Overview of the Economy of India in 2015

A general economic slump has made its wrathful effects felt in the 7th largest economy of the world too. The import and export figures of India for the year 2015 has not been very shining due to a subdued economic slowdown that was felt globally and within the country too. If a comparison was made between the Indian export and import in May 2014 and that of May 2015 the contraction observed was 20.2% for exports and 16.5% for imports measured in the same scale of time.

The total export of India in the last financial year was found to be worth $217.7 billion while in the same period the worth of total import was $324.5 billion. Both have been maintaining a declining steep due to the global slowdown. At a value of $106.8 billion the trade deficit was found to be standing. The trade in commodities or the merchandise trade had share of 13.9% in the GDP of India in the year 1991-92. In the year 2004-2005 it secured 27% share while it went up further in 2013-2014 to a percentage of 41%. In the year 2014-2015 the merchandise share occupied a percentage of 37.1% of the GDP. In 2013 the exports share in world merchandise was found to be 1.75% for India. And even in the year 2015 it was realized that it is crucial to take it to a decent share of 4% in another 2 or 3 years. But judging by the condition this seems to be a distant dream. While that of China it is found to be 11% in world trade.

 

Export Market of India 

The two dominating states of India for exports particularly are Maharashtra and Gujarat. The two largest trade partners of the country are UAE and China. India’s merchandise export basket comprises of many items. The goods can be classified broadly into four broad categories and they are crude oil and petroleum products, ores and minerals, farm products and manufactured goods. The last one has to be the backbone of Merchandise exports for the nation. The share of gems and jewellery is very vehement in the merchandise export section too.

From December 2014 onwards a sharp contraction has been observed for the next six months in the imports and exports of India.  Except for March 2014, even in the previous year, within the same zone, that is from December 2013 to May 2014 a contraction in imports have been observed. A marginal uptick was somehow noted in the March of 2014. But then robust growth in exports was observed in the months starting from March to May 2014. And the experts attribute these changes more to the global economic scenario than any other particular internal or national reason.

 

The Increasing Imports of the Indian Commodity Market

India’s imports have always been a little or quite more than its exports thus giving rise to a normal and evident trade deficit. The recent contraction in exports and imports has given rise to a $10.4 billion trade deficit from a figure of $11.2 billion in May 2014 and $11 billion amount in April 2015.

With a serious analysis it has been expected that the global growth that is taking place sluggishly especially in nations like China, US, the Euro region and Japan will continue to show its impacts on the exports of India in a negative way. However if gold import from India continue trending up then growth of imports on the other hand has a high chance of revival and can bounce back. Since August of 2014 gold import growth has shown a positive climb up.

 

Commodities with Great Export and Import Value

 

India's Import and Export Data for 2015

The reason behind why gold import has seen a rise was not price driven but it was mainly volume driven. 63 tonnes of gold, as big as that value of gold has been imported by India in May 2015. This figure when compared with the figures of May 2014 showed that it was up by 19%. However the price of gold was found to be down by 7% in the month before.

However this scenario was converse of what happened with imports of oil in the country. The imports of oil in May 2015 was found to be at $8.5 billion, 41% lower than what it was in the previous year during the same time, that is the in the month of May 2014. With this it marked the 8th straight month of contraction. Unlike gold if graphs were studied then it can be clearly concluded that oil exports and imports have loyally followed the changes in price.

Products bought from India that is India’s exports in quite a few commodity items fell in the month of May in 2015. Compared to the levels maintained in May 2014, the rice exports saw a fall of almost 14.6% in May 2015. And for other grain if comparison is made with May 2014 a very huge percentage of 77.7% contraction was observed. Other export goods like iron ore exports fell by a disastrous percentage of 86% and gems and jewellery also saw a fall of 12.9% in the year 2015.

The overall changes in the contraction of both and exports is a herald of not so good times and is a sharp indication towards a subdued Indian and global demand for trade. Euro area and Japan are seeing some marginal growth, while China’s growth is showing a deceleration to a 6 year low and the GDP growth of US is negative as well.

India placed 54 corporations on the Forbes 2015 Global 2000 rankings. Many of these are major Indian export companies. Below is a selection of some of the biggest Indian corporations.

  • Reliance Industries (oil, gas)
  • Tata Motors (cars, trucks)
  • Indian Oil (oil, gas)
  • Coal India (diversified metals, mining)
  • ITC (tobacco)
  • Bharat Heavy Electricals (electrical equipment)
  • Hindalco Industries (aluminum)
  • Tata Steel (iron, steel)
  • Bharat Petroleum (oil, gas)
  • Hindustan Petroleum (oil, gas)
  • Sun Pharma Industries (pharmaceuticals)
  • Steel Authority of India (iron, steel)
  • Bajaj Auto (recreational products)
  • Hero Motocorp (recreational products)
  • Grasim Industries (construction materials)
  • JSW Steel (iron, steel)

 

A revival in production was however observed in the month of May in 2015 in India when it came to the Index of Industrial Production. And as a result even in demand some amount of revival was seen. In order to boost some significant and eye catching growth in the economy of the nation, the demand still needs to pick up the pace.

Some of the main import partners for India are Saudi Arabia, Vhina, Switzerland, US and UAE. A general betterment of the world economy is required for imports and exports to improve for India as a nation.

 

Resources: 

 

http://www.thehindu.com/data/what-do-indias-latest-export-and-import-figures-tell-us/article7326453.ece

http://www.tradingeconomics.com/india/imports