Transcript
India – travelling under the radar?
WORKING PAPER
by Ron Sandrey and Hans Grinsted Jensen
tralac Working Paper No. S15WP01/2015 January 2015 Please consider the environment before printing this publication www.tralac.org |
[email protected] | Twitter @tradelawcentre | Copyright © tralac, 2015. Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.
Copyright © tralac, 2015.
Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac
This publication should be cited as: Sandrey, R. and Jensen, H. G. 2015. India – travelling under the radar? Stellenbosch: tralac.
This publication has been financed by The Swedish Embassy Nairobi. The Swedish Embassy Nairobi does not necessarily share the views expressed in this material. Responsibility for its contents rests entirely with the author.
www.tralac.org |
[email protected] | Twitter @tradelawcentre Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.
India – travelling under the radar? tralac Working Paper | S15WP01/2015 | Authors: Ron Sandrey and Hans G. Jensen
Summary and key points Recent tralac research has shown that since 2001 Africa’s overall trade with the old friends (the United States and the European Union in particular) has dramatically declined while, conversely, that with the new friends (BRICs1) is increasing. The intra-African share has remained consistent. While India’s involvement with Africa is less dramatic than China’s, its increasing profile mirrors China’s rise although this is happening with a less public profile. This paper examines India’s global profile and places the Indian rise in an international perspective. Indian exports increased from $44 billion (0.7% of global trade) in 2001 to $337 billion in 2013 (1.9% of global trade). This places it in China’s shadow, but it is nevertheless still impressive. Indian imports increased from 0.8% of the global total in 2001 to 2.5% of the total by 2013. Africa started by taking over 6.4% of Indian exports in 2001 but that rose to just over 10% in 2013. Africa and the United Arab Emirates (UAE) have been star performers as Indian export destinations, while the older economies of the European Union (EU) and the United States (US) are languishing. Mineral fuels head both the recent exports and have shown impressive growth since the 2000 base year. Next are precious metals (gold jewellery exports), followed by vehicles as India becomes a global vehicle exporter of note. The two clothing chapters (HS61 and HS62) have lost at least half of their respective shares in Indian global exports. In a loosely defined manufacturing sector, Africa’s share of Indian exports increased from 8.7% in 2001 to 11.2 % in 2013, while Indian exports to China increased and those to the ‘old’ markets of the EU and US declined in relative, but not absolute, importance. By destination markets, the Indian percentage shares of manufacturing imports into the EU, the US and African markets show that into the EU India’s share increased from an initial 1.4% through to 2.5% (China’s was 11.2% through to 28.0%), India’s share in the US increased from 0.7% in 2001 to 1.5% in 2013 (China’s was 10.7% through to 25%), while for Africa India’s share roughly doubled from 2.1% to 4.7% (China’s increased from an initial 4.5% to the 2013 percentage of 20.6%). China has a market share of between 21% and 28% in each of the three main markets. While India has generally about doubled its market presence over the last few years it is still significantly below the Chinese shares. India recently ranked fifth on the global agricultural exporter table (the EU is regarded as a single source) with an export share that has risen from 1.6% of the global total to a consistent 3.4%. By
1
Brazil, Russia, India and China. 1
India – travelling under the radar? tralac Working Paper | S15WP01/2015 | Authors: Ron Sandrey and Hans G. Jensen
destination, Africa’s share has been the main destination in some years as the EU share declines and the US share fluctuates. The new agricultural destinations are Iran and Vietnam. For Indian imports, there was an abrupt shift in the African share of the Indian market in 2007 to a new consistent level of around 8.5% from an earlier level of around 4.5% or lower. Overall, India’s global growth in recent years is increasing its importance as a world importer. We also examine India’s profile in the global services trade, and report that India’s service exports during 2013 were some $151,386 million (45% of the reported merchandise exports). This means that India’s global share of world service exports increased from 1.14% in 2000 through to 3.26% in 2013. This is apparent for computer and related information sector exports where India represents 18.28 % of global exports in this category. Indian service imports are less than exports, giving India a trade surplus in services of around $25 billion.
