Along with studying global demands of goods/services Indian Import Data details, Daily lists of Indian ports like jnpt, Delhi, Chennai, nahava sheva, Mumbai. India Import Data provided by SEAIR EXIM.

1. Indian Import Data:
India Custom Data
Seair Exim Solution
Along with studying global demands of
goods/services Indian Import Data details, Daily
lists of Indian ports like jnpt, Delhi, Chennai,
nahava sheva, Mumbai. India Import Data provided
by SEAIR EXIM.

2. Broad Outline
• India’s increased presence in the global economy
accompanied by increasing integration with the
developing Asia.
• Other than with China , integration with the most
dynamic segment of the region-South East Asia- has
increased rapidly in the last few years.
• But has India’s presence made a significant impact on
developing Asian countries’ trade? If yes, where?
• What is the nature of integration where India has a large
presence?
• What is the impact of India’s investment on developing
Asia?

3. India’s Increasing Presence in the Global Economy
India Relative to the World (Percentage Shares)
1985 1995 2000 2005 2006
Exports of goods and services (Constant 2000 US$)
India 0.4 0.7 0.7 1.07 1.05
Imports of goods and services (constant 2000 US$)
India 0.49 0.81 0.81 1.00
GDP (Constant 2000 US$)
India 1 1.3 1.4 1.8 1.9
GDP, PPP (Constant 2005 international $)
India 2.6 3.3 3.7 4.4 4.5

4. Trends in the direction of trade: Evidence of
greater Integration with developing Asia
Share of India's imports
Share of India's exports
60.0 60.0
55.0
50.0
50.0
45.0 40.0
40.0
35.0 30.0
30.0
20.0
25.0
20.0 10.0
15.0
10.0 0.0
1998 1999 2000 2001 2002 2003 2004 2005 2006 1998 1999 2000 2001 2002 2003 2004 2005 2006
Industrial countries Asian developing countries Industrial countries Asian developing countries
India’s integration with developing Asia evident in both
exports and import trends.

5. Pattern of Integration with Developing Asia
Increasing importance of China and South-East Asia in
India’s exports and imports.
South Asia’s role much smaller- especially in India’s
imports.
Integration with China, SE Asia dominating aspect of
integration with dev. Asia

6. India’s Presence in South-East Asian countries’
Trade
Increase in India’s presence in South-East Asian
countries’ trade, especially in recent years.
But India has not yet made a big impact in overall trade
of the countries of this region- accounts for maximum 3%
of trade

7. India’s Presence in South Asian countries’ Trade
India relatively more important for South Asian
countries.
Significant increase in India’s share in the case of Sri
Lanka, Nepal and Pakistan.
India’s importance for Bangladesh more or less constant

8. Nature and Pattern of South Asian
Countries’ Integration with India:
Bangladesh and Sri Lanka

9. India’s Share in Bangladesh's Export and
Import
Bilateral trade doubled from 1998 to 2006. Large informal
trade implies integration with India more than that shown by
recorded trade.
But, in both, India more important as a source of imports
and less as a market for Bangladesh’s exports.

10. Reasons for Ballooning Trade Deficit
 Bangladesh’s trade regime more liberal in terms of the
length of time, the coverage of items and pace,
compared to India.
 Level of tariffs and other protective duties on imports
in India, higher than in Bangladesh even in 2001 (Islam,
2004).
 Between 1985 to 1999, 50% appreciation of the Taka
vis-à-vis the Rupee (World Bank, 2006), compared to
its value in mid 1980s.
 Bangladesh’s exports heavily biased towards textiles
and ready made garments.
 India is itself an exporter of similar products and hence
a competitor.

11. Other reason: Ineffectiveness of SAPTA/SAFTA
 Restrictions contained in the trade agreements SAPTA
& SAFTA (e.g. limited product coverage, existence of
negative list, restrictive rules of origin)
 Also, the preferences accorded by India not much
effective - are limited in terms of products that are of
Bangladesh’s export interests.
 Para-tariff and non-tariff barriers, including restrictive
rules of origin Rules of Origin (ROO) hinder
Bangladesh’s exports to India.
 Quota fixed for textile exports by Bangladesh to India
under trade agreement recently (since 2007) yet to be
fully utilised.

12. Composition of Bangladesh’s Imports from India:
1998-2003 and 2004-2006
• Basic necessities like cereal & other food items form a
large part of imports in both periods.
• Other imports: intermediate goods, (cotton yarn,
petroleum products, etc.), machinery, vehicles etc.

13. Some Salient Features: Disaggregated data
• Shift towards import of raw cotton and machines for
processing textile fibres
• India is one of the top-3 suppliers of textile machineries
to Bangladesh in the world.
• Bangladesh depends on imports of input and machinery
for its textiles exports
• It seems Bangladesh has been able to effectively use
trade with India -by sourcing the required inputs and
capital goods - in sustaining export of its most
important foreign exchange earner - textiles and ready-
made garments (RMG).

