Summer training project report

1. Summer Training Project
Analysis of import and export data of the
industries and companies
Project Guide: Submitted by;
Mr. Bhavnesh Lodha Kundan Vyas
Business Development Executive PGDM
Cyberlog Technologies Pte. Ltd. Aravali Institute of Management

2. 2
TABLE OF CONTENTS
1. Executive Summary...........................................................3
2. India’s Foreign Trade an Overview.................................5
3. Structure of Indian Industry............................................8
a) Tea and Coffee.....................................................................10
b) Sugar.....................................................................................12
c) Tobacco.................................................................................15
d) Beverage...............................................................................16
e) Leather..................................................................................18
f) Gems & Jewellery................................................................20
g) Cement..................................................................................22
h) Textile...................................................................................24
i) Iron & Steel..........................................................................26
j) Aluminum & Copper............................................................27
k) Machinery.............................................................................28
l) Plastic....................................................................................29
m) Organic and In-Organic Chemical.......................................31
n) Fertilizer................................................................................32
o) Pharmaceutical.....................................................................33
p) Cosmetic...............................................................................34
q) Electronic Goods..................................................................35
4. Findings...............................................................................39
5. Bibliography........................................................................43
6. Annexure.............................................................................44
a) Table 1: Export of India Country-wise for the year 2003-04 and
2004-05
b) Table 2: Export of India Country-wise for the year 2005-06 and
2006-07 up to September
c) Table 3: Import of India Country-wise for the year 2003-04 and
2004-05
d) Table 4: Import of India Country-wise for the year 2005-06 and
2006-07 up to September

3. 3
EXECUTIVE SUMMARY
For decades after independence in 1947, India embarked on a program of autarky
(national economic self-sufficiency) which included import substitution policies. By
1991, however, a sluggish economy combined with the forces of globalization led to a
more open Indian economy. There was simultaneously a gradual rise in exports,
imports, foreign direct investment (FDI), and overall economic growth. In the 1990s,
exports of goods and services rose from 6.2 percent to 8.2 percent of total output. By
the end of the decade, however, growth in exports began to level off due to reduced
international demand, especially with India's main economic partners, the United States
and the European Union (EU). Indian exports were further hit by serious competition
from east Asian countries, which had recently experienced depreciated domestic
currencies, which led to a decline in global prices for their manufactured goods. As a
result, exports of Indian textiles, chemicals, machinery, electronic goods, and
automotive parts all began to decline.
As compared to a couple of decades earlier, however, the size of India's foreign trade
has noticeably expanded, both in absolute terms and relative to the country's GDP.
Exports have again picked up since 1999, when they showed a 13 percent growth.
Imports have also ballooned, showing an average of 20 percent growth per year during
1992-2000. Total exports in 2001 are expected to be near US$46 billion and total
imports at US$51 billion. Petroleum constitutes the largest import item at more than
US$6 billion and accounts for 14 percent of total imports in 1999. Petroleum imports
may be as high as US$17 billion in 2001. Gems and jewelry constitute the single largest
export item, accounting for 16 percent of exports and earning about US$4.5 billion in
1999. The top 3 export destinations of Indian goods were the United States, Britain, and
Germany, which together constituted one-third of total Indian exports in 1999. In turn,
the top 3 import sources were the United States, Britain, and Belgium, together
constituting 21 percent of total imported items.
Indian economy grew in 2006/07 at a pace that was stronger than most had expected.
The surge (of 20 per cent plus) in merchandise imports has continued into its fifth year.
Although merchandise exports have also grown at a similar pace, given that imports are
considerably larger than exports, the merchandise trade deficit has continued to expand.
In 2005/06 the merchandise trade deficit rose to (US) $46 billion, compared to $14
billion a couple of years ago (2003/04).
It is estimated that in 2006/07, merchandise exports will increase to $126 billion and
imports to $186 billion, thereby leaving merchandise trade deficit of $60 billion. These
estimates are compatible with the data releases of the Director General of Commercial
Intelligence & Statistics (DGCI&S).

4. 4
Export
Industry-wise data for April-December 2006 revealed that exports of primary products
and manufactured products recorded a moderation in growth, while, petroleum products
maintained the growth momentum. Engineering goods, which accounted for 34.9 per
cent of manufactured exports, continued to remain as the growth driver of exports.
The moderation in the exports of primary products during April-December 2006 was
due to the decline in the exports of iron ore and cashew and also the deceleration in
wheat, rice and marine products. At the same time, exports of traditional agricultural
products such as sugar, raw cotton, tea, coffee, tobacco, spices and oil meal registered
strong growth.
In the manufactured exports, with the exception of engineering goods, all the other
major items (chemicals, gems and jewellery and textiles) showed a moderation in
export growth. Engineering goods recorded a growth of 38.0 per cent during April-
December 2006 (33.4 per cent a year ago) mainly due to the strong export performance
of machinery and instruments, and iron and steel. These two items together contributed
to 46 per cent of the growth in the exports of engineering goods. The US, the UAE,
Germany and Italy were the major markets for these products.
Gems and jeweler exports recorded a marginal growth (0.4 per cent) during April-
December 2006 as against 19.7 per cent registered a year ago. Exports of chemicals and
related products showed a deceleration in growth during April-December 2006.
Import
India’s merchandise imports posted a growth of 27.8 per cent during April-February
2006-07 (32.7 per cent a year ago) with the imports of petroleum, oil and lubricants
(POL) showing some moderation, while non-oil imports maintained the growth
momentum.
Industry-wise analysis shows that the imports of capital goods during April-December
2006 at 36.2 per cent showed a moderation in growth (41.0 per cent in the
corresponding period a year ago). However, within the capital goods, electrical
machinery and electronic goods maintained high growth. Exports of ‘mainly export
related items’ showed a decline during April-December 2006 with imports of
chemicals, and textile yarn showing a deceleration in growth and pearls, precious and
semi-precious stones and cashew nuts registering a decline.
Source-wise, China was the major source of imports during April-December 2006,
accounting for 9.4 per cent of total imports, followed by Saudi Arabia (7.6 per cent), the
US (5.7 per cent), UAE (4.8 per cent) and Iran (4.2 per cent). Region-wise imports from
OPEC countries showed marked rise during April-December 2006, mainly reflecting
imports of POL (for the previous year, country-wise break up of oil imports was not
furnished by DGCI&S).

5. 5
India’s Foreign Trade an Overview
Whole world has recognized India as super power of 21st century. India is youngest
county in the world growing a rate of more than 8 percent. Large population of India
provides market to the countries of the world. At the same time it provides
opportunities to India in terms of extracting the potentials of its manpower and other
resources to emerge as real super power. India's foreign trade should also reflect her
potentials to emerge as a super power
A merchandise export of India is continuously growing as the figure 1.1 shows a
(CAGR) of 26% in FY2006 from FY2002 and same the merchandise import also has
shown the (CAGR) of 29%. In the FY2002 the merchandise export of India was US $
44 billion and in the FY2006 it is US $ 142 billion, and merchandise import has shown
an increase of US $ 91 billion from the FY2002 to FY2006.India’s total trade turnover
has also increase by US $ 50 billion.1
Figure 1.1
1
Exim Bank of India, www.eximbank.com

6. 6
Export
Major part of India’s export goes to USA followed by United Arab Emirate and China
as shown in figure 1.2. In the FY2006 India export to USA of US $ 17,353.06 Million
and having a share of 17% of total India’s export (table a) and China with 8.3% share at
the second place.2
Export:Country-wise
JAPAN
ITALY
BELGIUM
GERMANY
Country
UK
HONG KONG
2005-06
SINGAPORE
2004-05
CHINA
U ARAB
USA
0 2 4 6 8 10 12 14 16 18
%Share
Figure1.2 Chart shows the major exporting countries of India3
Country 2004-05 2005-06
%Share %share
USA 16.4788 16.8328
U ARAB EMTS 8.7961 8.3342
CHINA 6.7227 5.2626
SINGAPORE 4.7891 6.5565
HONG KONG 4.4194 4.9076
UK 4.4066 4.3373
GERMANY 3.3833 3.4786
BELGIUM 3.0043 2.4435
ITALY 2.7365 2.7852
JAPAN 2.5473 1.4811
Table a: Table shows the share of countries in India’s total export
2
Director General of Foreign Trade, www.dgft.delhi.nic
3
DGCI&S, Kolkatta