The projections In the first section we discuss India’s rise in international trade. The question remains whether this rise will be sustained and indeed what the future may hold. The second section seeks to address these questions and moves beyond simple linear extrapolations by employing a comparative static general equilibrium model. This model takes various known and/or best estimates of macroeconomic variables, shocks and other developments into account to give a projection of the world economy up until 2025. Key assumptions include strong growth from Asian economies and to a slightly lesser extent growth in Africa, and moderate growth in the older economies of the US and Europe. We make use of the pre-release Version 9 Global Trade Analysis Project (GTAP) database with a base year of 2011. We consider that the results for 2025 are the best estimates for likely trade patterns between India and Africa, the EU, the US, China and the rest of the world calculated as the residual. The emphasis is on trade shares and shifts in these shares and we use an aggregation of the GTAP sectors for agriculture, natural resources, manufacturing and service sectors. Our projections suggest that Indian exports will see declining domestic shares of agriculture and natural resources, while in the crucial textiles, clothing and leather sector exports increase but at a modest rate. In the traditional manufacturing sectors Indian exports increase significantly, as do services. It is projected that the percentage of Indian export shares will decline to the US and China while slightly increasing to Africa and the rest of the world. 2
India – travelling under the radar? tralac Working Paper | S15WP01/2015 | Authors: Ron Sandrey and Hans G. Jensen
For imports it is projected that India will increase its demand for particularly agricultural products and to a lesser extent natural resources and manufacturing imports. Overall, the projection is that again there will be a sharp decline in imports from the EU and a lesser decline from the US, but an increase from both Africa and the rest of the world of over two percentage points.
1. Introduction The Trade Law Centre has recently been examining African trade patterns with respect to Africa’s ‘new’ friends, namely the BRIC countries as a group, the ‘old’ friends, namely the traditional trading partners, the EU and the US, and the ‘good’ friends, namely the African countries collectively. Overall, we find that since 2001 Africa’s overall trade with the old friends (and the EU in particular) has dramatically declined while, conversely, that with the new friends is increasing. The intra-African (good friends) share has remained consistent. While within the BRIC partners China is dominant in Africa, we can also see that India is becoming a major trading partner. India’s involvement with Africa is longer standing and less dramatic than China’s, but its increasing profile in a way mirrors China’s rise although this is happening with less of a public profile. Is the Indian growth slipping underneath the radar and travelling in China’s shadow? The objective of this paper is not so much as to detail the Indian rise in Africa or the background on these changes, but rather to examine India’s global profile and place the Indian rise in an international setting by looking at shares of destinations for Indian exports and import shares by global sources. Where is this Indian growth taking place? In addition, we make use of an international trade model to forecast the global trade profile and India’s role in these forecasts to assess what the immediate future may hold for the bilateral IndianAfrican relationship and India’s position as a global trader. We will source our trade data from the International Trade Centre (ITC) and use the Global Trade Analysis Project (GTAP) model prerelease Version 9 for our forecasting.
