Lok Sabha Question No. 3070 (UNSTARRED), answered on 2018-12-31
Subject: Export of Merchandise Products and Services
Ministry: COMMERCE AND INDUSTRY
Asked by: DEEPENDER SINGH HOODA

## GOVERNMENT OF INDIA MINISTRY OF COMMERCE & INDUSTRY (DEPARTMENT OF COMMERCE)

## LOK SABHA UNSTARRED QUESTION NO. 3070 TO BE ANSWERED ON 31 st   DECEMBER,2018

## EXPORT OF MERCHANDISE PRODUCTS AND SERVICES

## 3070. SHRI DEEPENDER SINGH HOODA:

Will the Minister of COMMERCE & INDUSTRY ( वा ͨणÏय एवं उɮयोग मंğी ) be pleased to state:

- (a) whether the total export of merchandise products and services from the country has declined drastically during the last five financial year and the current financial year;
- (b) the  details  of  estimated  loss  to  the  economy  in  view  of  the  slump  in  exports  of merchandise and services during the said period;
- (c) the details of measures taken by the Government to boost export of merchandise and services from the country and the results achieved therein; and
- (d) the details of growth in export of 20 major export merchandise and services between 1st December, 2017 and 1st December, 2018?

## ANSWER

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THE MINISTER OF STATE IN THE MINISTRY OF COMMERCE AND INDUSTRY (SHRI C. R. CHAUDHARY)

- (a) India's exports (merchandise and services) have been continuously increasing since 2016-17 after a steady recovery from the downturn in exports seen in the face of the global slowdown in 2015-16(-11.07%). During 2016-17, exports registered a positive growth of 5.63 % over 2015-16; during 20117-18, it registered a positive growth of 13.31% over 2016-17; during 2018-19 (Apr-Oct), export registered growth of 17.24% as  compared  to  the  corresponding  period  of  previous  year.  The  values  of  India's merchandise, services and total exports along with the  percentage change for the last five years and the current year is as follows:

(Value in US$ billion)

| Years              |   Merchandise Exports | %Change   |   Services Exports | %Change   |   Overall Exports | %Change   |
|--------------------|-----------------------|-----------|--------------------|-----------|-------------------|-----------|
| 2013-2014          |                314.41 | --        |             151.81 | --        |            466.22 | --        |
| 2014-2015          |                310.34 | -1.29     |             158.11 | 4.15      |            468.45 | 0.48      |
| 2015-2016          |                262.29 | -15.48    |             154.31 | -2.40     |            416.6  | -11.07    |
| 2016-2017          |                275.85 | 5.17      |             164.2  | 6.41      |            440.05 | 5.63      |
| 2017-2018          |                303.53 | 10.03     |             195.1  | 18.82     |            498.63 | 13.31     |
| 2017-18 (Apr-Oct)  |                168.64 | --        |              94.49 | --        |            263.13 | --        |
| 2018-19 (Apr-Oct)* |                190.62 | 13.03     |             117.88 | 24.76     |            308.5  | 17.24     |

Source: DGCI&S and RBI, * Provisional

(b): The  values  of  India's  overall  exports,  imports  and  trade  balance  along  with  the percentage change for the last five years and the current year is given below:

(Value in US$ billion)

| Years              |   Overall Exports | %Change   |   Overall Imports | %Change   |   Overall Trade Balance |
|--------------------|-------------------|-----------|-------------------|-----------|-------------------------|
| 2013-2014          |            466.22 | --        |            528.95 | --        |                  -62.73 |
| 2014-2015          |            468.45 | 0.48      |            529.61 | 0.13      |                  -61.17 |
| 2015-2016          |            416.6  | -11.07    |            465.64 | -12.08    |                  -49.04 |
| 2016-2017          |            440.05 | 5.63      |            480.26 | 3.14      |                  -40.21 |
| 2017-2018          |            498.63 | 13.31     |            583.08 | 21.41     |                  -84.46 |
| 2017-18 (Apr-Oct)  |            263.13 | --        |            315.35 | --        |                  -52.23 |
| 2018-19 (Apr-Oct)* |            308.5  | 17.24     |            378.28 | 19.95     |                  -69.78 |

Source: DGCI&S and RBI, * Provisional

The  data  in  the  above  table  reveals  that  trade  deficit  decreased  till  2016-17. However, it increased in 2017-18 and 2018-19 (Apr-Oct) as compared to the corresponding period of previous year. Trade deficit depends upon relative fluctuations in the imports and exports of different commodities due to the global and domestic factors such as demand and supply in domestic and international markets, currency fluctuations, trade agreements between  competing  exporting  countries  with  export  destination  countries,  non-tariff barriers by export destination countries, cost of credit, logistics costs, etc.