7. 7
Import
USA is the biggest importer for India, UAE and Germany are at second and third place
respectively. In Figure 1.3 Import from USA was US $ 9,454 million in FY2006.4
Figure 1.3 Chart showing the major import of India
Import: Country-wise
Import: Country-wise
30,000
2525,000
20,000
20
US $ Million 15,000
2004-05
15
2005-06
10,000
%Share
2004-05
10
5,000 2005-06
0
5
UNSPEC IFIED C HINA U S A SWITZERLAND UAE BELGIUM Trade to GERM ANY AUSTRALIA UK
Unspecified
C ountries
0 Country
UNSPEC IFIED C HINA USA SWITZERLA ND UAE BELGIUM Trade to GERM A NY A USTRALIA UK
Unspecified
C ountries
Country
USA holds the major share in India’s total import i.e. 6.5%.as shown in figure 1.4.
Figure 1.4 Chart showing the share of countries in Indian import
4
www.dgft.delhi.nic.in

8. 8
Structure of Indian Industry
Indian industry is classified as per the Ministry of Commerce, GOI in the HS
(Harmonized system) code with 17 section and 99 chapters and Indian commodities are
classified as Principal Commodities.5
Table 1: Principal Commodities of India are:
Export Import
BULK IMPORTS
PLANTATION
Cereals & Preparations
Tea
Rice
Coffee
Wheat
AGRI & ALLIED PRODUCTS
Other cereals
Cereal
Preparations
Rice
Fertilizers
Wheat
Crude
Others
Sulphur & Un-roasted pyrites
Pulses
Manufactured
Tobacco
Edible Oil
Unmanufactured
Sugar
Manufactured
Pulp & waste paper
Spices
Paper board & mfrs
Nuts & Seeds
Cashew inclusive CSNL Newsprint
Crude rubber
Sesame & Niger seed
Non-ferrous metals
Ground nut
Metalliferrous ores & products
Oil Meals
Iron & Steel
Guergum Meal
Petroleum crude & products
Castor Oil
PEARLS, PRECIOUS & SEMI-PRECIOUS
Shellac
STONES
MACHINERY
Sugar & Molasses
Machine Tools
Processed Foods
Machinery other than electrical
Fresh Fruits & Vegetables
Electrical machinery
Fruits/Vegetable seeds
Transport equipment
Processed & misc. processed items
PROJECT GOODS
Meat & Preparations
OTHERS
Poultry & Dairy Products
Cashew Nuts
Floriculture Products
Fruits & Nuts
Spirit & Beverages
Wool raw
MARINE PRODUCTS
Silk raw
ORES & MINERALS
Synthetic .®.fibers
Iron ore
Pulses
Mica
Raw Hides & Skins
Processed Minerals
Leather
Other ores & minerals
Coal,coke&briquettes
Coal
Non-metallic minerals, manufacture .
LEATHER & MNFRS
Other crude minerals
Footwear
Organic Inorganic chemicals.
Leather & mfrs
Dyeing, tanning material.
GEMS & JEWELER
Medicinal & Pharma products.
SPORTS GOODS
Artf.resins, etc.
CHEMICALS & RELATED PRODUCTS
5
A book on Indian Trade and Industry Classification by Kumar & Garg

9. 9
Chemical products
Basic chemicals, Pharma & cosmetics
Other Textile yarn, fabrics, etc
Plastics & Linoleum
Manufactures of metals
Rubber, glass & other products
Profile. instruments, etc.
Residual chemicals allied products
Electronic goods
ENGINEERING GOODS
Wood and wood products
Machinery
Gold & Silver
Machine tools
Tea
Machinery & Instruments
Woolen Yarn and Fabrics
Transport equipments
Cotton yarn and fabrics
Iron & Steel
Man made f'mnt spun yarn
Iron & Steel Bar rod etc
Made up textile articles
Primary & semi-finished iron & steel
Ready made garments (wov.)
Other Engineering Items
Silk yarn and fabrics
Ferro Alloys
Milk & Cream
Aluminum other than products
Spices
Non ferrous metals
Oil seeds
Manufacture of metals
Jute raw
Residual Engineering items
Woolen & Cotton rags
ELECTRONIC GOODS
Veg. & animal fats
Electronics
Cotton raw and waste
Computer Software in physical form
Essential oils & Casper
PROJECT GOODS
Cement
TEXTILES
Computer Soft. physical form
Readymade garments
Other Commodities
Cotton, yarn, fabrics, made-ups etc
Manmade textiles & made-ups etc
Natural Silk textiles
Wool & woolen mfrs
Coir & coir mfrs
Jute mfrs
HANDICRAFTS
CARPETS
Hand-made excl silk
Mill-made excl silk
Silk carpets
COTTON RAW INCL WASTE
PETROLEUM PRODUCTS
UNCLASSIFIED EXPORTS

10. 10
Tea and Coffee Industry in India
The tea industry has an important and special place in the Indian economy. Tea is the
country's primary beverage, with almost 85% of total households in the country
consuming tea. India is the world's largest producer and consumer of tea, with India
accounting for 27% of the world tea production. India's expenditure on beverages and
processed foods accounts for 8% of food expenditure in rural areas, and 15% in urban
areas. India is also an important tea exporter, accounting for around 12-13% of world
tea exports. Further, certain varieties of tea (for example Darjeeling) are grown only in
India and are in great demand across the world. All Darjeeling teas possess the lightness
of flavors and fine coloring that set them apart from all other teas.
India's tea industry exports were estimated at US $ 905.11 million during FY2006,
accounting for 0.4% of India’s exports. In value terms, tea ranks as the fourth-largest
agricultural product export item from India, with exports of around US$410 million in
2004. In terms of employment, the tea industry employs around 1.27 million people at
tea plantations and 2 million people indirectly, of which 50% are women. The last fact
is particularly important when we consider that tea industry, to a large extent, drives the
economies of the regions where the tea gardens are concentrated, for example Assam.
Tea is the prime beverage consumed in India, and private final consumption
expenditure (PFCE) on tea, coffee and cocoa aggregated Rs. 134.96 billion in FY2005,
accounting for around 2% of India's PFCE on food, and 0.7% of India's PFCE. The
latest available data indicates that tea accounts for 90.6% for India's consumption of
stimulants (tea, coffee, and cocoa beans), followed by coffee (7.7%), and cocoa beans
(1.7%).
Year Value in US $ Million Volume Qty in thousands
2003-04 716.32 566,660.19
2004-05 828.89 638,823.25
2005-06 905.11 628,617.75
2006 up to 591.74 383,254.63
Sep.
Table 2: Showing the Export of Tea and Coffee Industry from India in past years

11. 11
Value of Tea and Coffee
1,400
1,200
1,000
800
Value in US $ Million
600
400
200
0
2003 2004 2005 2006 2007 2008 2009
upto
Sep.
Year
Figure 1.6 Showing the India’s export of Tea and Coffee in value
Above chart showing the continuous increase in export of tea and coffee in value from
India in last three years and forecasting is also reflecting the same. And figure 1.6
shows the export in volume.
Volume of Tea and Coffee
800,000
700,000
600,000
500,000
Qty in Thousands 400,000
300,000
200,000
100,000
0
2003 2004 2005 2006 2007 2008 2009
upto
Sep.
Year
Figure 1.7 Showing the India’s export of Tea and Coffee in Volume
In spite of accounting for around 27% of world's tea production, India accounts for only
12% of world's tea exports. India's international competitiveness in tea exports has been
on a decline. From being a pre-eminent supplier of the world's tea, India has lost ground
in virtually every export market. In the early 1980s, Indian tea exports accounted for
around 40% of the domestic production. By the end of 1980s, the share of the tea
exports fell to 30%. The decline continued till 1994 when exports accounted for only
20% of the domestic production of tea. Thereafter, the proportion of exports improved
to around 24% of the domestic production during 2003.
In recent years, the tea industry has accounted for a declining share of gross bank credit
(GBC) of scheduled commercial banks (SCBs). With GBC of Rs. 13.55 billion in
March 2005, the tea industry accounted for 0.37% of industry GBC of SCBs in March
2005, as compared with 1.08% in March 1995.