2. Indian exports – the big picture Table 1 shows the big picture for Indian global trade with the Chinese data also supplied for a perspective. The top part of the table shows exports, firstly in dollars $ (expressed in billions) and then in global shares, while the second half shows the comparable import data. India made impressive 3
India – travelling under the radar? tralac Working Paper | S15WP01/2015 | Authors: Ron Sandrey and Hans G. Jensen
progress in exports: from $44 billion (0.7% of global trade) to $337 billion in 2013 (1.9% of global trade). This is of course very much in China’s shadow, but still impressive. Imports increased from 0.8% of the global total to 2.5% of the total by 2013, with this increase leaving India with a significant global merchandise trade deficit and definitely living in the shadow of the mountain as far as China is concerned. Table 1: Indian and Chinese global trade, $ (billions) and % share comparisons Exporters
2001
2003
2005
2007
2009
2011
2012
2013
Exporters $ (billions) World
6,107
7,463
10,366
13,823
12,388
18,189
18,101
17,995
India
44
59
100
146
177
301
290
337
China
266
438
762
1,220
1,202
1,898
2,049
2,211
Exporters % global shares India
0.7%
0.8%
1.0%
1.1%
1.4%
1.7%
1.6%
1.9%
China
4.4%
5.9%
7.4%
8.8%
9.7%
10.4%
11.3%
12.3%
Importers $ (billions) World
6,300
7,678
10,611
14,090
12,652
18,372
18,424
18,780
India
51
72
141
219
266
462
489
466
China
244
413
660
956
1,006
1,743
1,818
1,950
Importers % global shares India
0.8%
0.9%
1.3%
1.6%
2.1%
2.5%
2.7%
2.5%
China
3.9%
5.4%
6.2%
6.8%
7.9%
9.5%
9.9%
10.4%
Source: ITC
2.1 Indian trade specifically The main destinations for Indian exports are shown in Table 2, with the dollar (billions) values in the upper part of the table and the percentage shares in the lower half. We start with the 2001 year and basically give alternative years through to 2013 along with 2012 to complete the recent picture. Aggregate Africa is shown in the second row of this and most subsequent tables, and the lower part shows that as a destination Africa started at 6.4% of Indian exports but rose to just over 10% in 2013. This means that Africa has been increasing significantly above the average for India (and an increase very similar to that of the fourth place UAE from 2001 to 2013 in both dollar values and $ shares, albeit with higher Indian exports to the UAE from 2009 to 2012). Both the US and the EU have been losing market shares, while China, Singapore, Saudi Arabia and Brazil have all increased their importance but not to the extent that Africa has. In conclusion, both Africa and the UAE Africa have 4
India – travelling under the radar? tralac Working Paper | S15WP01/2015 | Authors: Ron Sandrey and Hans G. Jensen
been major growth markets for India, while the older economies of the EU and the US, although still very important, are languishing. Table 2: Indian global exports, $ (billions) and % shares to destinations Destination
2001
2003
2005
2007
2009
2011
2012
2013
World
43.9
59.4
100.4
145.9
176.8
301.5
289.6
336.6
Africa
2.8
3.6
6.7
12.4
13.3
23.4
27.3
34.1
EU27
10.3
13.5
22.6
31.6
36.3
54.6
48.5
56.1
US
8.4
11.2
16.5
20.1
19.1
32.9
37.2
42.0
UAE
2.6
4.2
8.4
14.5
25.4
37.4
35.8
34.0
China
0.9
2.6
7.2
9.5
10.4
16.7
14.7
16.4
Singapore
0.9
1.7
5.4
6.4
6.8
15.6
13.6
14.2
Hong Kong
2.4
3.4
4.4
5.8
7.2
12.6
11.9
13.7
Saudi Arabia
0.8
1.0
1.7
3.3
3.9
5.1
8.6
12.4
2.1
0.1
0.2
0.2
6.9
18.8
2.4
8.5
Japan
1.6
1.7
2.5
3.3
3.2
5.6
6.4
7.3
Brazil
0.2
0.4
1.0
1.9
1.8
5.4
6.2
6.1
Area n.e.s.
2
% shares of the importers Africa
6.4%
6.1%
6.7%
8.5%
7.5%
7.7%
9.4%
10.1%
EU27
23.6%
22.8%
22.5%
21.7%
20.5%
18.1%
16.8%
16.7%
US
19.2%
18.9%
16.5%
13.8%
10.8%
10.9%
12.8%
12.5%
UAE
5.9%
7.1%
8.4%
9.9%
14.4%
12.4%
12.4%
10.1%
China
2.1%
4.3%
7.2%
6.5%
5.9%
5.6%
5.1%
4.9%
Singapore
2.1%
2.9%
5.4%
4.4%
3.9%
5.2%
4.7%
4.2%
Hong Kong
5.5%
5.8%
4.4%
4.0%
4.1%
4.2%
4.1%
4.1%
Saudi Arabia
1.8%
1.7%
1.7%
2.2%
2.2%
1.7%
3.0%
3.7%
Area n.e.s.
