Presentation on International Trade

Submitted To: Dr. Nilanjan Sengupta

Group No 6 Pankaj Kumar Bothra (53)

Prashant Sen (56)

Priyanka Sharma (59) Priyojeet Kumar (61) Puja Kumari Jha (62) Rajnish Kumar (65)

CURRENT SCENARIO OF WORLD TRADE

Recovery of World Economy has been stalled due to Euro Crisis and slowdown of U.S Economy. Re-emergence of Recession-ridden years of 2008-09 in the form of steep fall in world trade vis--vis decline in real GDP. World Trade value yet to recover to its peak of US $ 16Trillion-Currently standing at 6.90% in compare previous year in terms of volume.

TRADE CREDIT- SCENARIO

INTERNATIONAL SCENARIO-Latest Survey by Institute of International Finance (IIF) put forth the fact that in emerging economies tight bank-lending conditions is followed. Overall Bank lending condition dipped to weakest ever level in Q3 2011. Unstable Financial condition-Mood is weaker in Europe, Latin America. Asia ,Africa and Middle East showing sign of Improvement. INDIAN SCENARIO-Inflow for short term trade credit is continuously increasing even though net inflow was marginally low.

REPORT ON INDIAS MERCHANDISING TRADE

5-7 times increase both in Export as well as Import trade in comparison to last decade i.e., 1990-91 to 2000-01. Surpassed Pre-Crisis trends in Export Growth during 2010-11. Indias share in global Export-Import increased to 1.5 & 2 per cent respectively thereby improving Indias Ranking in World Market in terms of Trade.

Contd.
Impact of Euro Zone Crisis was to be seen during Q2&Q3 2011 in terms of falling Exports month after month. Few Contributing Sectors from Exports Petroleum and Oil products, Gem & Jewellery,Engineering,etc. Merchandise Import recovered with growth of 28.20% in 2010-11 with major contribution that of POL as well as non-POL segment due to its price increases.

Contd..
Trade Deficit increased by 40.40% to US $148.7 Billion in the same period of Apr-Jan 2010-11 to 2011-12. Low export growth and moderate import growth led to the high trade deficit in 2011-12 (April-January) thereby raising alarm of a possible unmanageable current account deficit.

TRADE COMPOSITION IN INDIA

EXPORT COMPOSITION (Segment) Major Contributors Petroleum crude and Products, Manufactures (Electronics) and Primary Products , Chemical & related products, textiles. Major Losers Labour Intensive manufactures like Textiles, Leather and Leather manufactures and Handicrafts. EXPORT COMPOSITION (Location wise) has been more to EU then USA.

CONTD
Need to Diversify Export items-India has global export share of 1% or more in 48 out of a total of 99 commodities at the two-digit harmonized system (HS) level. Increase in Import of Gold and Silver, POL whereas decrease in import of Capital Goods. Indias new largest trading Partner UAE , China replacing USA. It is One of the Highest trade deficit country as %age of GDP at 5.7% in 2010

 Focus on improving bilateral balance of trade with country such as China, Switzerland. World trade in export of Commercial services amounts to US $3.7 trillion dominated by developed western countries in terms of share except for China, India, Singapore which are also included in list of top traders of services.

World trade in services

Western nations like US and EU have major share in export of commercial services with the exception of India, china and sigapore. But, the growth rate of Asian countries better than western nations. Three broad categories of commercial services are transport, travel and other commercial services. The growth rate of western economies in all three services have declined rapidly ,and the Asian economies have grown rapidly.

INDIAS SERVICE TRADE

Indias service export grown at the rate of 23.4 % during the period of 2001-10. But, in recent time the growth rate have declined because the target markets like Europe and south west Asian nations were facing economic crisis. If we talk about service import, it have remained at moderate level except for travel services(39.7 % growth)

Indias balance of trade in services

A consistent increase in surplus on account of Indias services exports has been a cushioning factor for financing a large part of the trade deficit on the merchandise account in recent years. But,the crisis in the euro zone and slowdown in the US economy have affected this cushion, and reminded us of our excessive dependence on service sector.

TRADE POLICY
Recent Trade Policy Measures Budget related Credit related Inflation management related

Continue.
Policy for promoting state-wise trade Special economic zones(SEZs) Trade promotion and other initiatives in north- eastern region Contingency trade policy and non-tariff measures

WTO NEGOTIATIONS AND INDIA

Doha round and concerns of less developed nations. The basic problem was the attack on the monopoly of developed nations. But, due to change in scenario, LDC had came together to fight for their interests.

India s stand on key negotiation issues

Agriculture Non agricultural market access Services Rules Trade-related Aspects of Intellectual Property Rights (TRIPS)

5th trade policy review and Indias stand

The Openness of Indias Trading Regime Gap between Indias Bound and Applied Rates on Agricultural Products Export Incentives FDI Policy Indias IP Policies and Enforcement Government Procurement Sanitary and Phyto-sanitary (SPS) and Technical Barriers to Trade (TBT) measures Export Restrictions

BILETERAL AND REGIONAL COOPERATIONS

India-Japan Comprehensive Economic Partnership Agreement (CEPA) India-Malaysia Comprehensive Economic Cooperation Agreement (CECA) India-ASEAN Trade in Goods Agreement India-New Zealand FTA/ CECA India-Canada CEPA India European Free Trade Association (EFTA) BTIA (Iceland, Norway, Liechtenstein, and Switzerland) India-EU Trade and Investment Agreement Negotiations

INDIAS OUTLOOK
No significant Exposure to Crisis facing countries in Euro Zone in regards to Softwares Export so impact would be less. May show some sluggishness in Software as well tourist arrival business of India.

THANK YOU