(c): In order to boost India's merchandise and services exports, the Government has taken several measures through new Foreign Trade Policy 2015-20 launched on 1 st April  2015,  its Mid-term Review released on December 5, 2017 and other policy measures taken from time to time. The key measures include:

- i. FTP 2015-20 provides a framework for increasing exports of goods and services as well as generation of employment and increasing value addition in the country, in line with the 'Make in India', 'Digital India', 'Skills India', 'Startup India' and 'Ease of doing business' initiatives.
- ii. The main policy objective is to enable India to respond to the challenges of the external  environment  keeping  in  view  the  rapidly  evolving  international  trading architecture  and  make  trade  a  major  contributor  to  the  country's  economic growth and development.
- iii. The policy provides the framework for promotion of exports through schemes of incentives  on  exports and  duty  remission/exemption  on  inputs  for  export production.
- iv. The Merchandise Exports from India Scheme (MEIS) was introduced in the Foreign Trade  Policy  (FTP)  2015-20  on  April  1,  2015  with the objective to offset infrastructural  inefficiencies  and  associated  costs  involved  in  exporting  goods/ products  which  are  produced/  manufactured  in  India.  Duty  credit  scrips  issued under MEIS and the goods imported against these scrips are fully transferable.  On the  demand of  the  industry,  at  the  time  of  mid-term  review  of  the  FTP  in  Dec 2017,export  rewards  under  MIES  were  increased  by  2%  across  the  board  for labour  intensive,  MSME  sectors,  ready-made  garments  and  made  ups.  Later, rewards  to  some  agricultural  products  such  as  Bengal  Gram,  Milk  and  Milk Products, Soya de-oiled cake and Non Basmati rice have been provided/enhanced under MEIS for a limited period in the year 2018-19 to boost the exports of these agriculture sector items. As on date, The MEIS scheme covers 8057 tariff lines at 8 digits level, and provide rewards.
- v. The  'Services  Exports  from  India  Scheme  (SEIS)'  was  introduced  in  the  Foreign Trade  Policy  (FTP)  2015-20  on  April  1,  2015  for  increasing  exports  of  notified services.  At  the  time  of  mid-term  review  of  Foreign  Trade  Policy  2015-20,  the rates  for  all  the  notified  services  have  been  increased  by  2%  for  exports  with effect  from  01.11.2017,  leading  to  additional  estimated  annual  rewards  of  Rs 1,140 crore to promote exports of notified services.
- vi. An  Action  Plan  on  Champion  Sectors  in  Services  has  been  approved  on  28 th February  2018,  whereby,  nodal  Ministries/Departments  of  the  identified  12 champion  services  sectors  have  been  directed  to  undertake  sectoral  initiatives aimed at, inter alia , enhancing services exports.
- vii. Government has been organising various events including the Global Exhibition in Services,  Advantage  Health  Care  India,  and  Higher  Education  Summit  etc.  to showcase India's strength in services sector.  Government has also been participating in international fairs/ exhibitions relating to services sector.
- viii. In the various bilateral/ pluri-lateral/ multilateral trade negotiations, Government has  been  seeking  commercially  meaningful  market  access  for  India's  services exports.
- ix. The  policy  includes  measures  to  nudge  procurement  of  capital  goods  from indigenous  manufacturers  under  the  EPCG  scheme  by  reducing  specific  export obligation from 90 percent to 75 percent of the normal export obligation.
- x. The policy provides issue of Advance Authorisation to allow duty free import of inputs,  which  is  physically  incorporated  in  export  product  within  a  specified timeline.
- xi. Interest Equalization Scheme on pre and post shipment rupee export credit has been introduced from 1.4.2015 to help exporters in accessing credit at reduced rates.
- xii. 'Niryat  Bandhu  Scheme'  has  been  galvanised  and  repositioned  to  achieve  the objectives of 'Skill India' and trade promotion/awareness.
- xiii. Trade facilitation and enhancing the ease of doing business measures have been taken with special focus on moving towards paperless working. The Government has launched a Single Window Interface for Facilitating Trade (SWIFT) clearances project with effect from 1 st April, 2016. The scheme enables the importers/exporters to file a common electronic 'Integrated Declaration' on the Indian Customs Electronic Commerce/Electronic Data Interchange (EC/EDI) Gateway  i.e.  ICEGATE  portal.  India  also  ratified  the  WTO  Agreement  on  Trade Facilitation (TFA) in April 2016 for enhancing trade facilitation.
- xiv. A  new  scheme  called  'Trade  Infrastructure  for  Export  Scheme  (TIES)'  has  been launched  from  1 st April  2017  to  address  the  export  infrastructure  gaps  in  the country.
- xv. The Mid-term Review of Foreign Trade Policy 2015-20 launched on 5 th December 2017 provides more incentives for export promotion.

