CHAPTER-IV COMMODITY COMPOSITION OF INDIAN FOREIGN TRADE DURING THE POST- WTO PERIOD

Transcription

1 CHAPTER-IV COMMODITY COMPOSITION OF INDIAN FOREIGN TRADE DURING THE POST- WTO PERIOD The changes in the composition of trade in goods work as a mirror to watch the developments taking place in the domestic structure of production over a period of time. For instance, an industrializing country import largely capital goods and export non-industrial products. A highly industrialized nation import raw materials and goods in which it does not have comparative advantage, and exports largely industrial goods. Therefore, the structure of foreign trade can enable us to know the level of development of a country and its economic structure. Since independence, India s foreign trade has undergone a complete transformation in terms of composition of commodities. The Indian exports cover a wide range of traditional and non-traditional products while imports mainly consist of capital goods, petroleum products, raw materials, intermediates and chemicals to meet the ever increasing industrial demands. With the introduction of new economic policy since and the formation of WTO (with effect from January 1, 19) the velocity of India s foreign trade has received a momentum. The simplified operational tariff policy has replaced the restrictive import licensing regime. Import licensing has been totally abolished with respect to imports of most of the machinery, equipment and manufactured intermediate products. In some sectors controls have been reduced on administrative prices. The policy focus has been primarily on liberalization of capital goods and inputs for industry, to encourage domestic and export-oriented growth. However, imports of consumer goods remained regulated. In the light of above discussion, this chapter has been designed to study the commodity composition of India s exports and imports during the Post-WTO Period. This chapter is divided into two sections. Section-I deals with the analysis of the commodity composition of India s exports during the post-wto period. The analysis

2 of data relating to commodity composition of Indian imports during the post-wto period has been discussed in the Section-II. SECTION-I 4.1 DYNAMICS OF COMMODITY COMPOSITION OF INDIAN EXPORTS DURING THE POST-WTO PERIOD Prior to the reforms, the prime commodity of Indian exports were the agricultural commodities and manufacturing commodities (like textiles, gems and jewellery), while in the Post Liberalization period, commodity composition has shifted to technology intensive manufacturing commodities such as engineering goods and chemicals (Report on Currency and Finance, 29). The following analysis of the commodity composition of Indian exports and imports reveals some interesting facts during the Post Liberalization period. The commodity composition of Indian exports during the Post-WTO period is presented in table 4.1. The amount of India s exports has been increased from Rs crore in to Rs crore in 21- during the post-wto period. The compound growth rate of Indian exports is under the study period, which has been found statistically significant at 1 per cent probability level on the basis of the value of t-statistics. The items of composition of the Indian exports has been divided into four categories, namely, Primary products which are further divided into two main categories; Agricultural and Allied Products and Ores and Minerals; Manufactured Goods; Petroleum Products; and Others. The analysis of data in Table 4.1 reveals that the commodity composition of India s exports has undergone a major change during the Post-Liberalization period. 69

3 Table 4.1 Dynamics of Commodity Composition of Indian Exports During the Post-WTO Period Total Primary Products Agr & Ore allied & prod. min Total Lthr & mnf Chm &allied prds Manufactured goods Eng goods Textiles & textile prds Gems & jewel Handicrafts Other mnf gds ( Rs. Crore) Petrlm Others Contd... 7

4 71 Total Primary Products Manufactured goods Petrlm Others Agr & allied prod. Ore & min Total Lthr & mnf Chm &allied prds Eng goods Textiles & textile prds Gems & jewel Handicrafts Other mnf gds Contd...