4.7%
0.1%
0.2%
0.2%
3.9%
6.3%
0.8%
2.5%
Japan
3.5%
2.9%
2.5%
2.2%
1.8%
1.9%
2.2%
2.2%
Brazil
0.5%
0.7%
1.0%
1.3%
1.0%
1.8%
2.1%
1.8%
Source: ITC
Table 3 details the Indian exports by product at the HS 2 chapter level. Mineral fuels both head the recent exports and have shown impressive growth since the 2000 base year. These exports replaced second-placed HS 71 (precious metals) – in India’s case gold jewellery exports to the Middle Eastern countries and the US – around 2006, and the rise of fuels has caused the precious metal exports to decline somewhat in overall percentage shares from what otherwise would have been a consistent
2
Not elsewhere specified. 5
India – travelling under the radar? tralac Working Paper | S15WP01/2015 | Authors: Ron Sandrey and Hans G. Jensen
level. Vehicles are in third place, where exports have risen to just over 4% in recent years to ensure that India is a global exporter of note in this sector. Examining the ITC data shows that treating the EU as a single entity India was number 11 on the list of vehicle exporters with a 2013 global export share of 1.0% (just behind Brazil), a rise from just 0.2% in 2000. The other two sectors of note are the two clothing chapters (61 and 62), both of which have lost at least half of their respective shares in Indian global exports. Table 3: Main exports from India by HS chapters, $ (billions) and % shares Description HS
Total $ (billions)
27
Mineral fuel
71
Precious metals
87
2000
2002
2004
2006
2008
2010
2012
2013
42.3
49.3
75.6
121.3
195.1
222.9
297.3
315.1
3.3%
4.8%
8.1%
14.8%
16.3%
17.1%
20.1%
20.9%
18.5%
18.0%
16.8%
13.1%
14.4%
15.5%
14.6%
13.8%
Vehicles
2.0%
2.1%
3.0%
3.0%
3.1%
4.2%
4.1%
4.0%
29
Organic chemical
3.8%
4.0%
4.4%
4.8%
4.1%
3.8%
4.1%
3.9%
84
Machinery, etc.
2.9%
3.4%
3.9%
4.1%
4.2%
3.7%
3.8%
3.8%
30
Pharmaceuticals
2.1%
2.5%
2.5%
2.5%
2.6%
2.7%
3.2%
3.5%
10
Cereals
1.5%
2.6%
2.4%
1.3%
2.0%
1.3%
2.9%
3.4%
85
Elect machinery
2.7%
2.8%
2.6%
3.1%
4.7%
3.9%
3.7%
3.3%
52
Cotton
5.4%
4.2%
3.3%
2.9%
2.3%
3.1%
2.9%
3.2%
72
Iron/Steel
2.8%
2.9%
4.6%
4.3%
4.3%
3.1%
2.6%
3.0%
62
Clothing
8.9%
6.6%
5.0%
4.5%
3.1%
2.7%
2.5%
2.6%
73
Articles iron/steel
2.2%
2.2%
2.7%
2.7%
3.2%
2.9%
2.6%
2.2%
61
Clothing
4.1%
4.3%
3.4%
2.9%
2.4%
2.0%
1.8%
2.0%
39
Plastics
1.4%
1.9%
2.5%
2.2%
1.5%
1.6%
1.6%
1.8%
Source: GTA
2.2 Manufacturing Of particular interest to Africa is the manufacturing sector, and again the interesting question is the extent to which Indian manufacturing exports to non-African markets follow a similar pattern as Indian manufactured exports that are being exported to Africa. We have defined manufacturing a little loosely here as excluding resources (HS chapters 26, 27, 28 and 71) and the main agricultural sectors. These exports are shown in Table 4, and a similar pattern for Africa is apparent in that the global share increased from 8.7% to 11.2 % over the period. Similarly, shares to China increased but those to the UAE stagnated, and again the major ‘old’ markets (the EU and the US) declined in relative, but not absolute, importance. Note that South Africa is a major Indian market in its own right, with 1.9% if Indian exports destined for it in 2013. 6
India – travelling under the radar? tralac Working Paper | S15WP01/2015 | Authors: Ron Sandrey and Hans G. Jensen
Table 4: Indian manufacturing exports, $ (billions) and % shares for destinations Destination World $ billions)
2001
2003
2005
2007
2009
2011
2012
2013
24.5
33.5
54.0
76.3
87.2
139.0
141.0
165.2
Africa
2.1
2.8
4.7
7.2
9.4
14.8
15.8
18.6
EU27
6.6
8.9