12. 12
Sugar Industry in India
Sugar is a prime requirement of the diet in every household in India, accounting for
around 5.5% of India’s private final consumption expenditure (PFCE) on food, and 2%
of India’s PFCE. In terms of PFCE, the share of sugar and gur (solidified cane juice) in
total food expenditure remained at around 6-7% during the 1980s and 1990s. The share
declined sharply during FY2004 because of significant decline in sugar prices.
With an estimated production of 18.6 mt in sugar year or (Sugar Year) SY2006 (sugar
year is from October-September), India is the second largest sugar producer in the
world (after Brazil), accounting for around 10-12% of world’s sugar production. Sugar
is India’s second largest agro-processing industry.
In recent years, the sugar sector has accounted for a declining share of gross bank credit
(GBC) of scheduled commercial banks (SCBs), largely because of decline in credit
during FY2005. With GBC of Rs. 60.30 billion in March 2005, the sugar industry
accounted for 1.65% of industry GBC of SCBs in March 2005, as compared with
1.91% in March 2000.
India’s sugarcane and sugar production is expected to increase in SY2006 because of a
10.3% increase in acreage under sugarcane—from 3.8 million ha in 2004 to 4.1 million
ha in 2005. UP accounts for more than 50% of the sugarcane average, 47% of
sugarcane production, and 40% of sugar production. Thus, India’s sugar production
declined in SY2002, SY2004, and SY2005 because of deficient monsoon conditions in
East and West UP, and a decline in area under sugarcane in these regions.
India’s total consumption of sugar has increased steadily despite fluctuations in
production. Sugar consumption during SY2005 was estimated at around 19.6 mt.
Consumption has increased at a 5-year compound average growth rate (CAGR) of
4.8%. Consumption increased at a 5-year CAGR of 5.2% during 1995-2000. Sugar
consumption is expected to increase at around 4.5% during SY2006-07, because of
strong economic growth, higher population, improved domestic supplies, and increased
demand for sugar from the beverages sector.6
India was the world’s second largest producer of sugar during 2005-06. Although the
raw material cost (estimated to account for 75% of the operating cost of the sugar
manufacturers) is regulated in the Indian sugar industry, scale economies do have the
potential of affecting the operating cost structures of sugar manufacturers.
6
www.icra.in

13. 13
Export of Sugar
1,400,000
1,200,000
1,000,000
800,000
Qty in Thousand
600,000
Sugar
400,000
200,000
0
2003 2004 2005 2006 upto
Sep.
Year
Figure 1.8 Showing Export of Sugar in Volume
India’s sugar exports are expected to decline during FY2007 because of the July 2006
notification by the GoI to ban sugar exports till March 2007. The ban would, however,
not be applicable to sugar exports on preferential quota to the US and the EU. Sugar
exports to the US and the EU would be permitted only through the Indian Sugar Exim
Corporation Ltd.
Export of Sugar
600
500
400
Value in
300
US $ Million
200 Sugar
100
0
2003 2004 2005 2006 upto
Sep.
Year
Figure 1.8 Showing the Export of Sugar in Value

14. 14
Sugar
2,000,000
1,500,000
Qty in Thousand 1,000,000
Sugar
500,000
0
2003 2004 2005 2006 upto
Sep.
Year
Figure1.9 Showing the Import of sugar in Volume
India’s sugar imports declined significantly during FY2001-03 because of rising
domestic availability and increase in customs duties. However, imports increased
during FY2004 and FY2005, because of lower domestic supply. In order to augment
sugar stocks for 2004-05 and enable the Government to meet the normative 3 months
consumption requirement of the country, the Advance License (AL) Scheme was
liberalized for raw sugar import, in as much as the imported raw sugar under AL can be
now processed into white sugar, sold in the domestic market, and allowing such
importers to fulfill export obligation within 24 months period or such extended period
as allowed by exporting indigenously manufactured white sugar.7
Sugar
300
250
200
Value in
150
US $ Million
100 Sugar
50
0
2003 2004 2005 2006 upto
Sep.
Year
Figure 1.10 Showing the Import of Sugar in Value
7
DGCI&S, GOI

15. 15
Tobacco Industry in India
The tobacco industry estimates that globally, 33 million people are engaged in tobacco
cultivation. However, this figure includes not only farmers who rely entirely on
tobacco, but also farmers who grow other crops besides tobacco, seasonal laborers,
family members and other part-time workers. Of these 33 million, approximately 15
million are in China and 3.5 million in India.
Although tobacco is grown in more than 100 countries, just four countries (Brazil,
China, India and the United States) account for two-thirds of total global production
and only two countries, Malawi and Zimbabwe, are significantly dependent on export
earnings from tobacco.1 Out of the 141 countries that export tobacco, only 18 derive
more than one percent of their total export earnings from tobacco. In only four of those
18 countries do tobacco exports account for more than five percent of total export
earnings. Export of tobacco from India has increase in the FY2005 and FY2006 after
the decline in the FY2004.
Tobacco
180,000
160,000
140,000
120,000
Volume in 100,000
80,000
Quantity
60,000
Tobacco
40,000
20,000
0
2003 2004 2005 2006 upto
Sep.
Year
Figure 1.11 Showing the Volume of Tobacco Exported
Tobacco
350
300
250
Value in 200
US $ Million 150
Tobacco
100
50
0
2003 2004 2005 2006 upto
Sep.
Year
Figure 1.12 Showing the value of Tobacco Exported

16. 16
Beverage Industry in India
Food and Beverages segment as compared to the previous year based on the estimates
made by the industry and interaction with the concerned representatives in the industry.
The industry is estimated to have achieved higher growth of 8 per cent in 2004-05 with
an estimated figure of Rs. 3584 billion. The overall industry has achieved
a growth rate of 8 % in value terms during 2004-05.
Beverage industry’s export of India is growing with the rate of 13-16% p.a. as shown in
the table b. Both in the term of volume and value it is becoming the important to the
Indian economy
Value in US $ Volume Qty in
Year
Million thousands
2003 27.22 35,092.86
2004 31.63 40,792.45
2005 58.32 83,541.51
2006 up to Sep. 30.09 38,035.38
Table b: Showing the Export of Indian Beverage Industry over the last few years
Export of Beverage from India
90,000
80,000
70,000
60,000
50,000
Qty in Thousands 40,000
30,000
20,000 Beverage
10,000
0
2003 2004 2005 2006 upto
Sep.
Year
Figure 1.13 showing the export of Indian Beverage Industry in volume

17. 17
Some sectors which have recorded Moderate and single digit
growth are – Food & Beverage (8%) , Bread (7.5%), Bread/ Organized (8%) ,
Culinary products/Snack
food(8%),Fruits and vegetables(5%) , Milk and Dairy products (4.5%), Milk (4.5) ,
Milk liquid /packaged(5%), Milk Products(8%), Milk powder including infant
milk(7%), Ghee(5.5%),Cheese/ Panner(8%) , Chocolates (8%), Sugar
Confectionary/Gums(4%) , Health Beverages/Malted Food(8%) , Tea (7%) .
Export of Beverage from India
60
50
40
Value in
30
US $ Million
20 Beverage
10
0
2003 2004 2005 2006 upto
Sep.
Year
Figure 1.14 Showing the export of Beverage Industry in value