5 Total Primary Products Agr & Ore allied & prod. min Total Lthr & mnf Chm &allied prds Manufactured goods Eng goods Textiles & textile prds Gems & jewel Handicrafts Other mnf gds Petrlm Others CAGR r Adjusted r 2 t-stat * * 13. * 44.4 * * * * 28.5 * * * 7.92 * * Note: 1. Figures in dark refer to percentages 2. Handicrafts excluding handmade carpets 3. *refers to 1% level of Significance Source:- 1. Data collected from RBI, database (Handbook of Statistics of Indian Economy, 21-) and averages calculated by author. 2. Data for 29-1 are revised and data for 21- are provisional 72

6 I. PRIMARY PRODUCTS (i) Agricultural and Allied Products The principal item of Indian Exports has been represented by agricultural based commodities. The Agricultural and Allied products (includes, Tea; Coffee; Rice; Wheat; Cotton Raw Including Waste; Tobacco; Cashew including Cashew Nut Shell Liquid; Spices; Oil Meals; Fruits and Vegetables; Processed Fruits, Juices, Miscellaneous Processed Items; Marine Products; Sugar and Molasses; Meat And Meat Preparations; and Other Agriculture and Allied Products) is a major commodity group exported by India. The data reveals that primary products contributed in the range of per cent of total exports. The share of agricultural & allied products was 16.5 per cent in which increased to per cent in and 2.5 per cent in 19-. However, it declined to per cent in 17-, per cent in 18-, and per cent in 19-2, which further declined to 13.4 per cent in 2-1. It slightly increased to per cent in 21-2 as compared to the previous year, which again declined to per cent in,.79 per cent in 2-4, 1.14 per cent in 24-5 and 9.91 per cent in Its share improved for two consecutive years, namely, 1. per cent in 26-7 and.31 per cent in the year 27-8, which again declined to 9.59 per cent in 28-9, it slightly improved to 9. per cent in 29-1, which further declined to 9.72 per cent in 21-. So the study found that the share of agricultural commodities has declined during the post WTO period. The analysis of data reveals that the average compound growth rate of agricultural and allied products export remained.94 per cent under the post-wto regime. The same has been found statistically significant at 1 per cent probability level on the basis of the value of t-statistics. The growth of exports of this group is also shown graphically in figure 4.1A. Figure 4.1A Growth of Agricultural & Allied Products during the Post-WTO Period Agricultural & Allied Products Agr & allied prod. 73

7 (ii) Ores and Minerals Minerals are a valuable natural resource being the vital raw material for infrastructure, capital goods and basic industries. As a major resource for development the extraction and management of minerals has to be integrated into the overall strategy of the country s economic development. The exploitation of minerals has to be guided by long-term national goals and perspectives. Just as these goals and perspectives are dynamic and responsive to the changing global economic scenario so also the national mineral policy has to be dynamic taking into consideration the changing needs of industry in the context of the domestic and global economic environment. Therefore, New Mineral Policy was launched by Indian government in 13. This sector was opened up to FDI in 13 after the announcement of this policy. The data on Ores and Minerals during the Post-WTO regime is presented in table 4.1. Ores and Minerals category includes, Iron Ore; Mica; and Other Ores and Minerals. The analysis of data reveals that the percentage share of Ore and Minerals in the total Indian exports has continuously declined during the first five years of WTO period. The annual growth rate of ore and minerals was 3.75 per cent in, which declined to 2.49 per cent in However, annual growth rate of Ores and Minerals slightly increased from 2.58 per cent in 2-1 to 3.71 per cent in 2-4, which further increased to 6.8 per cent in It declined to 5. per cent and 5.54 per cent in 25-6 and 26-7 respectively. The share of Ore and Minerals slightly improved to 5.59 per cent during the recession period of 27-8, which declined to 4.27 per cent in In 29-1, its share increased 4.86 per cent, which again declined to 4.19 per cent in 21-. The compound growth rate of Ore and Minerals is 21.9 per cent during the study period, which has been found statistically significant at 1 per cent probability level. The trend of growth rate is shown in figure 4.1B. Figure 4.1B Growth of Ores & Minerals Products during the Post-WTO Period Ores & Minerals Ore & min 74