14.7
21.3
23.4
33.2
30.4
35.7
US
4.6
5.8
9.8
12.4
12.4
20.0
21.3
23.4
China
0.5
1.6
2.7
3.6
3.6
8.9
9.9
11.8
UAE
1.5
2.2
3.3
4.8
5.3
8.0
8.4
10.5
Singapore
0.6
0.7
1.5
2.0
3.2
6.0
4.3
4.9
South Africa
0.2
0.3
0.8
1.0
1.2
2.4
2.7
3.2
% shares of the destinations Africa
8.7%
8.2%
8.6%
9.4%
10.8%
10.6%
11.2%
11.2%
EU27
27.1%
26.6%
27.3%
27.9%
26.8%
23.9%
21.6%
21.6%
US
18.6%
17.3%
18.1%
16.3%
14.3%
14.3%
15.1%
14.2%
China
1.9%
4.9%
5.0%
4.8%
4.2%
6.4%
7.0%
7.2%
UAE
6.2%
6.5%
6.1%
6.2%
6.1%
5.8%
5.9%
6.4%
Singapore
2.3%
1.9%
2.7%
2.7%
3.6%
4.3%
3.0%
3.0%
South Africa
1.0%
1.0%
1.5%
1.3%
1.3%
1.7%
1.9%
1.9%
Source: ITC
The Indian percentage shares of manufacturing imports (Indian exports) into the EU, the US and Africa are shown in Table 5. Starting with the EU we see that India’s share increased from an initial 1.4% through to 2.5% while China’s share of 11.2% through to 28.0% is around ten times higher. The Indian market share in the US increased from 0.7% in 2001 to 1.5% in 2013, with these figures again very much in the shadow of China’s comparable 10.7% through to the most recent years of just over 25%. For Africa, India’s share just more than doubled from 2.1% to 4.7% while China’s increase from 4.5% to 20.6% is again more dramatic. The pattern is clear: China powered up to a market share of between 21% and 28% in each of the three main markets, while India generally about doubled its market share to a level still significantly below the Chinese shares. It is noteworthy that both the Chinese and Indian patterns are similar across the three markets.
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India – travelling under the radar? tralac Working Paper | S15WP01/2015 | Authors: Ron Sandrey and Hans G. Jensen
Table 5: % shares of Indian and Chinese imports into EU27, US and Africa 2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
EU27 India
1.4%
1.5%
1.6%
1.7%
1.8%
1.9%
2.1%
2.3%
2.4%
2.4%
2.7%
2.4%
2.5%
China
11.2%
13.2%
15.3%
17.0%
19.9%
21.1%
23.2%
24.8%
26.9%
28.9%
28.7%
28.1%
28.0%
US India
0.7%
0.8%
0.8%
0.9%
1.0%
1.1%
1.2%
1.4%
1.4%
1.4%
1.5%
1.6%
1.5%
China
10.7%
12.6%
14.6%
16.6%
18.8%
20.2%
21.7%
22.6%
25.3%
25.6%
25.1%
25.2%
25.7%
Africa India
2.1%
2.2%
2.1%
2.4%
2.7%
3.0%
3.0%
3.1%
3.2%
3.5%
3.9%
4.3%
4.7%
China
4.5%
5.2%
6.3%
8.1%
9.7%
11.6%
12.7%
13.4%
15.0%
16.6%
17.3%
18.9%
20.6%
Source: ITC
2.3 Agriculture Agriculture is another sector of interest for Africa, and, to put India in perspective, Table 6 shows the main global agricultural exporters. With the EU regarded as a single exporter, India ranks at number 5 on the table, nestled in there with its fellow BRIC members3 with an export share that rose from 1.6% of the global total to 3.4%. This is a higher percentage share than India has of the total world trade, and importantly that share has been maintained in recent years. Table 6: Global agricultural exporters, $ (billions) and % shares Exporters World $ (billions)
2001
2003
2005
2007
2009
2011
2012
2013
450
560
692
922
1,010
1,383
1,404
1,452
US
12.7%
11.2%
9.6%
10.1%
10.1%
10.4%
10.5%
10.3%
EU27
43.7%
46.5%
45.8%
44.7%
44.0%
39.5%
38.3%
40.3%
Brazil
3.6%
3.8%
4.6%
4.8%
5.4%
5.9%
5.9%
5.9%
China
3.7%
4.2%
4.3%
4.3%
4.1%
4.6%
4.6%
4.8%
India
1.6%
1.4%
1.6%
1.8%
1.6%
2.5%
3.1%
3.4%
Source: ITC
Table 7 shows the main destinations for Indian agricultural exports. These exports showed significant growth over the period as indicated by the table above. Africa’s share was stable and was indeed the main destination in some years as the EU share declined and the US share fluctuated. We have 3
