This is written as a small addendum to Pavan’s insightful article on India-US trade. I shall aim to give a small snapshot of these commodities and their significance in the world trade.
The charts and tables above give a closer look at the top commodities traded with the US between 2009 and 2013 and their trends. The numbers above each bar represent the change in percentage terms over that period.
With a market share of about US$ 41 billion in 2013, the Gems and Jewelry industry in India is becoming one of India’s top foreign exchange earners. India imported US$ 3.9 billion worth of gem diamonds from the United States in 2013 and exported US$ 7.4 billion. Globally, India imported 163.11 million carats of rough diamonds worth US$ 16.34 billion and exported 36.46 million carats of polished diamonds valued at US$ 20.23 billion in 2013. The difference can be roughly seen as the value added by India. The country exported gems and jewelry worth about US$36 billion in 2013, significantly contributing to India’s foreign exchange earnings.
Exports of pharmaceutical products are also on the rise (132% over 5 years). Globally, the Indian pharmaceutical industry is ranked third largest in terms of volume and 10th largest in terms of value. During 2013-14, pharmaceutical exports stood at Rs 90,000 crore (US$ 14.55 billion) globally.
The Indian chemical industry is also performing well. Basic chemicals and their related products (petrochemicals, fertilisers, paints, varnishes, glass, perfumes, toiletries, pharmaceuticals, etc.) form a very significant part of the Indian economy and account for about 3 per cent of India’s GDP. The Indian chemical industry is the second largest in the world. In 2012-13, India exported dyes and related products worth US$ 1.32 billion, organic chemicals worth US$ 619 million, and agro chemicals worth US$ 967 million.
Petroleum products mainly refer to India’s plastic industry. In 2012–13, exports of Indian plastics stood at over US$ 7.2 billion and have increased at about 20% each year.
The Indian textile and apparel industry is one of the largest in the world with an enormous raw material and manufacturing base. The present domestic textile industry is estimated at about US$ 33billion and unstitched garments comprise US$ 8.3 billion. The industry is a significant contributor to the economy, both in terms of its domestic share and exports; it accounts for a phenomenal 14 per cent of total industrial production, contributes nearly 30 per cent of the total exports and employs around 45 million people.
Coming over to imports, it is noteworthy that Indian imports of non-monetary gold have reduced since 2012. Non-monetary gold refers to an individual’s purchase of gold as against the gold held in the Reserve Bank’s vaults as a reserve asset. Gold imports peaked in 2012, which severely dented the current account balance and weakened the rupee. In late 2013, the RBI stepped in and took corrective measures like raising the import duties on gold. Generally, when inflation is very high (India’s CPI was about 9-10%), people rush to invest in alternative channels. When bank deposits gave you negative real returns, gold seemed like a good option for investment. The astronomical increase (115200%) in the imports of military aircrafts can be ignored as the data is zero for 2009 and about 1.2 billion in 2013.
Note: Industry specific data has been taken from http://www.ibef.org/exports