8 II. MANUFACTURED GOODS The loss of agriculture sector is the gain of the industrial sector, whose share in the total exports has consistently grown from 1-51 till date. In 1-61, its share in the total goods exported was per cent; it rose to 5.29 per cent in 1-71 and further increased from per cent in 1-81 to 72.9 per cent in 1-91 (Mathur, 2). Therefore, it represent as a major commodity group exported by India. The consistent rise in the share of this commodity group can be attributed to many major commodities, like Gems and Jewellery, Ready Made Garments, Cotton Yarn and Fabrics, Leather and Leather Manufactures, Machinery and Electronic Goods etc. These exports have shown a remarkable increase during the span of 5 years (ibid, 2). The data on Manufactured Goods during the Post-WTO regime has been presented in table 4.1. The major items of Manufactured Goods include namely, Leather & Manufactures; Chemical & Allied Products; Engineered Goods; Textiles & Textile Products; Gems & Jewellery, Handicrafts, and Other Manufactured Goods. Chemical & Related Products category include four items such as Basic Chemicals, Pharmaceuticals & Cosmetics; Plastic and Linoleum Products; Rubber, Glass, Plants, Enamels Products; and Residual Chemicals and Allied Products. Engineering Goods include Iron & Steel; Manufacture of Metals; Machinery and Instruments; Transport Equipment; Electronic Goods and other Engineering Goods. Textiles & Textile Products category include nine items, namely, (i) Cotton Yarn, Fabrics, Made-ups, etc.(ii) Natural Silk Yarn, Fabrics, Made-ups, etc., Incl. Silk Waste (iii) Manmade Yarn, Fabrics, Made-ups, etc. (iv) Manmade Staple Fiber (v) Woolen Yarn, Fabrics, Made-ups, etc. (vi) Readymade Garments (vii) Jute & Jute Manufactures (viii) Coir & Coir Manufactures and (ix) Carpets which further categorizes into three items such as Carpet Handmade, Carpet Mill-made and Silk Carpets. The analysis presented in table 4.1 reveals that the annual average percentage of the share of Manufactured Goods in Indian exports was per cent in, per cent in, which further declined to per cent in 19-. However, it improved during the next three consecutive years and reached to

9 per cent in 17-, per cent in 18- and 8.7 per cent in 19-. It again declined for two consecutive years to 77.5 per cent in 2-1 and per cent in In, it slightly increased to per cent. The share of Manufactured Goods again declined to 75. per cent in 2-4, per cent in 24-5, 7.38 per cent in 25-6, 67.2 per cent in 26-7, which further declined to the level of per cent in From the analysis of data, the study found that the combined annual average share of Manufactured Goods declined from per cent in to per cent in 21-. The study further mentioned that the average share of manufactured goods as percentage of total exports during the post- WTO period declined to even less than the level which was attained during the period of 1-81 to 1-91 (i.e per un).. The compound growth rate of Manufactured Goods is per cent during the study period, which has been found statistically significant at 1 per cent probability level. The trend in the growth rate is sown in figure 4.2. Figure 4.2 Growth of Total of Manufactured Products during the Post-WTO Period Total of Manufactured Goods Total of Manufactured Goods (i) Leather and Leather Manufactures The data reveals that share of Leather and Leather Manufactures in the total exports was 6.12 per cent in, which declined to 1.49 per cent in 21-. The calculated compound growth rate of Leather and Leather Manufactures is 8.14 per cent (1 per cent significance level) during the post-wto regime. The trend in growth is shown in figure 4.2A. 76

10 Figure 4.2A Growth of Leather and Manufacture Products during the Post-WTO Period Leather & Manufactures Leather & Manufactures (ii) Chemicals and Allied Products The share of Chemicals and Allied Products in the total exports was.65 per cent in, which slightly declined to.41 per cent in 21-. The calculated compound growth rate of Chemicals and Allied Products increased to per cent (1 per cent significance level) during the study period. The trend in growth is shown in figure 4.2B. Figure 4.2B Growth of Chemicals & Allied Products during the Post-WTO Period Chemicals & Allied Products Chemicals and Related Products (iii) Engineering Goods The data on Engineering Goods reveals that the share of Engineering Goods to total exports increased to 27.8 per cent in 21- from per cent in. The compound growth rate of Engineering Goods is 23. per cent, which has been found significant at 1 per cent during the study period. The trend in growth rate is shown in figure 4.2C. 77

