India is the land of diversity that is popular not just for its culture and traditions but also for its market’s vibrancy. India is a South Asian nation that shares its land borders with China, Nepal, Bhutan in the north, Burma and Bangladesh in the east and Pakistan in the west. The Indian subcontinent shares its borders with these countries and gets its import and export business from here. India boasts of a flourishing trade not just in these countries but also in other parts of the world. India exported $322.8 billion worth of goods around the globe last year. India has been exchanging trade in countries for ages and share a nice relations with its long time trading partners. The trade business of India has witnessed an upsurge of 22.3% over the previous few years.
According to the Ministry of Commerce and Industry, India generates more than half of its business from exchanging trades. In the recent years, India has mostly exported pearls, precious and semi-precious stone and jewelry, mineral fuels, waxes, bituminous substances, agricultural products, automobiles, electronics, machinery, iron and steel, textiles, pharmaceuticals, petroleum products, and organic chemicals as part of its trade exchange business across the globe. The trading business of India generates 60% of the country’s revenue. The two most heavy goods trades by India are mineral fuels and gold. India’s mineral fuel trade is worth a sum of $64.685 billion, while the gold business is worth $58.465 billion. Due to the increased demand for mineral fuels and gold, India imports these trade products and then re-exports it at a higher value. The mineral fuel and gold imports comprise 53% of the total imports and 34% of the total exports. Along with the import and export of products, India is also involved in the services trade business worth a sum of $70 billion. According to the world trade organization, India ranks fifth in the commercial services exports and sixth in the retail services imports.
The two primary export destinations for Indian merchandise are the European market and the USA. During the evolution of Indian trade, business used to flourish only from China and the European Union; however, with time, Indian trade began to grow around the world. According to the Ministry of commerce and industry, there are fifteen large trading partners of India. The Indian trading partner provides 59.37% of the trade business. As per world economy statistics, China and India remain the only two large economies for global trade. The worth of Indian trade is for a sum of $76.1 billion. The export trade has grown by 11.3% to reach $330. 1 billion. The worth of the total imports in India grows at 12.7% to enter a sum of $514 billion. Due to the current pandemic situation around the world, trade has witnessed a downfall. The pandemic situation has impacted the country’s export and import rate and has led to its downfall.
Impact of the Covid-19 on Indian trade
The world is currently suffering from a world health crisis due to the outbreak of the novel coronavirus. The coronavirus pandemic has created havoc across the globe and has disrupted the lives and economies. The pandemic situation has impacted the trade exchange across the world. The primary industries that have suffered from financial deficit due to the COVID-19 condition are pharmaceutical, I.T. services, hospitality, automobile, aviation, and e-commerce. The global outbreak of coronavirus has adversely impacted business models, supply chain networks, and jeopardized business continuity operations. The e-commerce sector has witnessed a significant deficit and has faced difficulty meeting demands due to inequity unleashed by the curb on exports of preventive gear across the globe.
The export companies of India has recorded a deficit of 60.28%, which is the lowest in comparison to the last four years. The deficit accounts for an amount of $10.36 billion. Even the imports have also plunged a downfall by 58.65% to a sum of $17.12 billion. The trade deficit has declined from $15.33 billion to $6.76 billion from March. The country’s exports had dropped by 34.57 percent in March 2020. The decline in exports has been mainly due to the ongoing global slowdown, which got aggravated due to the current Covid-19 crisis. Barring iron ore and pharmaceuticals, all the remaining 28 key sectors registered negative growth in the last two months. The gems and jewelry shipments have also declined by 98.74%, followed by leather, which experienced a decline of 93.28%. The other factors which experienced a downfall are petroleum products by 66.22%, engineering goods by 64.76%, and chemicals by 42%.
Even the oil imports experienced a downfall by 59.03% to reach a sum of $4.66 billion. The critical import sectors which suffered a defeat are gold, silver, transport equipment, coal, fertilizer, machinery, and machine tools. The non-oil imports have fallen by 58.5% to reach a sum of $12.46 billion. The gold imports have stood up to $2.83 million against the $4 billion of last year. The nationwide lockdown due to the spread of the coronavirus outbreak, which shut the industrial units and restricted the movement of the goods, further depreciated the evolution of the export and import products. Major global players, including the USA, UK, Canada, Japan, Germany, France, Austria, Spain, and Bangladesh, have experienced the trade downfall and financial deficit. Around 70-80% of the orders have been canceled due to the COVID situation. The Indian overseas shipment, which grew by 10% to a sum of $314.31 billion, has also witnessed a downfall. As per recent statistics, the world trade is expected to fall by another 13%-20% in 2020.