(d): The  details of  growth  of  20  major  sectors  of  merchandise  export  for  the  period December 2017 to November 2018 as compared to the corresponding period of previous year is given at Annexure-I . The details of export growth of 13 major sectors of services for the period January 2018 to September  2018  as  compared  to  the  corresponding  period  of  previous  year  is  given  at Annexure-II .

***

## Statement referred to in reply of part (d) of Lok Sabha Unstarred question no. 3070 for answer on 31 st December 2018.

## India's Merchandise Exports for major sectors

(Value in US$ million)

| S. No.                           | Major Sectors                                         |   Dec, 16-Nov, 17 |   Dec, 17-Nov, 18 | %Change   |
|----------------------------------|-------------------------------------------------------|-------------------|-------------------|-----------|
| 1                                | Engineering Goods                                     |          76164.6  |          82428.4  | 8.22      |
| 2                                | Petroleum Products                                    |          35065.4  |          48069.8  | 37.09     |
| 3                                | Gems And Jewellery                                    |          42305.2  |          40574.1  | -4.09     |
| 4                                | Organic And Inorganic Chemicals                       |          16769.5  |          21744.3  | 29.67     |
| 5                                | Drugs And Pharmaceuticals                             |          16754.2  |          18487.5  | 10.35     |
| 6                                | RMGof all Textiles                                    |          17437.1  |          15641.9  | -10.30    |
| 7                                | Cotton Yarn/Fabs./Madeups, Handloom Products Etc.     |          10209.1  |          11182.3  | 9.53      |
| 8                                | Plastic And Linoleum                                  |           6358.98 |           8300.22 | 30.53     |
| 9                                | Electronic Goods                                      |           6154.13 |           7753.31 | 25.99     |
| 10                               | Rice                                                  |           7110.69 |           7499.36 | 5.47      |
| 11                               | Marine Products                                       |           7097.09 |           6951.07 | -2.06     |
| 12                               | Leather And Leather Manufactures                      |           5190.1  |           5229.91 | 0.77      |
| 13                               | Man-Made Yarn/Fabs./Madeups Etc.                      |           4759.67 |           4981.05 | 4.65      |
| 14                               | Meat, Dairy And Poultry Products                      |           4489.87 |           4434.3  | -1.24     |
| 15                               | Mica, Coal And Other Ores, Minerals Including Process |           3705.95 |           4134.49 | 11.56     |
| 16                               | Spices                                                |           3023.74 |           3232.09 | 6.89      |
| 17                               | Fruits And Vegetables                                 |           2430.53 |           2465.21 | 1.43      |
| 18                               | Ceramic Products And Glassware                        |           1999.64 |           2434    | 21.72     |
| 19                               | Handicrafts Excl. Hand Made Carpet                    |           1797.65 |           1828.84 | 1.74      |
| 20                               | Oil Meals                                             |           1158.48 |           1219.23 | 5.24      |
| Total export of above 20 sectors | Total export of above 20 sectors                      |         269982    |         298591    | 10.60     |
| %Share of above 20 sectors       | %Share of above 20 sectors                            |             91.4  |             91.68 | --        |
| India's total exports            | India's total exports                                 |         295376    |         325678    | 10.26     |

Source: DGCI&S, Kolkata (figures for 2018 are provisional)

## Statement referred to in reply of part (d) of Lok Sabha Unstarred question no. 3070 for answer on 31 st December 2018.

India's Services Exports for major sectors

***

(Value in US$ million)

| S. No.                | Services Sectors                                          |   Jan-Sep, 2017 |   Jan-Sep, 2018 |   %Change |
|-----------------------|-----------------------------------------------------------|-----------------|-----------------|-----------|
| 1                     | Manufacturing services on physical inputs owned by others |              81 |             138 |     70.7  |
| 2                     | Maintenance and repair services n.i.e.                    |             177 |             144 |    -18.61 |
| 3                     | Transport                                                 |           12591 |           14192 |     12.71 |
| 4                     | Travel                                                    |           19924 |           21196 |      6.38 |
| 5                     | Construction                                              |            1756 |            2311 |     31.6  |
| 6                     | Insurance and pension services                            |            1848 |            1891 |      2.29 |
| 7                     | Financial services                                        |            3502 |            4109 |     17.33 |
| 8                     | Charges for the use of intellectual property n.i.e.       |             444 |             603 |     35.61 |
| 9                     | Telecommunications, computer, and information services    |           57589 |           62555 |      8.62 |
| 10                    | Other business services                                   |           25871 |           28780 |     11.24 |
| 11                    | Personal, cultural, and recreational services             |            1100 |            1422 |     29.31 |
| 12                    | Government goods and services n.i.e.                      |             418 |             489 |     16.94 |
| 13                    | Others n.i.e.                                             |            8717 |           12024 |     37.94 |
| Total Services Export | Total Services Export                                     |          134019 |          149853 |     11.81 |

Source: Balance of Payments, RBI