11 Figure 4.2C Growth of Engineering Products during the Post-WTO Period Engineering Goods Engineering Goods (iv) Textile and Textile Products The annual average share of Textile and Textile Products which was 27. per cent in, sharply declined to 9.18 per cent in 21-. So the study found that textile and textile products, which is the key industry of Indian economy has suffered during the post-wto period due to tuff competition at the global level. The trend in growth rate is shown in figure 4.2D Figure 4.2D Growth of Textile & Textile Products during the Post-WTO Period Textile & Textile Products Textile & Textile Products (v) Gems and Jewellery Gems and Jewellery is considered as the growth potential export sector which contained diamonds, coloured gemstones, gold jewellery, perals, non-gold jewellery, synthetic stones and costume/fashion jewellery. This product group made significant contribution to India s overall export earnings and foreign exchange earnings. In, Gems and Jewellery exports were valued at Rs. 1413, which rose to Rs crore in 21-. The share of this commodity group has increased consistently and continuously over the period of 5 years. In 1-61, its share was less than 1 per cent 78

12 i.e..16, it grew at 2.93 per cent in 1-71, which sharply rose to 9.21 per cent in 1-81 and 16. per cent in 1-91 (Mathur, 2). The share of this group to total exports reached to 17.9 per cent in, which slightly declined to 16.5 during the study period. The compound annual average growth rate of Gems and Jewellery is per cent (1 per cent significance level) under the WTO regime. The trend in growth rate is graphically shown in figure 4.2E. Figure 4.2E Growth of Gems & Jewellery Products during the Post-WTO Period Gems & Jewellery Gems & Jew ellery (vi) Handicrafts and Others Manufactured Products The annual average share of Handicrafts (excluding Handmade Carpets) was 1.47 per cent in, which declined to.9 per cent in 21-. In case of Other Products, the annual average share was.81 per cent in, which slightly improved to.87 per cent in 21-. The compound growth rate of Handicrafts was found negative (1.83) and, of other products is per cent and found significant at 1 per cent level of significance during the post-wto period. The trend in growth rates is graphically shown in figure 4.2F and 4.2G. Figure 4.2F Growth of Handicrafts (Excluding Handmade Carpets) Products during the Post- WTO Period Handicrafts (excluding Handmade Carpets) Handicrafts 79

13 Figure 4.2G Growth of Manufactured Products during the Post-WTO Period Other Manufactured Goods Other Manufactured Goods III. PETROLEUM PRODUCTS Table 4.1 reveals that the share of Petroleum Products in the total exports was 1.58 per cent in, 1.43 per cent in, which rose to per cent in 21-. The analysis reveals that the share of petroleum products has shown a declining trend during the period from to 19-. However, the share of petroleum products increased from 4.19 per cent in 2-1 to per cent in 27-8, which declined to per cent during the post recession period of Its share slightly improved from per cent in 29-1 to per cent in 21-. The compound growth rate of Petroleum Products is per cent, which has been found significant at 1 per cent level of significance. The trend in growth rate is graphically shown in figure 4.3. Figure 4.3 Growth of Petroleum Products during the Post-WTO Period Petroleum Petroleum IV. OTHERS PRODUCTS Table 4.1 reveals that the share of Other Products in the total exports was 1.12 per cent in, which increased to 3.43 per cent in 21-. The compound 8

14 growth rate of Other Products is per cent, which has been found significant at 1 per cent level of significance. Figure 4.4 Growth of Others Products during the Post-WTO Period Other Products Others The analysis of data based on commodity composition of Indian exports during the post WTO period reveals that Indian export sector has remained under pressure. Several policy reforms have been introduced to strengthen the base of Indian exports which could not improve the performance of exports during the post WTO period. SECTION-II 4.2 DYNAMICS OF COMMODITY COMPOSITION OF INDIAN IMPORTS DURING THE POST-WTO PERIOD An attempt has also been made to study the performance of Indian imports during the post-wto period. It has been observed that the structure of India s imports has undergone a major change during the post WTO period. After independence, Indian government took keen interest to develop its own industries. However, the desire for rapid industrialization necessitated large quantity of imports of machinery, capital equipment, transport goods and project goods. It is pertinent to mention that the Commodity Composition of Indian is peculiar in the sense that few items of imports accounts for approximately 9 per cent of our total imports during the post-wto period. Important among the major imports include, petroleum products, 81