While the BRIC countries are generally thought of as manufacturing exporters they are also significant agricultural exporters. 8
India – travelling under the radar? tralac Working Paper | S15WP01/2015 | Authors: Ron Sandrey and Hans G. Jensen
included the destination shares for Iran and Vietnam in the lower part of the table to highlight their impressive growth as destinations for Indian agricultural exports. Table 7: Indian agricultural exports, $ (billions) and % shares Importers
2001
2003
2005
2007
2009
2011
2012
2013
World
7,137
7,865
10,769
17,018
16,494
34,411
43,012
49,030
Africa
716
789
1,293
1,942
1,198
3,440
5,151
5,617
EU27
1,380
1,387
1,891
2,405
2,304
3,984
3,954
4,519
China
112
151
424
1,303
992
3,750
4,519
5,701
US
664
651
846
954
957
3,026
6,690
3,757
% share of importers Africa
10.0%
10.0%
12.0%
11.4%
7.3%
10.0%
12.0%
11.5%
EU27
19.3%
17.6%
17.6%
14.1%
14.0%
11.6%
9.2%
9.2%
China
1.6%
1.9%
3.9%
7.7%
6.0%
10.9%
10.5%
11.6%
US
9.3%
8.3%
7.9%
5.6%
5.8%
8.8%
15.6%
7.7%
Iran
0.6%
0.4%
0.6%
0.8%
3.8%
2.7%
3.3%
7.4%
Vietnam
0.7%
1.2%
2.0%
3.7%
5.9%
5.4%
5.0%
6.7%
Source: ITC
2.4 Indian imports The overall picture for Indian imports is shown in Table 8 where the abrupt shift for the African share of the Indian market in 2007 to a new consistent level of around 8.5% can be seen from the earlier level of around 4.5% or lower. Similar increases can be seen in imports from China and the oil exporters of Saudi Arabia, the UAE, Iraq, Kuwait, Venezuela, Qatar and Nigeria (included in the African data) as the global oil prices increased. Conversely, most of this change was at the expense of the EU share and to a lesser extent that of the US. A snapshot of the Indian total import profile is given in Table 9 with 2013 as the reference year. The HS chapter code and the product descriptions are given, with these followed by the 2013 import values in dollars (millions). The next two columns show the Indian growth rates, firstly from 2009 to 2013 and then from 2012 to 2013. The last three columns provide a global perspective with firstly the global growth for 2009-2013 (where the overall Indian growth of 16% is above the global 10%), India’s share in world trade and then the global rankings by both overall and sector.
9
India – travelling under the radar? tralac Working Paper | S15WP01/2015 | Authors: Ron Sandrey and Hans G. Jensen
Table 8: Total Indian imports, $ (billions) and % shares Exporters
2001
World $ (billions)
2003
2005
2007
2008
2009
2010
2011
2012
2013
50.7
72.4
140.9
218.6
315.7
266.4
350.0
462.4
489.0
466.0
Africa
4.8%
4.5%
3.5%
8.4%
8.4%
7.9%
9.0%
8.6%
8.8%
8.5%
EU27
20.4%
19.6%
16.9%
14.8%
13.9%
14.4%
12.1%
11.9%
11.1%
10.6%
China
3.6%
5.0%
7.2%
11.2%
10.0%
11.5%
11.8%
12.0%
11.1%
11.1%
Saudi Arabia
1.0%
0.9%
1.1%
7.6%
7.3%
5.4%
5.8%
6.1%
6.7%
7.9%
UAE
1.8%
2.1%
3.6%
5.4%
6.2%
7.4%
8.8%
7.7%
7.7%
7.1%
Switzerland
6.8%
4.3%
5.0%
4.9%
4.1%
3.8%
6.3%
6.8%
5.9%
5.3%
US
6.4%
7.0%
5.9%
6.5%
7.8%
6.0%
5.5%
4.9%
4.9%
4.8%
Iraq
0.0%
0.0%
0.0%
2.5%
3.0%
2.2%
2.1%
3.8%
4.0%
4.3%
Kuwait
0.2%
0.3%
0.3%
3.0%
3.4%
2.9%
2.6%
3.2%
3.6%
3.8%
Indonesia
1.9%
2.6%
2.1%
2.2%
2.0%
2.9%
2.8%
3.0%
2.9%
3.2%
Venezuela
0.0%
0.0%
0.0%
0.2%
1.3%
0.7%
1.4%
1.3%
2.5%
3.2%
Qatar
0.2%
0.2%
0.6%
0.9%
1.1%
1.6%
1.8%
2.4%
3.4%
3.1%
Nigeria
0.1%
0.1%
0.0%
3.2%
3.2%
2.1%
2.9%
2.9%
2.9%
3.0%
Korea
2.2%
3.3%
3.1%
2.5%
2.6%
3.1%
2.8%
2.7%
2.8%
2.7%
Australia
2.5%
2.8%
3.5%
3.5%
3.0%
4.5%
3.4%
2.9%
2.6%
2.3%
Source: ITC
Table 9: Indian imports, global perspective Indian growth % p.a.
