.66 billion in 2020-21, while imports touched US$ 215.69 billion. The estimated value of services export and import for 2020-21 stood at US$ 130.60 billion and US$ 74.98 billion, respectively. India registered trade surplus of US$ 13.59 billion between April and November 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. 42.75 trillion (US$ 581.13 billion) as of December 18, 2020, according to data from the RBI.
- On December 16, 2020, the Union Cabinet approved the Central Electricity Regulatory Commission’s proposal to ink a Memorandum of Understanding (MoU) between the Central Electricity Regulatory Commission (CERC), India, and the Federal Energy Regulatory Commission (FERC), USA, to strengthen cross-border cooperation in the electricity sector.
- On December 9, 2020, the Union Cabinet approved the proposal of Securities & Exchange Board of India (SEBI) to sign a bilateral MoU between the Securities and Exchange Board of India and Commission de Surveillance du Secteur Financier (CSSF), Luxembourg, to strengthen cross-border cooperation in the area of securities.
- On December 9, 2020, the Ministry of Road Transport and Highways signed an MoU with the Federal Ministry of Climate Action, Environment, Energy, Mobility, Innovation and Technology of the Republic of Austria on Technology Cooperation in the road infrastructure sector.
- On October 29, 2020, the Union Cabinet approved the MoU between India and Cambodia on cooperation in the fields of Health and Medicine. The MoU will be valid for a period of five years.
- On October 6, 2020, an MoU was signed between the Indian Sign Language Research and Training Center-ISLRTC (a national institute under the Department of Empowerment of Persons with Disabilities, Ministry of Social Justice and Empowerment) and NCERT (a national institute under the Ministry of Education) to make education materials accessible for children with hearing disabilities.
- In October 2020, an MoU was signed between the Electronics & Computer Software Export Promotion Council (ESC) of India and the Mexican Chamber of Electronics, Telecommunications and Information Technologies (CANIETI) to further strengthen bilateral trade between India and Mexico through cooperation in sectors such as pharmaceuticals, medical equipment, healthcare, agro-products, fisheries, food processing and aerospace.
Foreign Trade Policy
- On December 2, 2020, a meeting of the Board of Trade (BOT) was held under the chairmanship of the Commerce and Industry Minister Mr. Piyush Goyal. Focus of the meeting was on the new Foreign Trade Policy (2021-26), and outlining policies and steps to drive domestic production and exports. Mr. Piyush Goyal said, “We look at a single window that can help us improve the ease of doing business. People worldwide should trust that they can come and buy property, get all the required approvals, participate in India's trade and industry, expand the manufacturing side and the network of services.”
- 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.
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 December 2020 is Rs. 1 = US$ 0.014