18. 18
Leather Industry in India
The global leather industry is valued at about US$ 85 billion. Most of the producing
countries are developing countries, while developed markets such as the US are major
consumers of leather products China and Italy are the leading producing and exporting
nations in the world with exports worth US$ 19 billion and US$ 13 billion respectively.
India, with an output of US$ 4 billion and exports of US$ 2.4 billion, is placed third.
India has a 2.32 per cent share in the global leather trade and ranks eighth in the world
in terms of the country’s foreign exchange earnings from the industry. The composition
of exports has also been changing, with more and more value added products being
exported. In 2004-05, for example, value added finished products constituted around 80
per cent of the total exports from the industry. India has plans to double its leather
exports over the next 5 years. It has been estimated that India has the capacity to meet
nearly 10 per cent of global leather requirement.
The Indian leather industry comprises the following key sub-sectors - tanning and
finishing, footwear, footwear components, leather garments and leather goods and
accessories. A large part (nearly 60-65 per cent) of the production is done by the small/
cottage sector.
Leather and leather products production is centred in southern, northern and eastern
India. Key production units are located in Tamil Nadu, West Bengal, Uttar Pradesh,
Punjab, Karnataka, Andhra Pradesh, Haryana and Delhi. Tamil Nadu is the biggest
leather exporter in the country with the south accounting for 43 per cent of the
country’s share. The industry uses primarily indigenous natural resources with little
dependence on imported resources.
Export of Leather from India
1,800
1,600
1,400
1,200
Value in 1,000
US $ Million 800
600
400
200
Leather
0
2003 2004 2005 2006 2007 2008 2009
upto
Sep.
Year
Figure 1.15 Showing the Export of Leather Industry of India in Value

19. 19
Export of Leather from India
300,000
250,000
200,000
Qty in thousand 150,000
100,000
50,000
Leather
0
2003 2004 2005 2006 2007 2008 2009
upto
Sep.
Year
Figure 1.16 Showing the Total Export of India’s Leather Industry in volume
In the above charts we can see the export of leather industry is varying in both the
volume and value, but in the value term it is increasing in a constant manner and
volume-wise it will fluctuate in the future also.

20. 20
Gems and Jewellery Industry in India
The two major segments of the GJ business in India are gold jewellery and diamond
jewellery. While a predominant portion of gold jewellery manufactured in India is for
domestic consumption, a predominant portion of rough, uncut diamonds processed in
India in the form of either polished diamonds or finished diamond jewellery is
exported. Preference for gold dominates the domestic jewellery demand. The domestic
demand for gold jewellery is estimated at Rs. 390 billion in 2005, accounting for an
estimated 80% of the Indian jeweler market of Rs. 490 billion. The balance comprises
diamond jewellery (Rs. 80 billion), and other fabricated jewellery (Rs. 20 billion).
The GJ industry has an important role in the Indian economy. While a predominant
portion of gold jeweler manufactured in India is for domestic consumption, a
predominant portion of rough, uncut diamonds processed in the form of either polished
diamonds or finished diamond jewellery is exported. With an estimated consumption of
722 tonnes during calendar year or CY2005 (including jewellery consumption of 587
tonnes), India is the largest consumer of gold in the world. India is also estimated to
hold nearly 14,000 tonnes of gold, accounting for nearly 9% of the world's cumulative
mine production. Apart from its historical religious significance, gold is valued as an
important savings and investment vehicle.
The bulk of the Indian GJ exports comprise import of rough diamonds, cutting and
polishing in India, and re-export. As per data released by the Gems & Jewellery Export
Promotion Council (GJEPC), cut & polished diamonds (CPDs) accounted for 71.1% of
India's GJ exports of Rs. 733 billion during FY2006, followed by gold jewellery
(23.2%), rough diamonds (3.4%), and others (2.3%). Thus, two items-CPDs and gold
jewellery-account for around 95% of India's GJ exports.
With the increase in exports in recent years, the GJ industry has also accounted for an
increased share of gross bank credit (GBC) of scheduled commercial banks (SCBs).
With GBC of Rs. 198.66 billion in March 2006, the industry accounted for 3.61% of
industry GBC of SCBs in March 2006, as compared with 2.7% in March 2000.
Gems and Jewellery
2006 upto Sep.
2005
Year
2004 Gems and Jewellery
2003
0 5,000 10,000 15,000 20,000
US $ Million
Figure 1.17 Showing the export of Gems and Jewellery in value

21. 21
Gems and Jewellery
2006 upto Sep.
2005
Year
2004 Gems and Jewellery
2003
0 50,000 100,000 150,000 200,000
Qty in thousand
Figure 1.18 Showing the export of Gems and Jeweler in Volume
Figure 1.16 and 1.17 shows the export of Gems and Jewellery from the FY2003, in
spite of being a precious commodity its export has decline in past few years in term of
volume but value is increasing in the same manner as volume is decreasing. This
decrease in volume is of in these years diamond is exported maximum as compared
with other stones and gold, and diamond is much costly than other stones and gold.
Future growth in gold jewellery business is likely to driven by increased exports to US
and other markets, and domestic consumption. Although domestic consumption has
increased in 2003-05, consumption per capita is still very low, reflecting the high
proportion of the rural population and the social infrastructure of the country (the rural
population accounts for approximately 65-70% of domestic gold demand).
Although exports of gold jewellery have increased from Rs. 52.20 billion during
FY2001 to Rs. 170.15 billion during FY2006, the export business has been constrained
by an inability to compete in global markets on basis of price and superior design
capabilities.

22. 22
Cement Industry in India
The cement industry has witnessed substantial reorganization of capacities during the
last couple of years. Some examples of the consolidation witnessed during the recent
past include: Gujarat Ambuja taking a stake of 14% in ACC; Gujarat Ambuja taking
over DLF Cements and Modi Cement; India Cement taking over Raasi Cement and Sri
Vishnu Cement; Grasim's acquisition of the cement business of L&T; Indian Rayon's
cement division merging with Grasim; Grasim taking over Sri Dig Vijay Cements;
L&T taking over Narmada Cements; ACC taking over IDCOL.
Cement has been one of the most important areas of operations for the Indian private
sector. Unlike much of heavy industry and utilities, cement was not deemed to be the
exclusive preserve of the State sector in the post-independence development strategy.
Cement was also the industry of choice of many corporate diversifying away from the
troubled traditional areas of jute and textiles.
Over the years, the share of the public sector in cement production has declined. While
the private sector (large companies) accounts for around 95% of the total installed
capacity, the share of public sector companies has declined from a level of 11% in
FY1996 to around 4.4% in FY2006. The share in production of the public sector
companies is even lower at 1.2% in FY2006 as compared to 6.5% in FY1996.
The cement industry accounts for approximately 1.3% of GDP and employs over 0.14
million people. It is a significant contributor to the revenue collected by both the central
and state governments through excise and sales taxes. For example, central excise
collections from cement industry aggregated Rs. 45.23 billion in FY2005 and accounted
for 4.3% of total excise revenue collected by the government. Cement has consistently
figured among the top 5-7 commodities. It is a heavily taxed commodity and the duties
amount to around 30% of the selling price of cement.
India is the second largest producer of cement in the world. In 2005, India produced
142 mt of cement, accounting for 6.4% of global production of 2.22 billion tonnes.
India is the second largest producer-behind China (1,000 mt), but ahead of the US (99
mt) and Japan (66 mt). India's cement industry-both installed capacity and actual
production-has grown significantly over the past three decades, with production
increasing at an average rate of 8.1% per year between 1981 and 2004-05.
In recent years, the cement sector has accounted for a declining share of gross bank
credit (GBC) of scheduled commercial banks (SCBs), largely because of decline in
credit during FY2004. With GBC of Rs. 61.12 billion in March 2005, the cement
industry accounted for 1.67% of industry GBC of SCBs in March 2005, as compared
with 1.81% in March 2000.
The Indian cement industry exported around 6 mt of cement during FY2006,
accounting for around 4% of the total production. There has been a significant year on
year variation in the export trend, implying that Companies rely on cement exports to
balance out the domestic demand supply situation.