World Growth 200913, % p.a.
Share India %
-5
10
2.5
13
24
-1
16
5.6
4
67,500
12
-17
18
12.4
2
Machinery
31,946
9
-12
8
1.5
18
85
Electrical
29,787
6
0
8
1.2
18
29
Organic chemical
16,921
17
11
9
3.6
8
99
Commodities n.e.s.
11,505
20
-4
27
2.3
8
72
Iron and steel
10,119
6
-26
8
2.5
11
39
Plastics
9,985
17
8
10
1.7
18
15
Fats/oils
9,820
21
-11
11
9.9
2
26
Ores, etc.
8,485
22
31
17
3
5
Code
Description
US$ (millions)
2009- 13
TOTAL
All products
466,046
16
27
Mineral fuels
184,194
71
Precious stone/metal
84
2012-13
Ranking
Source: ITC
10
India – travelling under the radar? tralac Working Paper | S15WP01/2015 | Authors: Ron Sandrey and Hans G. Jensen
Table 10 expands on Indian agricultural imports by showing them by sources. Indonesia is the main source, followed by Malaysia and Africa in aggregate. Note that Tanzania makes the table in its own right. Table 10: Sources of Indian agricultural imports, $ (millions) and % shares Source
2001
2003
2005
2007
2009
2011
2012
2013
World
3,095
4,431
5,323
7,401
10,801
15,748
18,582
17,979
Africa
9.1%
10.8%
11.3%
8.4%
8.5%
9.5%
8.7%
9.0%
EU27
3.7%
4.5%
3.2%
5.3%
2.8%
4.4%
4.1%
3.4%
Indonesia
13.1%
26.3%
23.3%
19.7%
28.3%
33.7%
30.1%
29.5%
Malaysia
14.0%
14.5%
6.0%
2.6%
7.2%
9.9%
14.2%
10.8%
Ukraine
0.3%
0.1%
0.1%
1.3%
3.7%
5.3%
6.5%
6.8%
US
8.6%
6.1%
5.2%
5.6%
5.3%
4.5%
4.2%
5.6%
13.2%
11.2%
10.9%
8.2%
4.9%
6.3%
5.9%
5.2%
Brazil
4.1%
3.1%
9.7%
2.0%
9.9%
1.6%
4.0%
4.2%
Canada
4.7%
2.8%
3.2%
11.8%
5.4%
3.8%
3.0%
4.1%
Myanmar
7.3%
4.9%
3.9%
6.5%
7.9%
3.8%
3.3%
3.5%
China
1.8%
2.4%
3.6%
3.9%
3.3%
4.4%
3.6%
3.2%
Australia
3.8%
1.2%
1.0%
4.0%
1.9%
1.6%
2.4%
3.0%
Tanzania
2.1%
1.8%
1.5%
1.1%
1.7%
1.2%
1.8%
1.8%
Argentina
Source: ITC
2.5 Services Anecdotal evidence suggests that India is becoming a major player in the global services trade, and in this section we will examine this hypothesis and review India’s global profile. Unfortunately, we do not have ready access to bilateral service flows, so we will just present the aggregated Indian profile with respect to global trade and the Indian percentage share of these respective sectors. Table 11 shows Indian service exports, with the top part representing the actual values by sector in dollars (millions) and the lower segment indicating India’s global shares in the same sectors. Note in particular in the top right-hand cell that India’s service exports during 2013 were valued at some $151,386 million. To put this figure in perspective, it represents some 45% of the reported merchandise exports from India during that year. It is an important export sector for India. Perhaps more striking, however, is the lower segment of the table, which shows that India’s global share of world service exports increased from 1.14% in 2000 through to 3.26% in 2013. This is an impressive increase. India’s reputation rests on the computer and related information sector, and here we see that 11
India – travelling under the radar? tralac Working Paper | S15WP01/2015 | Authors: Ron Sandrey and Hans G. Jensen