The top 10 trade partners of India.
India’s largest trade partners are the USA, China, and Germany. India has also developed elaborate trade relations with Asian countries, the European Union, and other countries. Trade goods for 47.8% are exported to Asian countries, while 19.3% are sold to European importers. India also ships 18.8 of the rights to North America. A small percentage of about 9.1% of the goods it exported to Africa, Latin America, and Mexico. A product percentage of 3% is shipped to the Caribbean, and 1.1% is exported to Oceania and Australia. About three-fifths of the Indian exports are delivered across the globe. Saudi Arabia increased its import purchases from India y 10%. The USA scores second place in the shipping of the goods and has witnessed again by 4.7% in value. France also boosted its imports from India by 3%, and it trailed by 2.8% improvement for China. The import of products in Vietnam has experienced a decline of 18.2%. Here is a list of the top trade partners in India.
The United States is one of India’s top trading partners after overtaking China. The United States of America has surpassed China to become the top export destination for Indian products. India exports total merchandise worth $54.2 billion. The merchandise exported to the USA is 16.8% of the total exports of India. Last year as per reports, India exported products worth $34.287.7 million to the USA. India imports products worth $57.693.7 million to the USA. The trade earned by India from the USA is worth for a sum of $23.406 million. The major exported products from India to the USA include fruit, nuts, legumes, cotton, and dairy products. Spices, rice, and essential oils are the top agricultural items imported from India to the United States. India imports Californian Almonds, Washington Apples, walnuts, cashews, electronics, automobiles, aviation products, machinery products from the USA. The United States of America serves as the top supplier of medicines and medical appliances and surgical tools to India.
2. United Arab Emirates
The United Arab Emirates is the second-largest tradinsg partner of India. The country imports 9.2% of the products, which are worth $29.7 billion from the United Arab Emirates. The Indian export to the United Arab Emirates has increased by 37% to $29.78 billion. The export of the products in the United Arab Emirates expanded its export to the USA by 7% to reach a sum of $30.13 billion. As per trade experts, United Arab Emirates is expected to become India’s top trading partner. India ranks 17 in the export of products in the United Arab Emirates. The bilateral trade value between both the countries stood at USD 40940 million. The United Arab Emirates is the 10th largest investor in India. The Indian trade industry imports crude petroleum oil, gems and jewelry, wood, chemicals, and mineral fuels from UAE. The major exported products from India to UAE are cultured pearls, precious stones, apparels, garments, synthetic fibers, cereals, sugar, precious metals, fruits and vegetables, seafood, and machinery.
China once dominated as India’s top trade partner. Since ages, India has been exchanging trade with China. India exports products like agricultural products, food grains, machinery, textiles to China. India imports tea, electronics, and automobiles from China. In recent years the USA has overtaken China to become the top trade partner of India. China buys goods worths $17 billion from India. Last year the India China trade witnessed a rise of 3% to reach a sum of $56.77 billion. China is the source of around 14% of total Indian imports. Indian import from China includes; electrical machinery, cell phones, heavy machinery, telecom, power, plastic toys and critical pharma ingredients, furniture, pharma, fertilizer, food, and textiles.
4. Hong Kong
India exports products worth $11.5 billion to Hong Kong. Last year the export was worth for a sum of $14.6 billion. The decline has been due to the global pandemic situation. The fall has hit the gems and jewelry exports to Hong Kong. According to studies, imports from Hong Kong to India has increased by 2.2% over the last few years. In the last few years, the imports from Hong Kong have grown to $5.7 billion from $5.2 billion. India is Hong Kong’s 7th largest trade partner. Hong Kong made a cumulative total foreign direct investment of $1.976 billion in India. The primary commodities exported by India to Hong Kong are pearls, precious and semi-precious stones, leather, electrical equipment, cotton, fish, crustaceans, machinery, apparel, organic chemicals, optical and medical instruments, and plastics. The major commodities imported by India from Hong Kong are pearls, precious and semi-precious stones, machinery, optical and medical instruments, clocks and watches, plastics, unique woven fabrics, miscellaneous manufactured articles, organic chemicals, and paper.