23. 23
Because of increased overseas demand, cement exports increased from 4.07 mt in
FY2005 to 6.01 mt during FY2006. However, increased domestic demand resulted in
clinker exports declining from 5.99 mt to 3.18 mt.
Figure 1.19 showing the export of Cement
As cement is a low value, high bulk commodity, freight cost becomes a significant
factor in determining the landed cost of cement. This has resulted in a very low volume
of international trade in cement. World cement trade has averaged just around 6-7% of
the total production.
Although, world trade in cement is limited because of high freight costs, there are
countries, which either import a significant share of their total consumption or export a
major share of their total production. Countries, which import a significant share of
their consumption, appear to be falling in the developing world category, where the
public expenditure on infrastructure projects is very high. The Middle East countries
(although not falling in the developing world category) have huge requirements of
cement because of construction work in projects in the oil sector. Also in these
countries, unfavorable conditions (for example, inadequate cement limestone reserves)
have discouraged cement capacity creation.
Countries, which export a large share of their domestic production, appear to be having
one thing in common. Countries with high export thrust opt for bulk transportation for
exporting cement. For example, by opting for bulk transportation, Greece is in a
position to export over 50% of its cement production. Bulk transportation leads to
significant advantages such as savings in freight costs and packing costs, avoidance of
transit loss, adulteration, pilferage, bursting of bags and damage to cement.
Textile Industry in India

24. 24
The cotton textiles industry has a large importance to the economy in terms of
employment, contribution to the government exchequer and foreign exchange earnings.
The textiles industry accounts for around 14% of India’s industrial production, 4% of
GDP, and 16% of its total merchandise exports. Besides, it provides direct employment
to around 35 million people. Cotton is the most important fibre of the Indian textiles
industry, accounting for around 57% of the domestic fibre consumption and 90% of its
exports. Further, substantial production is from the small-scale sector, whereby the
industry wealth is distributed in greater number of people.
The past two decades have also witnessed a significant growth in the exports of textile
goods and readymade garments from India. However, even now, India has a mere 3.3%
share of the global trade of US$450 billion in textiles and clothing; the figure for India
was as low as 1.8% in 1980. Exports of textiles and textiles products witnessed an
acceleration during April 2005-January 2006 (10MFY2006), led by strong demand in
the major markets of the US and Europe. Exports increased 22.2% (year on year or yoy)
to US$13.06 billion during April 2005-January 2006.
Figure 1.20 Showing the India’s Exports of Textiles and Textiles Products and Share of Total Exports
The failure to provide quality value-added fabrics and garments and the near absence of
contemporary designing facilities as also quota constraints are some of the major causes
for India producing low value added yarns and fabrics, even as other countries have
moved up the value chain.
The Indian textile and clothing market is estimated to be Rs. 2.15 trillion during 2004.
While the domestic market accounts for 61%, the technical textiles accounts for around
9%. The balance 30% is exported in the international market. The ratio of usage of
cotton to man-made fibers/filament yarn was around 56:44 in FY2005.
The manmade fiber (MMF) industry comprises fiber and filament yarn manufacturing
units of cellulosic and non-cellulosic origin. The value added by manmade fibers
(MMF) sector accounts for around Rs. 55 billion or 0.2% of GDP. The sector
contributes excise duties of around Rs. 23 billion to the exchequer, which is around
3.5% of the total excise duties. The total assets in the sector are estimated to be around
Rs.100 billion. In the last downturn, some companies were also referred to the Board of
Industrial and Financial Reconstruction (BIFR). The MMF sector is also a ‘critical

25. 25
enabler’ of a large export earner—the textiles industry. Further, the downstream textiles
industry also provides large-scale employment. As of end-September 2005, the
employment in the cotton/MMF textile industry was 0.95 million.
In the cotton dominated Indian textile industry, manmade fibres account for an around
44% share as against 50% globally. However, in FY2005, with large volumes of cotton
being exported in various forms of textiles and apparel (accounting for nearly 43% of
the domestic cotton production), the share of manmade fibres in the domestic textiles
market stood at over 50%.
Figure 1.21 Showing India’s Manmade Fibre, Yarn, Fabrics, and Madeups and Share of Total Exports
Another part of textile industry is wool and man made staple fabrics which plays an
important role in India’s total export Figure 1.21 shows the export of wool and man
made staple fabrics.
Export of Wool and Man-Made Staple Fabrics
500,000
400,000
300,000
Qty in Thousands
200,000
Wool
100,000
Man-Made Staple Fabrics
0
2003 2004 2005 2006
upto
Sep.
Year
Figure 1.22 Showing the export of wool and man-made staples from India
Iron and Steel Industry in India

26. 26
The Indian steel sector was the first core sector to be completely removed from the
licensing regime as well as pricing and distribution controls. This was done primarily
because of the inherent strengths and capabilities demonstrated by the Indian iron and
steel industry. The growth rate in 1995-96 was a phenomenal 20%. During 1996-97,
finished steel production shot up to a record 22.72 million tonnes with a growth rate of
6.2%, while in 1997-98, the finished steel production increased to 23.37 million tonnes,
which was 2.8% more than the production of the preceding year. The growth rate
decreased drastically in 1997-98 and 1998-99 being 2.8% and 1.9% respectively. The
growth rate in 2001-2002 was 4.29% with the total production touching 31.63 million
tonnes. The production of finished steel during April –December, 2002 has been 23.83
million tonnes, which is 6.3% higher than the production during the corresponding
period of 2001-02.
The general policy and procedures for export and import of iron and steel, ferro alloys
and ferro scrap are at present decided by the Ministry of Commerce in consultation with
the Ministry of Steel. In a momentous move to push exports aggressively, Government
of India has announced several measures in the new Five-year Exim policy (2002-07),
which is in effect from 1st April 2002. These include the removal of quantitative
restrictions on exports save in respect of a few sensitive items; permission for setting up
overseas banking units in Special Economic Zones (SEZ); retention of duty-
neutralization instruments including Duty Entitlement Pass Book (DEPB) and other
export promotion schemes.
Export of Iron and Steel in the FY 2005 was decline by 0.34% as compared with last
year figure 1.22 shows the following.
Iron and Steel
7,000,000
Volume Qty. in thousand
6,000,000
5,000,000
4,000,000
Iron and Steel
3,000,000
2,000,000
1,000,000
0
2003 2004 2005 2006 upto
Sep.
Year
Figure 1.23 showing the export of iron and steel from India
Aluminum & Copper Industry in India

27. 27
The Indian Aluminum Industry has a moderate importance in the Indian Economy.
While it has a number of applications across several sectors (such as power,
automobiles, packaging, construction etc.) Its turnover is just around Rs. 120 billion
(0.35% of GDP). In the trade term, export of aluminum and articles thereof aggregated
Rs. 22.95 billion in FY2005, accounting for 0.6% of India’s Exports. Import aggregated
Rs. 20.65billion during FY2005, accounting for 0.4% of India’s imports.
India accounts for less than 3% of the global capacity for aluminum, and thus has
limited influence on aluminum prices on the London Metal Exchange (LME). However,
prices on the LME do have an effect on domestic prices, since, on the one hand, they
determine the margin of Indian exporters and, on the other, influence the landed prices
of imported metal. However the correlation is limited because of the duty a protection
against imports and the low cost structure of Indian aluminum producers.
Global aluminum production increased by 3.7% during 2005 to 23.4% mt. By
comparison, production increased at a 3-year compound average growth rate (CAGR)
of 3.4% during 2003-05, World aluminum production is expected to increase 4% during
2006, because of smelter capacity expansion in china and the Middle East.
The Indian Copper Industry has a moderate importance in the Indian Economy. While it
has a number of application across several sectors (such as telecom, power,
construction, transportation, handicraft, Engineering, Consumer durables, defense etc.).
Figure 1.23 shows the export of Aluminum and copper during the period of 2003-06.
Aluminum & Copper
400,000
Volume Qty. in thousand
350,000
300,000
250,000
200,000
150,000
100,000
50,000
0
2003 2004 2005 2006 upto Sep.
Year
Figure 1.24 showing the export of aluminum and copper
Machinery Industry in India

