India’s International Trade & Investment · PDF fileStructure of Presentation ... FDI Inflows (US$ bn) 34.3 45.1 55.6 60.1 FDI Outflows* ... Bangladesh Vietnam Germany UK Singapore

1

India’s International Trade & Investment

July 2017

22

Structure of Presentation

Indian Economy: A Snapshot

Merchandise Trade: A Perspective

Services Trade: Recent Trends

1

2

3

India’s Investment Flows4

33

India: An Emerging Economic Powerhouse

Strong Economic Fundamentals

World’s 7th largest economy based on nominal GDP in 2016 (1)

o Nominal GDP for 2016: ~US$ 2 trn(1)

World’s 3rd largest economy based on GDP measured in PPP terms in 2016(2)

o GDP in PPP terms for 2016: ~US$ 8.7 trn(1)

Favorable demographic profile: 66% of the population is in the age group of 15 to 64

years(2)

Sovereign rating: Baa3/Positive (Moody’s), BBB-/Stable (S&P), BBB-/Stable (Fitch).

According to the IMF, India’s economy has grown at a strong pace in recent years owing to

the implementation of critical structural reforms, favorable terms of trade, and lower

external vulnerabilities.

Source: (1) IMF World Economic Outlook April 2017.(2) World Bank Database.

44

Indian Economy – Snapshot

Note: # - provisional estimates; * - FDI Outflows include Equity, Loan and Guarantee Issued; FYxx means financial year ended March 31, 20xx.Source: IIF, MOCI, CSO, RBI

PARAMETER FY 2013 FY 2015 FY 2016 FY 2017

GDP (current prices, US$ bn) 1829.0 2042.4 2073.7 2230.8

GDP Growth (constant prices, %) 5.5 7.5 8.0 7.1#

Agriculture & allied activities (% change) 1.5 -0.3 0.7 4.9#

Industry (% change) 3.4 6.9 8.8 5.6#

Services (% change) 8.3 9.5 9.7 7.7#

Inflation rate (CPI, annual avg. %) 10.1 5.8 4.9 3.8

IIP (general, % change) 3.3 4.0 3.4 5.0

Merchandise Trade Balance (US$ bn) -190.3 -137.7 -118.7 -106.2

Services Trade Balance (US$ bn) 64.9 76.5 69.7 67.4

Current Account Balance (US$ bn) -87.8 -26.8 -22.1 -15.2

CAB as percentage of GDP (%) -4.8 -1.3 -1.1 -0.7

External Debt (US$ bn) 409.4 474.7 485.0 471.9

Forex Reserves (US$ bn) (as on end-March) 292.0 341.6 360.2 370.0

FDI Inflows (US$ bn) 34.3 45.1 55.6 60.1

FDI Outflows* (US$ bn) 26.9 30.9 22.0 24.9

Exchange Rate (annual avg., ` /US$) 54.4 61.1 65.5 67.1

55

India’s Merchandise Trade

Increased Global Integration through Trade

300 314 310262 277

491450 448

381 383

-190

-136 -138 -119 -106

FY 13 FY 14 FY 15 FY 16 FY 17

(US

$ b

n)

Export Import Trade Balance

• Decline in global commodity prices and

weak demand resulted in subdued global

trade.

• Trade deficit declined significantly from

US$ 190 bn FY2013 to US$ 106 bn in

FY2017.

• India’s share in global merchandise trade

stood at 1.9% (2016).

Source: MOCI; WTO

66

India’s Major Trading Partners

Top Export Destinations ( FY 2017) Top Import Sources (FY 2017)