15 capital goods, pearls and precious stones, iron and steel, gold and silver, chemicals and edible oils. The data of the Commodity Composition of Indian during the post- WTO regime is presented in Table 4.2. The amount of India s imports has been increased from Rs. 871 crore in to Rs crore in 21- during the post-wto period. The compound growth rate of Indian exports has been found 19. per cent during the study period, which has been found statistically significant at 1 per cent significance level. The items of composition of the Indian imports have been divided into two main categories, namely, Bulk and Non-Bulk. 82

16 Total Table 4.2 Commodity Composition of Indian During the Post-WTO Period Total of Bulk Petroleum, Crude and Products Bulk Bulk Consumption Goods Other Bulk Total of Non-Bulk Non-Bulk Capital Mainly Goods Export Related Items (Rs. Crore) Others Non- Bulk Contd... 83

17 Total Total of Bulk Petroleum, Crude and Products Bulk Bulk Consumption Goods Other Bulk Total of Non-Bulk Non-Bulk Capital Mainly Goods Export Related Items Others Non- Bulk Contd... 84

18 Total Total of Bulk Petroleum, Crude and Products Bulk Bulk Consumption Goods Other Bulk Total of Non-Bulk Non-Bulk Capital Mainly Goods Export Related Items Others Non- Bulk CAGR r Adjusted r 2 t-stat * * * 12.9 * 9.8 * * * 23. * 29.8 * Note: 1. Figures in dark refer to percentages 2. Handicrafts excluding handmade carpets 3. *refers to 1% level of Significance Source: - 1. Data collected from RBI, database (Handbook of Statistics of Indian Economy, 21-) and averages calculated by author. 2. Data for 29-1 are revised and data for 21- are provisional 85

19 I. BULK IMPORTS Bulk category includes Petroleum; Bulk Consumption Goods; and Other Bulk imports. The data on Bulk reveals that it constitutes about 5 per cent of total imports bill of India. The compound annual growth rate of Bulk Items of Indian imports comes to be per cent during the post-wto period, which has been found statistically significant at 1 per cent probability level based on the value of t-statistics. The annual average percentage share of Bulk to total imports was per cent in, which rose to per cent in 21-. A considerable variation has been found in the annual growth rate of Bulk of India. The annual percentage changes in Bulk varied from a low share of per cent in 18- to a high share of per cent in The trend in growth of bulk imports is shown in figure-4.2i. Figure 4.2I Growth of Total of Bulk Products during the Post-WTO Period Total of Bulk Total of Bulk (i) Petroleum and Other Petroleum Products A distinctive feature of Indian imports is that there has been a compulsion of petroleum products imports during a span of almost 6 years since independence. In other words, the demand for petroleum products has increased many times over the period of time. Another factor which has contributed to substantial increase of this group s share is the continuous increase in the prices of these products. The data on Petroleum Products is presented in table 4.2. The data reveals that the share of Petroleum, Crude and related Products imported in total imports of India in was 2.69 per cent, which rose to 3.7 per cent in 21-. The data further reveals that it constitutes about 2-3 per cent of total imports. The calculated compound annual average growth rate of Petroleum Products has been found per cent and found significant at 1 per cent level of significance during the post-wto period. The trend in growth is shown in figure 4.2IA. 86

20 Figure 4.2IA Growth of Petroleum, Crude and Products during the Post-WTO Period Petroleum, Crude and Products Petroleum, Crude and Products (ii) Bulk Consumption Goods Bulk Consumption goods are further divided into four categories i.e. Cereals and Cereal Preparations; Edible Oils; Pulses; and Sugar. The data reveals that the annual average percentage share of Consumption Goods to total imports was 3. per cent in, which declined to 2.48 per cent in 21-. The compound annual growth rate of Bulk Consumption Goods of Indian imports has been found to be per cent and found significant at 1 per cent level of significance during the post-wto period. The data reveals that there has been a considerable variation in the annual average growth rate of Bulk Consumption products. The annual percentage changes in Bulk Consumption Goods varied from a higher level of 5. per cent in 18- to a lower level of 1.66 per cent in The trend in growth of bulk consumption goods is shown in figure- 4.2IB. Figure 4.2IB Growth of Bulk Consumption Products during the Post-WTO Period Bulk Consumption Goods Bulk Consumption Goods 87