28. 28
The performance of heavy engineering sector is directly linked to the industry, which in
turn depends on the performance of the overall economy. Industry, being the key end
user, drives the performance of this sector. In the FY2002 the performance of the heavy
engineering industry was affected due to an economic downswing, but sustained
improved performance of the overall economy from FY2003 onwards has resulted in an
upswing for this sector. The industrial performance has been even better in the FY2005
and the Index of Industrial Production is expected to increase by 7.6% this year, while
the growth was 7.0% for FY2004. The revival of the economy and increase in demand
has resulted in major capacity expansions to match the growing demand across all the
sectors.
Heavy engineering companies that serve only the domestic market are sensitive to the
performance of Indian economy, while exports lead to diversification of the end-user
market.
Indian companies have cost-advantage in production of heavy machinery and
equipment, which result in significant potential for exports. During 2001-02, heavy
engineering industry was facing a recession and the Index of Production of Capital
Goods witnessed a decline of 3.4%. Low levels of demand forced many of the Indian
heavy engineering companies to look beyond the domestic markets. As a result, the
engineering goods sector has improved its export performance and contributed to
20.37% of total exports from the country during the period April 2004 to January 2005.
The export of Indian machinery industry as shown in figure 1.24.
Machinery
500,000
Volume Qty. in thousand
450,000
400,000
350,000
300,000
Machinery
250,000
200,000
150,000
100,000
50,000
0
2003 2004 2005 2006 upto
Sep.
Year
Figure 1.25 Showing export of Indian machinery industry
Plastic Industry in India

29. 29
India exported nearly US$532 mn worth plastic products during FY2004 (1st half
FY2005 exports US $ 295 mn). With substantial capacity additions leading to over-
capacity in domestic markets during FY2001 and beyond, polymer exports have
increased significantly. However, on account of lower competitiveness of the plastic
products industry, polymers have been exported directly.
Figure 1.26 Showing the trend in export of Plastic products
Amongst various plastic products—films, plates and sheets accounted for largest share
of over 40% during FY2004 (refer following figure). Plastic products for packaging
(apart from films etc.) accounted for a share of 27% which includes woven sacks that
accounted for 13% of the total plastic product exports.
Though Indian exports of plastic products have increased over the past decade, Indian
exports of plastic products, however, still continue to account for a minuscule share in

30. 30
the world trade (only around 0.47%). The low presence of the organized large-scale
sector and consequently, low economies of scale prevent Indian players from becoming
cost competitive in the international market.

31. 31
Organic and In-organic Chemical Industry in India
Inorganic chemicals are mostly used in detergents, glass, soap, fertilizer and alkalis
India’s inorganic chemicals industry is one of the fastest growing sectors, with an
average growth rate of 9 per cent per annum during the last decade.
Organic chemicals cover a wide range items such as methanol, formaldehyde, acetic
acid, phenol, acetone etc. The organic chemicals industry in India is also concentrated
mostly in western India.
Export of Organic and In-Organic Che micals
6,000
5,000
4,000
Organic Chemical
V alue in US $
3,000
M illion Inorganic Chemicals
2,000
1,000
0
2003 2004 2005 2006
Ye ar
Figure 1.28 is showing the export of organic and in-organic chemicals from India
Export of Organic and In organic chemicals
2,000,000
1,500,000
Organic
Volume Qty in
1,000,000
thousa nd In- organic Chemicals
500,000
0
2003 2004 2005 2006
Ye a r
Figure 1.29 is showing the export of organic and in-organic chemicals in volume

32. 32
Fertilizers Industry in India
A pesticide is any substance or mixture of substances intended for preventing,
destroying, repelling, or mitigating any pest. The pesticides (of which insecticides
constitute an important segment) or the agrochemicals industry (hereinafter referred to
as the PAC industry) primarily consists of insecticides, herbicides and fungicides.
The global market for chemical pesticides/agrochemicals was estimated at around
US$26.71 billion in 2003. Herbicides comprised 44% of the world market, followed by
insecticides (27%), fungicides (20%), and others (9%). The market increased by 6.2%
during 2003. In the period since 1990, the world market has increased from US$23.17
billion, at an annual average of 1.1%.As shown in figure 1.26
Figure 1.30 shows the world’s market in pesticides
The increased exports of pesticides in recent years is primarily because of the reduction
in pesticide production in developed countries, and the shift in pesticide production
from the developed countries to developing countries.
India is one of the largest producers of pesticides in Asia. Total world pesticide exports
from all countries increased from US$10.27 billion in 2002 to US$12.42 billion in
2003, caused by higher pesticide usage. Amongst the developing countries, India is the
second-largest exporter of pesticides, behind China. India accounted for 3% of the
world export of pesticides in 2003, as compared with 5.9% for China. In terms of
market share of exports of various pesticide products, Indian exports of insecticides
aggregated US$313 million during 2003, accounting for 10.4% of total worldwide
insecticide exports of US$3,011 million. India’s share has declined from 11.4% during
2002.

33. 33
Pharmaceutical Industry in India
The Indian Pharmaceutical Industry today is in the front rank of India’s science-
based industries with wide ranging capabilities in the complex field of drug
manufacture and technology. A highly organized sector, the Indian Pharma Industry
is estimated to be worth $ 4.5 billion, growing at about 8 to 9 percent annually. It
ranks very high in the third world, in terms of technology, quality and range of
medicines manufactured. From simple headache pills to sophisticated antibiotics
and complex cardiac compounds, almost every type of medicine is now made
indigenously
The Indian Pharmaceutical sector is highly fragmented with more than 20,000
registered units. It has expanded drastically in the last two decades. The leading 250
pharmaceutical companies control 70% of the market with market leader holding
nearly 7% of the market share. It is an extremely fragmented market with severe
price competition and government price control.
The pharmaceutical industry in India meets around 70% of the country's demand for
bulk drugs, drug intermediates, pharmaceutical formulations, chemicals, tablets,
capsules, orals and inventible. There are about 250 large units and about 8000 Small
Scale Units, which form the core of the pharmaceutical industry in India (including
5 Central Public Sector Units). These units produce the complete range of
pharmaceutical formulations, i.e., medicines ready for consumption by patients and
about 350 bulk drugs, i.e., chemicals having therapeutic value and used for
production of pharmaceutical formulations.
Pharmaceutical
Volume Qty in Thousand
4,000.00
3,500.00
3,000.00
2,500.00
2,000.00 Pharmaceutical
1,500.00
1,000.00
500.00
0.00
2003-04 2004-05 2005-06 2006 up to
Sep.
Year
Figure 1.31 Showing the Export of Pharma Products

34. 34
Cosmetic Industry in India
Many of the world’s popular cosmetics brands entered the Indian market in the 1990s
as the Indian market opened up to foreign companies. The cosmetics and personal care
industry has been growing at an average rate of 15-20 percent for the last few years.
Growth has come mainly from the low and medium-priced categories, which account
for 90 percent of the cosmetics market in terms of volume. Even though mass-market
products still constitute the major portion of the India cosmetics and toiletries market,
increased disposable income has led to growth in demand for premium products. The
urban population in particular, with its rising purchasing power, is the main force that
drives the demand for various cosmetic products in India.
The reasons for the growing demand for cosmetic products in India also include: greater
access to television, which has created a growing awareness of the western world;
increased advertising in general; and greater product choice and availability. The
success of contestants from India at various well known international beauty pageants
in the last few years has also contributed to making Indian women more conscious of
their appearance and more aware of western cosmetic products and brands. Also, a
boom in the Indian fashion world has contributed to the rise in demand for professional
beauty care products.
Even with double-digit growth rates, the market penetration of cosmetics and toiletries
products in India is very low. Current per capita expenditure on cosmetics is
approximately $0.68 cents, as compared to $36.65 in other Asian countries. This low
market penetration for cosmetics and personal care products in India can be viewed as
an opportunity for more significant growth down the road in this country of 1 billion
people.
The current size of India’s cosmetic and toiletries market is about $950 million. The
fastest growing segment is color cosmetics, accounting for around $60 million of the
total market. Nail enamels and lipstick account for about round 65 percent of the color
cosmetic segment. Revlon and L’Oreal dominate the small premium lipsticks and nail
enamels niches. Lipstick sales account for nearly a third of the market at $21 million,
while the market for nail enamels is about $23 million. Lakme, a brand originally
introduced by the Tata Group of India, but now owned by Hindustan Lever (HLL) of
the Unilever group, Tips & Toes, and Revlon dominate the color cosmetics market.
The color cosmetics segment is very competitive and has a high penetration level,
compared to other market segments.
The toiletries market segment in India is well developed and dominated by
multinational companies and a few large Indian companies. This segment is also
characterized by high entry barriers, a high rate of new product launches, and high
advertising expenditures. Bath and shower products account for the largest share of the
toiletries market segment. The toiletries segment can be divided into two categories:
the less price sensitive niche and highly brand conscious, premium niche. The price
sensitive niche caters to the middle and lower middle class and the premium niche
caters to the urban and higher class.

