India’s real gross domestic product (GDP) at current prices stood at Rs. 195.86 lakh crore (US$ 2.71 trillion) in FY21 as per the second advance estimates (SAE) for 2020-21. Simultaneously, the per capita income at current prices was estimated at Rs. Rs. 127,768 (US$ 1,765.43) in FY21. 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$ 439.64 billion between April 2020 and February 2021, while imports totalled US$ 447.44 billion, according to data from the Ministry of Commerce and Industry. Merchandise exports stood at US$ 256.18 billion in 2020-21, while imports touched US$ 340.80 billion. The estimated value of services export and import for 2020-21 stood at US$ 183.46 billion and US$ 106.64 billion, respectively.
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 reserves stood at US$ 582.04 billion, as of March 12, 2021, according to data from the RBI.
- In March 2021, APEDA (Agricultural and Processed Food Products Export Development Authority) launched its first Virtual Trade Fair (VTF) to boost the export potential of agricultural and processed food products in India. The trade fair drove a large number of respondents, exporters and buyers from countries such as India, the United Arab Emirates, Brazil, New Zealand and France.
- The BRICS Contact Group on Economic and Trade Issues (CGETI) leaders planned to meet under India's chairmanship between March 9 and March 11, 2021, to address the priority areas for deliverables, the schedule and scope of the MSME roundtable conference workshop on Services Statistics and the BRICS Trade Fair.
- In March 2021, India and Norway announced to conduct marine spatial planning in the oceanic space for the next five years in Lakshadweep and Puducherry.
- In March 2021, India and Kuwait announced to establish a joint ministerial commission to strengthen bilateral ties in sectors such as energy, trade, investment, manpower & labour and IT.
- In March 2021, India and Bangladesh announced to expand cooperation across the entire gamut of water resources issues in the India-Bangladesh water resources secretary-level meeting held under the joint rivers commission.
- In March 2021, the Union Cabinet approved a Memorandum of Understanding (MoU) between the Ministry of Youth Affairs and Sports of the Republic of India and the Ministry of Youth, Sports and Community Empowerment of the Republic of Maldives for cooperation in sports and youth affairs.
- In March 2021, Prime Minister, Mr. Narendra Modi, held a virtual summit with the Prime Minister of the Finland, H.E. Ms. Sanna Marin, to further expand and diversify India and Finland’s partnership.
- In March 2021, under the ongoing Sub-Mission on Agroforestry (SMAF) Scheme, the Ministry of Agriculture and Farmers Welfare signed a Memorandum of Understanding (MoU) with the Central Silk Board of the Ministry of Textiles on a convergence model for implementation of Agroforestry in the silk sector.
- In March 2021, APEDA and the National Small Industries Corporation Ltd. (NSIC) signed an MoU to ensure cooperation in a wide range of areas on the export potential of agricultural and processed food products manufactured by Micro, Small and Medium Enterprises (MSMEs).
- On February 5, 2021, the final day of Aero India 2021, a total of 201 MoUs, product launches and technology transfers were concluded.
Foreign Trade Policy
- Foreign trade policy 2021-26 is expected to focus on MSMEs and new export potential. In March 2021, the central government announced plans to establish a new mechanism to increase import screening in order to protect domestic manufacturers. Details of the new screening process would be available in the foreign trade policy 2021-26, which is expected to commence next month.
- The available data would help domestic manufacturers analyse the market potential of such goods.
- The foreign trade policy 2021-26 is also expected to boost MSMEs and e-commerce exports and identify new sectors to boost domestic export.
- 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.
Note: Conversion rate used for March 2021 is Rs. 1 = US$ 0.014