Source: PIB, Economic Survey 2018-19
- As per WTO, World trade growth slowed down to 3 per cent in 2018 from 4.6 per cent in 2017. Reasons:
- Introduction of new and retaliatory tariff measures.
- Heightened US-China trade tensions.
- Weaker global economic growth.
- Volatility in financial markets (WTO).
- In Indian rupee terms growth rate of exports increased owing to depreciation of the rupee while that of imports declined in 2018-19.
- Net capital inflows moderated in April-December of 2018-19 despite robust foreign direct investment (FDI) inflows, outweighed by withdrawals under portfolio investment.
- India’s External Debt was US$ 521.1 billion at end-December 2018, 1.6 percent lower than its level at end-March 2018.
- The key external debt indicators reflect that India’s external debt is not unsustainable.
- The total liabilities-to-GDP ratio, inclusive of both debt and non-debt components, has declined from 43 per cent in 2015 to about 38 per cent at end of 2018.
- The share of foreign direct investment has risen and that of net portfolio investment fallen in total liabilities, reflecting a transition to more stable sources of funding the current account deficit.
- The Indian Rupee traded in the range of 65-68 per US$ in 2017-18 but depreciated to a range of 70-74 in 2018-19.
- The income terms of trade, a metric that measures the purchasing power to import, has been on a rising trend, possibly because the growth of crude prices has still not exceeded the growth of India’s export prices.
- The exchange rate in 2018-19 has been more volatile than in the previous year, mainly due to volatility in crude prices, but not much due to net portfolio flows.
- Composition of India’s exports and import basket in 2018-19(P):
- Exports (including re-exports): INR23, 07,663 Cr.
- Imports: INR35, 94,373 Cr.
- Top export items continue to be Petroleum products, precious stones, drug formulations, gold and other precious metals.
- Top import items continue to be Crude petroleum, pearl, precious, semi-precious stones and gold.
- India’s main trading partners continue to be the US, China, Hong Kong, the UAE and Saudi Arabia.
- India has signed 28 bilateral / multilateral trade agreements with various country/group of countries. In 2018-19,
- Exports to these countries stood at US$121.7 billion accounting for 36.9 per cent of India’s total exports.
- Imports from these countries stood at US$266.9 billion accounting for 52.0 per cent of India’s total imports