35. 35
Export: Cosmetic Industy
120,000
100,000
80,000
Qty in Thousand 60,000
40,000
20,000
0
2003 2004 2005 2006 2007 2008 2009
Forecasted
Year
Figure 1.32 Showing the export of cosmetic industry
Export: Cosmetic Industry
700
600
500
Value in US $ 400
Million 300
200
100
0
2003 2004 2005 2006 2007 2008 2009
Forecasted
Year
Figure 1.33 showing the export of cosmetic industry in value
Export of Cosmetic Industry is growing continuously in volume since FY2003, but in
value it was a little shift in the FY2004 but in FY2005 it jumped and increase by $ 40
million in table d.
Year Value (US$ Million)
2003 317.57
2004 296.77
2005 436.03
2006 459.34
2007 518.57
2008 599.86
2009 641.13
Table D: Showing the YoY growth in value of cosmetic industry

36. 36
Electronic Goods Industry in India
The Electronics industry has emerged as the fastest growing segment of the Indian
industry both in terms of production and exports. This growth has had significant
economic and social impacts. Today the local and global impact of the electronics
industry has been due to its modern incarnation viz., the Information Technology (IT)
Industry. By definition the IT industry includes the hardware “backbone” from the
electronics industry and software.
The consumer durables industry appears to have two clearly differentiated segments.
The MNCs have an edge over their Indian counterparts in terms of technology
combined with a steady flow of capital. The domestic companies compete on the basis
of their well-acknowledged brands, an extensive distribution network and an insight
into local market conditions.
Demand is Cyclical and seasonal. Demand is high during festive season and is
generally dependent on good monsoons. Purchase necessarily is done only during the
harvest, festive and wedding seasons — April to June and October to November in
North India and October to February in the South.
Rural India, which accounts for nearly 70% of the total number of households, offers
plenty of scope and opportunities for the white goods industry. The urban consumer
durable market for products including TV is growing annually by 7 to 10 % whereas the
rural market is zooming ahead at around 25 % annually.
Increasing consumer awareness and preference for new models have added to the
demand. Products like air conditioners are no longer perceived as luxury products but
are treated as necessities in the changed socio-economic environment with changed life
styles.
Export:Electronic Goods Industry
2009
2008
2007
Year
2006
2005
2004
2003
0 500,000 1,000,0001,500,0002,000,0002,500,0003,000,0003,500,0004,000,0004,500,000
Qty in thousand
Forecasted
Figure 1.34 Showing the Export of Electronic Goods Industry in volume

37. 37
Figure 1.29 shows the export of electronic industry, in last few years’ electronic goods
and consumer durables industry has shown a great increase in export, because
companies like Sansui, Samsung, Whirlpool, LG has set up there manufacturing plant
in India and they are exporting these good from India to the neighboring countries and
other western countries. This shows that this growth rate will continue due to great
participation of real estate industry. Same as in table f we can see the increasing value
of electronic goods industry.
Table f: Showing the Export of Electronic Goods Industry in Value
Year Value (US$ Million) Growth rate%
1,899.06 -
2003
2,071.68 8.33
2004
2,767.55 25.14
2005
3,114.59 11.14
2006
3,694.18 15.69
2007
4,118.73 10.31
2008
4,646.65 11.36
2009
The sectors which have recorded excellent growth rates of more than 20 per cent in
terms of quantity produced are Air Conditioners (25 per cent), Split Air Conditioners
(42.6 per cent) Micro Wave Woven (27.3 per cent), DVDS (25 per cent) VCD/MP3
(20per cent), Color Picture Tube (23 per cent,).
The sectors which have recorded high growth rates between 18 and 28 per cent in
April-March 2004-05 over the corresponding previous period are Color Television
(12%), Window Air Conditioners (18.8 per cent ), Washing Machines (18.1 per cent
Watch (10%), Frost Free Refrigerators (13.8%).
 Some sectors which have recorded moderate growth of 0 to 10 per cent are
refrigerators (5 per cent),), clock (8 per cent), Direct Cool Refrigerator (2.8 per
cent).
 The sector recording negative growth is B&W TV (- 16.7%), The Refrigeration
Industry has reached 3.9 million units in 2004-05 from 3.7 million units in the
last year with a growth of 5 per cent.
 The Air-Conditioners Industry has reached at 1.2 million units during 2004-05
with a growth of 25 per cent from 9.8 lakh units in 2003-04.
 Washing Machines is estimated to have grown by 18.1 per cent from 1.35
million units in 2003-04 to 1.6 million units in 2004-05.
 Microwave oven has grown by 27.3 per cent growth with 3.5 lakh units
compared to 2.75 lakh units in 2003-04.
 The Indian Color Television industry has grown by 12.1 per cent in 2004-05 by
reaching 9.25 million units in 2004-05 from 8.25 million units in 2003-04. The
B&W TV has recorded a negative growth of 16.7 per cent from 3 million units
in2003-04 to 2.5 million units in 2004-05.

38. 38
 Watch and clock have registered growth of 10 per cent and 8 per cent from 20.6
mn units and 26.3 million units in 2003-04 to 22.6 mn units and 28.4 mn units
in 2004-05. The VCD/MP3 industry has registered 20% growth and has
achieved production of 8.4 million units.
 The unorganized sector has occupied a major share in manufacturing and
supplying VCD/MP3. DVD Players have grown by 25 per cent in 2004-05 with
the volume estimated to be 625000 units.

39. 39
Findings
 Major part of India’s export goes to USA followed by United Arab Emirate and
China and this study shows this will also in the future as shown in figure 1.30.
Export: Country-wise
JAPAN
ITALY
BELGIUM
GERMANY
2008
UK
2007
2006
HONG KONG
2005
2004
SINGAPORE
CHINA
UAE
USA
0.00 5000.00 10000.00 15000.00 20000.00 25000.00
Figure 1.35 Showing the Export of India country-wise in Value in US $ Million
 India’s Tea and Coffee industry has largest share in world’s export in its
category, but then also it is losing its share during last few years and this
fluctuation will also continue over the year. Tea and coffee industry depends on
the monsoon and over the last few years the global warming has affected the
monsoon and this may affect to the production of tea and coffee.
Volume of Tea and Coffee
800,000
700,000
600,000
500,000
Qty in Thousands 400,000
300,000
200,000
100,000
0
2003 2004 2005 2006 2007 2008 2009
upto
Sep.
Year
Figure 1.36 Showing the export of Tea and coffee industry

40. 40
 Sugar Industry has seen great variation in both export and import, in India
maximum sugar is produce in area of Uttar Pradesh and GOI has ban the export
of sugar due to rise in price of sugar in world market and not having enough
stock to meet the domestic consumption . This ban has its limitation up to
march 2007, but ban does not include EU and USA.
 Tobacco is grown in more than 100 countries, just four countries (Brazil, China,
India and the United States) account for two-thirds of total global production
and only two countries, Malawi and Zimbabwe, are significantly dependent on
export earnings from tobacco.1 Out of the 141 countries that export tobacco,
only 18 derive more than one percent of their total export earnings from
tobacco. In only four of those 18 countries do tobacco exports account for more
than five percent of total export earnings. India is second largest export of the
world and holds round 6.5% of total export of tobacco of the world.
 Beverage industry’s export of India is growing with the rate of 13-16% p.a. as
shown in the table b. Both in the term of volume and value it is becoming the
important to the Indian economy.
 The export of leather industry is varying in volume, but in the value term it is
increasing in a constant manner and volume-wise it will fluctuate in the future
also.
Export of Leather from India
300,000
250,000
200,000
Qty in thousand 150,000
100,000
50,000
0
2003 2004 2005 2006 2007 2008 2009
upto
Sep.
Year
 Future growth in gold jewellery business is likely to driven by increased exports
to US and other markets, and domestic consumption. Although domestic
consumption has increased in 2003-05, consumption per capita is still very low,
reflecting the high proportion of the rural population and the social
infrastructure of the country (the rural population accounts for approximately
65-70% of domestic gold demand).