Singapore is ranked amongst the top trading partners of India. India exports products worth $10.7 billion to Singapore. India also imports products worth for a sum of $14.89 billion from Singapore. India exports motors and steel products to Singapore. Presently, India and Singapore have a $17 billion trade deal, which is expected to grow up to $25 billion in the upcoming years. India exports series of products and services to Singapore that has maintained a positive trade balance for India. The Indian traders also export natural pearls, precious stones, metals, ships, boats, mineral fuels, mineral oils, mineral waxes, boilers, nuclear reactors, organic chemicals, aircraft, spacecraft, electric machinery, iron, essential oils, and pharmaceutical products to Singapore. India and Singapore share a great bond of culture and trade a relationship that is bound to grow strong in times to come.
6. Saudi Arabia
India exports products worth $ 5,56.72 million to Saudi Arabia. India also imports products worth $28,479.21 billion from Saudi Arabia. The total traded products from India is worth for a sum of $34,040.93. India buys 1.9% of its total exports from Saudi Arabia. The imports from Saudi Arabia have increased by 10% over the last few years. India’s major exports include basmati rice, textiles, and garments and machinery, while it imports organic and inorganic chemicals, metal scrap, leather, gold, and oil from Saudi Arabia. Both nations are expected to expand trade and cooperation and joint ventures in telecommunications, pharmaceuticals, health services, information technology, biotechnology, agriculture, construction projects, energy, and financial services.
The exported products from India to Germany is worth for a sum of $8.6 billion. The export from India to Germany has increased by 2.7% over the last few years. Germany is amongst the top-notch export destinations of India. The imported products from Germany to India are worth for a sum of $15,16.08 million. The total trade from Germany is worth for an amount of $24,063.52 million. The Primary exported products to Germany are Basmati and Nonbasmati rice, gems and jewelry, manufactured goods, engineered goods, agricultural products, ores and minerals, chemicals, leather products, and textiles.
8. United Kingdom
The exported products to Iraq from India is worth for a sum of $8.82 billion. The export to the United Kingdom has witnessed a rise of 2.7%. Indian imports from the United Kingdom is worth an amount of $7.1 billion. India exports machinery, nuclear reactors, boilers, apparels, pearls, precious stones, metals, coins, pharmaceutical products, footwear, electronics, iron, and steel products. India is ranked as the 13th largest export market for United Kingdom goods and services. India also is considered as the 12th most significant source of import for the U.K.
The most significant merchandise is a power generating machinery and equipment, metals, general industrial machinery and equipment, transport equipment, beverages, electrical machinery, appliances, and parts, professional, scientific, controlling instruments, and appliances along with chemical materials and products. The U.K. also exported £2.3 billion in services to India.
Bangladesh not just shares the borders with India but also is listed amongst its top export partners. The trade exchange of India with Bangladesh has increased by 2.6% to reach up to $8.3 billion. India offers duty-free access to several Bangladeshi products. The imports from Bangladesh to India is worth a sum of $1.04 billion. The first traded products between India and Bangladesh are gems and jewelry, Chemical products, Electronic goods, frozen seafood, basmati, and non-basmati rice, machinery, agricultural products, ores and minerals, leather products, handicrafts. As per analysis Bangladesh–India bilateral trade potential to be US$16.4 billion. Imports from India are mostly raw materials for Bangladesh’s export-oriented sectors. About 50 percent of the bilateral trade between Bangladesh and India takes place through land ports. Bangladesh–India’s bilateral relationship is showing early signs of developing positively over the long term.
The exported products from India are worth for a sum of $5,275.60 million. The imported products from India is worth for an amount of $15,843.94. The total trade from India is worth for an amount of $21,119.54. The major products exported from India to Indonesia include jute products, tobacco, woolen and cotton apparels, handloom goods, cotton, yarn, vegetable oil, cement, and other products. Last year Indian exchange trade worth $60.54 billion with Indonesia. Indonesia, after Singapore, is India’s largest trading partner. To strengthen the trade relations between the two countries, Jakarta imports Indian rice and sugar, while New Delhi’s significant import is Indonesian palm oil.
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