India’s largest trading partners in FY2017

2.9%

3.0%

3.1%

3.3%

3.5%

4.5%

5.2%

5.6%

5.8%

16.0%

Australia

Germany

Iraq

Republic of Korea

Indonesia

Switzerland

Saudi Arabia

UAE

U S A

China

Source: MOCI

2.1%

2.4%

2.5%

2.6%

3.1%

3.5%

3.7%

5.1%

11.3%

15.3%

Belgium

Bangladesh

Vietnam

Germany

UK

Singapore

China

Hong Kong

UAE

USA

77

India’s Major Trading Partners

India’s largest trading partners in FY2017

71.564.4

52.7

25.1 22.4 18.7 18.2 16.9 16.8 16.7 14.2 14.1 13.6 12.9 12.8

-51.1

20.2

9.8

-14.8

6.0

-4.2

-16.3 -9.9

-8.3

2.5

-3.7 -8.2

-5.9-8.1

-10.6

Ch

ina

USA

UA

E

Sau

di A

rab

ia

Ho

ng

Ko

ng

Ge

rman

y

Swit

zerl

and

Ind

on

esi

a

Re

pu

blic

of

Ko

rea

Sin

gap

ore

Mal

aysi

a

Au

stra

lia

Jap

an

Iran Iraq

(US$

bn

)

Total Trade Trade Balance

Source: MOCI

88

India’s Trade Basket

Top Export Items (FY 2017) Top Import Items (FY 2017)

* Includes plantation and marine productsSource: MOCI

2.1%

2.3%

7.2%

8.0%

8.4%

11.4%

11.6%

11.9%

13.0%

15.8%

Electronic items

Plastic & rubber articles

Machinery

Base metals

Transport equipments

Petroleum products

Agriculture & alliedproducts*

Chemicals & relatedproducts

Textiles & allied products

Gems & jewellery

3.7%

4.7%

5.6%

5.6%

6.3%

8.6%

8.8%

11.0%

14.1%

22.7%

Plastic and rubber articles

Transport equipment

Base Metals

Ores & Minerals

Agriculture & AlliedProducts*

Machinery

Chemicals

Electronics Items

Gems & Jewellery

Petroleum Products

99

India’s Trade Basket

Top 5 commodities in India’s trade basket with surplus/deficit in FY2017

* Includes plantation and marine productsSource: MOCI

Text

iles

& a

llie

d p

rdts

30

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Agr

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prd

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8.1

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spo

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qu

ipm

en

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Leat

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its

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Gem

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Mac

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-13

.0

Ore

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8.4

Ele

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-36

.3

Pe

tro

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m &

cru

de

prd

ts-5

5.2

( U

S$ b

n)

Top 5 Commodities with Trade Surplus

Top 5 Commodities with Trade Deficit

1010

India’s Share in Global Merchandise Exports

Soure: WTO

Rankings Country 2005 (%) Country 2010 (%) Country 2016 (%)

1 Germany 9.2 China 10.3 China 13.22 USA 8.6 USA 8.4 USA 9.13 China 7.3 Germany 8.2 Germany 8.44 Japan 5.7 Japan 5.0 Japan 4.05 France 4.4 Netherlands 3.8 Netherlands 3.66 Netherlands 3.9 France 3.4 Hong Kong 3.27 UK 3.7 South Korea 3.0 France 3.18 Italy 3.6 Italy 2.9 South Korea 3.19 Canada 3.4 UK 2.7 Italy 2.9

10 Belgium 3.2 Belgium 2.7 UK 2.611 Hong Kong 2.8 Hong Kong 2.6 Belgium 2.512 South Korea 2.7 Russia 2.6 Canada 2.413 Russia 2.3 Canada 2.5 Mexico 2.314 Singapore 2.2 Singapore 2.3 Singapore 2.115 Mexico 2.0 Mexico 1.9 Switzerland 1.916 Chinese Taipei 1.9 Chinese Taipei 1.8 Spain 1.817 Spain 1.8 Spain 1.7 Russia 1.818 Saudi Arabia 1.7 Saudi Arabia 1.6 Chinese Taipei 1.819 Malaysia 1.3 India 1.5 UAE 1.720 Sweden 1.2 UAE 1.4 India 1.721 Switzerland 1.2 Australia 1.4 Thailand 1.322 Austria 1.2 Brazil 1.3 Poland 1.323 Brazil 1.1 Malaysia 1.3 Australia 1.224 UAE 1.1 Switzerland 1.3 Malaysia 1.225 Thailand 1.1 Thailand 1.3 Brazil 1.226 Ireland 1.0 Poland 1.0 Viet Nam 1.127 Australia 1.0 Sweden 1.0 Saudi Arabia 1.128 Norway 1.0 Indonesia 1.0 Czech Republic 1.029 India 0.9 Austria 1.0 Austria 1.0