41. 41
 As cement is a low value, high bulk commodity, freight cost becomes a
significant factor in determining the landed cost of cement. This has resulted in
a very low volume of international trade in cement. World cement trade has
averaged just around 6-7% of the total production.
Countries, which export a large share of their domestic production, appear to be
having one thing in common. Countries with high export thrust opt for bulk
transportation for exporting cement. For example, by opting for bulk
transportation, Greece is in a position to export over 50% of its cement
production. Bulk transportation leads to significant advantages such as savings
in freight costs and packing costs, avoidance of transit loss, adulteration,
pilferage, bursting of bags and damage to cement.
 In the cotton dominated Indian textile industry, manmade fibres account for an
around 44% share as against 50% globally. However, in FY2005, with large
volumes of cotton being exported in various forms of textiles and apparel
(accounting for nearly 43% of the domestic cotton production), the share of
manmade fibers in the domestic textiles market stood at over 50%.As shown in
the chart below.
 Export of Iron and Steel in the FY 2005 was decline by 0.34% as compared
with last year; The Indian Copper Industry has a moderate importance in the
Indian Economy. While it has a number of application across several sectors
(such as telecom, power, construction, transportation, handicraft, Engineering,
Consumer durables, defense etc.)
 Indian companies have cost-advantage in production of heavy machinery and
equipment, which result in significant potential for exports. During 2001-02,
heavy engineering industry was facing a recession and the Index of Production
of Capital Goods witnessed a decline of 3.4%. Low levels of demand forced
many of the Indian heavy engineering companies to look beyond the domestic
markets. As a result, the engineering goods sector has improved its export
performance and contributed to 20.37% of total exports from the country during
the period April 2004 to January 2005.

42. 42
 Indian exports of plastic products have increased over the past decade, Indian
exports of plastic products, however, still continue to account for a minuscule
share in the world trade (only around 0.47%). The low presence of the
organized large-scale sector and consequently, low economies of scale prevent
Indian players from becoming cost competitive in the international market.
 The increased exports of pesticides in recent years is primarily because of the
reduction in pesticide production in developed countries, and the shift in
pesticide production from the developed countries to developing countries.
 The pharmaceutical industry in India meets around 70% of the country's
demand for bulk drugs, drug intermediates, pharmaceutical formulations,
chemicals, tablets, capsules, orals and inventible. There are about 250 large
units and about 8000 Small Scale Units, which form the core of the
pharmaceutical industry in India (including 5 Central Public Sector Units).
Indian Pharmaceutical industry has shown a high increase in export YoYas
shown in figure 1.27.
 Export of Cosmetic Industry is growing continuously in volume since FY2003,
but in value it was a little shift in the FY2004 but in FY2005 it jumped and
increase by $ 40 million.
 Rural India, which accounts for nearly 70% of the total number of households,
offers plenty of scope and opportunities for the white goods industry. The urban
consumer durable market for products including TV is growing annually by 7 to
10 % whereas the rural market is zooming ahead at around 25 % annually.

43. 43
Bibliography
♦ A book on Indian Trade and Industry Classification, by Kumar and Garg.
Published by BDP, Publishing year 2003
♦ Hand book of the year 2003-2004, Reserve Bank of India, Study of Indian
economy and foreign trade.
♦ http://strategis.ic.gc.ca/epic/site/imr-ri.nsf/en/gr126985e.html,
www.strategis.ic.gc.ca
♦ National Stock Exchange, www.nseindia.com/members/directory/htm
♦ Bombay Stock Exchange, www.bseindia.com/directory/turnover/2003.nic
♦ www.dgft.delhi.nic.in
♦ www.indiamart.com
♦ www.jimtrade.com
♦ www.dgciskol.nic.in
♦ www.tradeinfo.com
♦ Center for Monitoring Indian Economy (CMIE), Andheri (East), Mumbai
♦ www.icra.in
♦ Balance of Payments Release of Dec. 29, 2006 and Statement 43, India’s
Balance of Payments in Dollars, Monthly Bulletin, Reserve Bank of India,
December 2006 and previous issues, www.rbi.org/monthlybulletin/bop
♦ Monthly Foreign Trade Statistics of India (principal commodities & countries),
Imports and Exports & Re–exports, Directorate General of Commercial
Intelligence & Statistics, Government of India, September 2006,
www.dgcis.kol.nic

44. 44
Tables
Table 1: Export of India Country-wise in US $ Million for the year 2003-2004 to
2004-2005 with there share in the total export of the country and growth rate.
2003-200 2004-200
S.No. Country %Share %Share %Growth
4 5
1 USA 11,490.11 17.9975 13,765.75 16.4788 19.81
2 U ARAB EMTS 5,125.61 8.0285 7,347.88 8.7961 43.36
3 CHINA P RP 2,955.10 4.6287 5,615.88 6.7227 90.04
4 SINGAPORE 2,124.84 3.3282 4,000.61 4.7891 88.28
5 HONG KONG 3,261.83 5.1091 3,691.82 4.4194 13.18
6 UK 3,023.27 4.7355 3,681.09 4.4066 21.76
7 GERMANY 2,544.57 3.9857 2,826.25 3.3833 11.07
8 BELGIUM 1,805.73 2.8284 2,509.71 3.0043 38.99
9 ITALY 1,729.41 2.7089 2,285.99 2.7365 32.18
10 JAPAN 1,709.30 2.6773 2,127.91 2.5473 24.49
11 FRANCE 1,280.89 2.0063 1,680.94 2.0122 31.23
12 BANGLADESH PR 1,740.75 2.7266 1,631.12 1.9526 -6.3
13 NETHERLAND 1,289.12 2.0192 1,604.86 1.9212 24.49
14 SRI LANKA DSR 1,319.20 2.0663 1,413.18 1.6917 7.12
15 SAUDI ARAB 1,123.31 1.7595 1,412.06 1.6904 25.71
16 SPAIN 1,002.59 1.5704 1,389.37 1.6632 38.58
17 INDONESIA 1,127.21 1.7656 1,332.60 1.5952 18.22
18 IRAN 918.11 1.4381 1,231.39 1.4741 34.12
19 MALAYSIA 892.77 1.3984 1,084.06 1.2977 21.43
20 KOREA RP 764.86 1.198 1,041.68 1.247 36.19
21 ISRAEL 723.98 1.134 1,005.76 1.204 38.92
22 SOUTH AFRICA 539.35 0.8448 984.04 1.178 82.45
23 THAILAND 831.69 1.3027 901.39 1.079 8.38
24 CANADA 763.2 1.1954 866.8 1.0376 13.57
25 NEPAL 669.36 1.0484 743.14 0.8896 11.02
26 TURKEY 563.34 0.8824 723.7 0.8663 28.47
27 AUSTRALIA 584.3 0.9152 720.25 0.8622 23.27
28 BRAZIL 275.62 0.4317 678.17 0.8118 146.05
29 NIGERIA 565.49 0.8858 644.68 0.7717 14
30 RUSSIA 713.76 1.118 631.26 0.7557 -11.56
31 TAIWAN 532.45 0.834 618.51 0.7404 16.16
32 VIETNAM SOC REP 410.44 0.6429 555.96 0.6655 35.46
33 SWITZERLAND 449.87 0.7046 540.89 0.6475 20.23
34 PAKISTAN IR 286.94 0.4494 521.05 0.6237 81.59
35 EGYPT A RP 367.49 0.5756 444.73 0.5324 21.02
36 KENYA 229.48 0.3594 426.64 0.5107 85.91
37 KUWAIT 319.09 0.4998 421.44 0.5045 32.07
38 PHILIPPINES 321.53 0.5036 412.23 0.4935 28.21
39 UNSPECIFIED 209.38 0.328 373.82 0.4475 78.54
40 MEXICO 264.43 0.4142 368.58 0.4412 39.39
41 COLOMBIA 95.31 0.1493 330.71 0.3959 246.97
42 SUDAN 107.38 0.1682 317.45 0.38 195.64
43 GREECE 200.04 0.3133 306.34 0.3667 53.14
44 DENMARK 241.9 0.3789 305.74 0.366 26.39