21 (iii) Other Bulk Items Other Bulk Items are divided into seven categories, namely, (i) Fertilizers which further categorized into Crude; Sulphur and Unroasted Iron Pyrites and Manufactured; (ii) Non-Ferrous Metals; (iii) Paper Boards, Manufactures including News Prints; (iv) Crude Rubber, including Synthetic and Reclaimed; (v) Pulp and Waste Paper; (vi) Metalliferrous Ores, Metal Scrap etc.; and (vii) Iron and Steel. The data shows that the annual average percentage share of Other Bulk Items to total imports was per cent in, which declined to 1.13 per cent in 21-. The compound annual average growth rate of Other Bulk Items of Indian imports has been found to be per cent and found significant at 1 per cent level of significance during the post-wto period. The trend in growth of bulk consumption goods is shown in figure-4.2ic. Figure 4.2IC Growth of Other Bulk Products during the Post-WTO Period Other Bulk Items Other Bulk II. NON-BULK IMPORTS Non-Bulk of India includes Capital Goods, Mainly Export Related Items and Others. The annual average percentage share of Non-Bulk to total imports was 6.49 per cent in, which declined to per cent in 21-.The compound annual average growth rate of Non-Bulk Items of Indian imports has been found to be per cent and found significant at 1 per cent level of significance during the post-wto period. It implies that the share of non-bulk imports has also increased during this period. The trend in growth of bulk consumption goods is shown in figure- 4.2II. 88

22 Figure 4.2II Growth of Non-Bulk Products during the Post-WTO Period Total of Non-Bulk Total of Non-Bulk (i) Capital Goods of Capital Goods include Manufactures of Metals; Machine Tools, Machinery except Electrical and Electronic; Electrical Machinery except Electronic; Electronic Goods; Computer Goods; Transport Equipment; and Project Goods. Table 2 reveals that the annual average percentage share of Capital Goods to total imports was per cent in, which declined to 2.33 per cent in 21-. The annual percentage changes of Capital Goods varied from per cent in to per cent in 2-1. The compound annual average growth rate of Capital Goods of Indian imports has been found to be per cent and found significant at 1 per cent level of significance during the reference period. The trend in growth of bulk consumption goods is shown in figure-4.2iia Figure 4.2IIA Growth of Capital Goods during the Post-WTO Period Capital Goods Capital Goods (ii) Export Related Items Export Related Items includes four major items, namely, Pearls, Precious and Semi-Precious Stones; Organic and Inorganic Chemicals; Textile Yarn, Fabrics, Made- 89

23 Ups, etc.; and Cashew Nuts. The annual average percentage share of Export Related Items to total imports was 15.6 per cent in, which slightly declined to 14.9 per cent in 21-. The compound annual average growth rate of Export Related Items of Indian imports has been found to be per cent and found significant at 1 per cent level of significance during the post-wto period. The trend in growth of bulk consumption goods is shown in figure-4.2iib Figure 4.2IIB Growth of Mainly Export Related Products during the Post-WTO Period Mainly Export Related Items Mainly Export Related Items (iii) Other Non-Bulk Items Other items of imports includes Gold and Silver; Artificial Resins and Plastic Materials, etc.; Professional, Scientific Controlling Instruments, Photographic Optical Goods; Coal, Coke and Briquettes, etc.; Medicinal and Pharmaceutical Products; Chemical Materials and Products; Non-Metallic Mineral Manufactures; and Others. Liberal policy towards the gold and silver s imports has led to increase in its imports from $3.2 billion in 17- to $4.9 billion in 18-, thus raising the share of these imports in total imports from 7.6 per cent in 17- to.6 per cent in 18-. The major share of this increase was on account of the shift in these imports from the NRI baggage route, the erstwhile preferred route, to the DGCI&S reporting system (Mathur, 2). The Gold Deposit Scheme 19 was announced in the Union Budget 19- to reduce the import of gold in the long run and to draw out privately held gold stocks and to reduce India s dependence on imports. The share of other items of imports to total imports was per cent in, which increased sharply to 22.9 per cent in 21-, due to a sharp increase in imports of gold and silver. The compound annual growth rate of other items of imports of Indian imports has been found to be 2.23 per 9