11

India’s Trade in Services

Strong Services Exports

(US$ bn)

145.7151.8

158.1 154.3163.1

80.8 78.7 81.6 84.6

95.7

64.973.1 76.5

69.7 67.4

FY13 FY14 FY15 FY16 FY 17

Exports Imports Trade Balance

65.9

69.4

73.1

74.273.7

FY13 FY14 FY15 FY16 FY 17

Software Services Export (US$ bn)

Source: RBI

12

India’s Share in Global Services Exports

Ranking Country 2005 (%) Country 2010 (%) Country 2016 (%)

1 USA 14.7 USA 14.3 USA 15.4

2 UK 8.1 UK 6.9 UK 6.7

3 Germany 6.4 Germany 6.4 Germany 5.6

4 France 4.8 France 5.0 France 4.9

5 Japan 4.3 China 4.2 China 4.3

6 Spain 3.7 Japan 3.6 Netherlands 3.7

7 Netherlands 3.6 Spain 3.2 Japan 3.6

8 Italy 3.5 Netherlands 3.0 India 3.3

9 China 2.9 India 3.0 Singapore 3.1

10 Hong Kong 2.5 Hong Kong 2.7 Ireland 3.0

11 Ireland 2.3 Ireland 2.5 Spain 2.6

12 Belgium 2.2 Italy 2.5 Switzerland 2.3

13 Canada 2.2 Singapore 2.4 Belgium 2.3

14 Singapore 2.2 Belgium 2.4 Italy 2.1

15 India 2.0 South Korea 2.2 Hong Kong 2.0

16 Switzerland 1.9 Switzerland 2.1 Luxembourg 1.9

17 South Korea 1.9 Canada 1.9 South Korea 1.9

18 Denmark 1.7 Luxembourg 1.6 Canada 1.7

19 Sweden 1.7 Denmark 1.6 Sweden 1.5

20 Austria 1.7 Sweden 1.6 Thailand 1.4

Source: WTO

13

India’s Foreign Direct Investment Flows

Foreign Direct Investment Inflows and Outflows

34.336.0

45.1

55.6

60.1

26.9

36.9

30.9

22.024.9

FY 13 FY 14 FY 15 FY 16 FY 17

(US

$ b

n)

FDI Inflows FDI Outflow

FDI inflow into India increased to

US$ 60.1 bn in FY2017, as

compared to US$ 34.3 bn in

FY2013, mainly due the two-fold

rise in equity inflows during the

period.

FDI outflow from India stood at

US$ 24.9 bn in FY2017, against

US$ 22.0 bn in FY2013

Note: FDI InflowFDI Outflows include Equity, Loan and Guarantee IssuedSource: RBI

1414

India’s Foreign Direct Investment Flows

India’s FDI Inflows – FY2017 stood at US$ 43.5 bn#

#- data is for FDI equity inflow; * - Services sector includes Financial, Banking, Insurance, Non-Financial / Business, Outsourcing, R&D, Courier, Tech. Testing and Analysis

Source: DIPP

Top FDI Investing Countries Sector-wise FDI Inflows

Services Sector*,

20%Computer

Software & Hardware

8%Telecommu

nications13%

Automobile Industry

4%Pharma2%

Trading5%

Chemicals3.2%

Power3%

Metallurgical

Industries3%

Others, 39%Mauritius

36%

Singapore20%

Japan11%

UK3%

Netherlands8%

USA6%

Germany2%

Cyprus1%

France1%

UAE2%

Others10%

1515

India’s Foreign Direct Investment Flows

India’s FDI Outflows – FY2017 (US$ 24.9 bn)

Destination-wise FDI Outflows Sector-wise FDI Outflows

Note: FDI Outflows include Equity, Loan and Guarantee Issued (Approved ODI)Source: RBI

Singapore22%

Mauritius17%

Netherlands15%

USA8%

UAE5%

U.K5%

British Virgin Island

3%

Switzerland3%

Cyprus2%

Channel Island

2%

Others18% Financial,

insurance and business

services24%

Agriculture and mining

22%Manufacturing20%

Wholesale, retail trade, restaurants and hotels

18%

Transport, storage and communication services

7%

Community, social and personal services

4%

Electricity, gas and water

2%

Others3%

1616