14. Composition of Bangladesh’s Export to India:
1998-2003 and 2004-2006
• India is an important market for Bangladesh’s export of
chemical fertilisers (urea), and its input ; anhydrous
ammonia
• Since 2004, of the important markets-Australia, USA,
France, etc. India the single largest market
• India accounted for nearly 88% of Bangladesh’s export of
urea in 2007, from 10% in 1998.

15. Nature of Integration: Shallow
Some diversification in Bangladesh’s exports to India. But
India not a large market in overall exports.
Integration confined to mainly cross-border trade. Some
increase in investment-but sporadic and not given rise to
much trade-investment nexus yet.
Some change has begun.
FDI Inflow in Bangladesh (US $ Million)
FDI 2000 2005 2006
India
8.4 2.7 1
Global Total
578.6 845.3 490.3
India’s share (%)
1.45 0.32 0.20

16. India’s increasing importance for Sri Lanka
• In 1996, India replaced Japan as the largest source of imports to
Sri Lanka.
• India-Sri Lanka FTA (ISLFTA) implemented in 2000 and duty
free access to Indian market by 2003 in many products.
• India has become even more important both as a destination
for Sri Lanka’s exports as well as a source of imports by Sri
Lanka.
• Growing importance of India in Sri Lanka’s exports: from 16th in
2000, 3rd largest export destination since 2003.
• Growth in export earnings to India has far outstripped total
export earnings for the country since 2001 and helped reduce

17. India’s Share in Sri Lanka's Export and Import
20.0 10.0
9.1
18.0 9.0
17.3
16.0 16.5
17.3 8.0
14.0 13.8 7.0 7.0
12.0 6.0
11.1
10.0 9.5 5.0 5.0
8.0 4.0
3.6
6.0 3.0
4.0 2.0
1.5
2.0 1.1 1.0
0.0 0.0
1999
2001
2003
2004
2002
2005
India's Share in Sri Lanka's Import from World
India's Share in Sri Lanka's Export to World

18. Composition of Sri Lanka’s Exports to India:
1999-2002 and 2003-2005
•Visible shift from agricultural to manufacturing goods.
•Refined copper products and vansapati, main drivers of export
growth in period 2003-2005.
•Some diversification in exports, rise of exports of electrical,
electronic equipment - electric conductors and memory chips,
between the two sub-periods

19. Strengths and weaknesses of Sri Lanka’s
export success
• Momentum in Sri Lanka’s exports to India, spilled over to
items in India’s ‘negative list’-plastics, rubber articles,
textile articles (Weerakoon, 2008)
• New products –ceramics, value-added tea entered Sri
Lanka’s exports to India (Kelegama, Mukherjee, 2007).
• But, export success driven mainly by 2 commodities-
copper articles and vanaspati
• Likely to be more of ‘trade deflection’. The recently signed
ASEAN-India FTA could pose challenge to Sri Lanka’s
exports of these products to India.

20. Investment links in Trade
• Integration with India has lead to inflow of FDI, in copper
products, vanaspati, cement, automobile components,
chemicals, electrical equipments.
• India now 5th largest investor- accounts for 6% p.a.
• Indian investment with a view to buy back for the duty
free Indian market, has contributed to exports also.
• Increased diversion of investment towards
• --services
• -within manufacturing towards, machinery and transport
equips.
• Growing opportunity for intra-industry links- joint
ventures already in tyres, plans to set us automobile
assembly operations (Kelegama, 2009).

21. Composition of India’s outward FDI and India’s
importance in FDI Inflows in select developing Asian
countries
•Developed countries, together with Channel Islands (22%)
and Mauritius (8%) accounted for 70% of India’s outward
FDI between 2003-2007.
•Within developing Asia, more developed countries like
Singapore and Hong Kong together accounted for another
8%.
•Therefore, barring countries like, Sri Lanka and Nepal,
India’s share in other dev. Asian countries is meager.
•Increase in India’s investment in Indonesia, Thailand,
China in 2007, although very small share.

22. Some Tentative Observations: Possibilities of
Future Integration
India’s integration with SE economies is in a nascent
phase
The high rate of growth in trade (and investment to
some extent), in the last few years, perhaps indicates
strong potential for future integration.
In this, India-ASEAN FTA is also expected to play an
important role.
But India-ASEAN FTA could pose significant challenge
for Sri Lanka –India integration. That could also alter
the nature and pattern of integration witnessed thus
far.

23. Some Tentative Observations: Possibilities of
Future Integration-contd.
• The global financial crisis and recession in the Northern
markets, also highlight the need for diversification of
export markets. Recent trade info, shows the initial signs
of this happening.
• A lot however, depends on whether India can sustain its
high growth path in the aftermath of the global crisis.
Given increasing protectionism in the major markets of
India’s exports, thin chances of exports reaching the
heights it had witnessed earlier. In this scenario, India has
to depend even more on domestic demand to spur
growth. Whether or not that can happen is open to
debate.