24 cent, which has been found significant at 1 per cent level during the period under study. The trend in growth of bulk consumption goods is shown in figure-4.2iic. Figure 4.2IIC Growth of Other Non-Bulk Products during the Post-WTO Period Others Non-Bulk Others Non-Bulk It is clear from the above analysis that the changes, which have taken place in the world economy, have influenced the Indian foreign trade during the post-wto period. The analysis of data reveals that the structure of India s exports and imports has drastically changed during the Post-WTO period. The analysis of the data further reveals that the commodity composition of the Indian exports has undergone a major change during the Post-Liberalization period. The analysis reveals that the share of agricultural and allied products has declined during the post WTO period. The study found that the share of Manufactured Goods has increased from Rs crore in to Rs crore in 21- during the study period. The analysis shows that the compound growth rate of all the principal commodities of Indian exports has been found significant at 1 per cent level except handicrafts. Handicraft sector of Indian exports is a major foreign exchange earning sector, therefore, there is need to give more impetus to this sector. Moreover, several steps are also required to facilitate the other important foreign exchange earning sectors of India, namely cottage, gems and jewellery, electronic and the computer software, engineering and consultancy. A considerable variation has been found in the annual growth rate of Bulk of India. The data reveals that the share of Petroleum, Crude and related Products imported in total imports of India in was 2.69 per cent, which rose to 3.7 per cent in 21-. The share of non-bulk imports has also increased during this period. The 91

25 share of others non-bulk imports to total imports has sharply increased during the study period. The analysis of data on the commodity composition of Indian exports during the post WTO period reveals that Indian export sector has remained under pressure. Several policy reforms were introduced in the Indian Foreign Trade Policy, but it could not improve the performance of exports during the process of trade liberalization. The analysis of commodity composition of Indian exports and imports during the post-wto period reveals that the share of Indian exports in value terms has increased from to 21-. This increase has been found statistically significant at 1 per cent level of significance. As the compound growth rate of Indian exports has been found per cent during this period. The analysis of data further reveals that the commodity composition of Indian exports has undergone a major change during the post-wto period. The growth of agricultural and allied products shows an increasing trend during this period. However, the Compound growth rate of agricultural and allied products exports remained.9 per cent, which is less than the overall growth rate of Indian exports in value terms. The compound growth rate of ores and minerals is 21.9 per cent, which has also been found significant at 1 per cent level of significance, though the share of this component as percentage of total exports remained on the lower side. The study further found that there is consistent increase in the share of manufactured goods during the post-wto period, which was per cent in which reached to 8.7 per cent in 19-. However, it starts declining and reached to the level of per cent in 27-8, which may be the reason of the continuous recession of this decade. It reached to the level of per cent in the year 21- which is lower than even the level of The analysis of data further reveals that there is increasing trend of exports in value terms in all the commodities of exports except handicrafts and other manufactured products, which increased from and reached to the peak level in but start declining and reached to level in 21-. The analysis of commodity composition of Indian imports during the post-wto period reveals some interesting facts. The commodity composition of Indian imports is peculiar in the sense that few items of imports accounts for approximately 9 per cent our 92

26 total imports during the post-wto period. Within the bulk imports category, the share of petroleum products has shown a dominant position during the post-wto period. This has happened due to number of factors, namely, the continuous increase in the international prices of petroleum products; the continuous depreciation of Indian rupee on account of devaluation as well as due to market pressure has contributed to the increase in the total value of imports of this category. The foregoing analysis of all the components of imports reveals that the rate of growth has increased during the post-wto period, which has contributed ultimately to the higher rate of increase in the value of imports during the period under study. 93