(a) it currently represents around one-third of India’s service exports ($49.5 billion) but more impressively it represents 18.28% of global exports in this category – a share that it has held since 2008. There are also some impressive increases in categories such as transport and ‘other business service’ that we report without commentary. Table 11: Indian service exports, $ million and % global shares Service label
2000
2002
2004
2006
2008
2010
2012
2013
Indian service exports, $ (millions) Total services
16,685
19,478
38,281
69,730
107,131
116,946
146,144
151,386
Commercial services
16,031
19,125
37,931
69,456
106,745
116,460
145,648
150,926
Transportation
1,979
2,473
4,373
7,561
11,565
13,241
17,482
16,894
Travel
3,460
3,102
6,170
8,634
11,832
14,490
17,972
18,396
Other business services
0
0
12,364
25,262
37,454
34,514
48,060
50,909
Royalties & licence fees
83
20
53
61
148
127
321
445
Insurance services
257
332
842
1,113
1,561
1,781
2,258
2,144
Financial services
276
598
341
2,357
4,291
5,834
5,135
5,935
4,048
6,582
12,133
21,362
35,868
38,996
47,178
49,518
Government, other
654
353
350
274
386
485
495
460
Communications
599
779
1,094
2,181
2,478
1,547
1,647
2,203
Construction services
502
231
516
619
841
526
922
1,219
Personal & recreation
0
0
46
306
707
327
767
1,232
Computer/information
% of global service exports Total services
1.14%
1.19%
1.66%
2.41%
2.74%
3.01%
3.29%
3.26%
Commercial services
1.12%
1.20%
1.69%
2.45%
2.78%
3.05%
3.33%
3.30%
Transportation
0.60%
0.70%
0.88%
1.20%
1.31%
1.66%
1.99%
1.92%
Travel
0.75%
0.64%
0.96%
1.14%
1.23%
1.53%
1.64%
1.59%
Other business services
0.00%
0.00%
2.33%
3.63%
3.93%
3.51%
4.14%
4.43%
Royalties & licence fees
0.09%
0.02%
0.04%
0.04%
0.06%
0.05%
0.11%
0.16%
Insurance services
1.00%
0.77%
1.52%
1.83%
1.88%
1.85%
2.18%
2.14%
Financial services
0.34%
0.62%
0.23%
1.08%
1.45%
2.09%
1.68%
1.80%
Computer/information
9.52%
11.47%
13.22%
17.29%
18.73%
18.85%
18.63%
18.28%
Government, other
2.29%
0.99%
0.68%
0.44%
0.57%
0.72%
0.67%
0.69%
Communications
2.01%
2.26%
2.15%
3.09%
2.56%
1.63%
1.53%
2.00%
Construction services
1.77%
0.68%
1.13%
0.95%
0.80%
0.55%
0.88%
1.30%
Personal & recreation
0.00%
0.00%
0.20%
1.31%
2.44%
1.00%
1.96%
3.11%
Source: ITC
12
India – travelling under the radar? tralac Working Paper | S15WP01/2015 | Authors: Ron Sandrey and Hans G. Jensen
The comparable data for Indian service imports are shown in Table 12. India has a trade surplus in service of around $25 billion, with the total imports of $125,689 million being below the exports of $151,386 million. Transportation is an interesting sector, with nearly half of the Indian imports here, and ‘other business services’ are the only other main imports. Table 12: Indian service imports, $ (millions) and % global shares Service label
2000
2002
2004
2006
2008
2010
2012
2013
Indian service imports, $ (millions) Total services
19,188
21,039
35,641
58,696
88,348
114,455
128,837
125,689
Commercial services
18,898
20,776
35,293
58,222
87,847
113,753
128,133
124,621
Transportation
8,703
8,523
13,233
24,856
42,665
46,455
60,407
57,100
Travel
2,690
2,988
4,816
6,845
9,606
10,490
12,342
11,570
Other business
4,323
4,084
11,693
17,593
20,309
25,496
29,900
27,952
Royalties/licence fees
282
345
611
846
1,529
2,438
3,990
3,904
Insurance services
813
892
1,748
2,671
4,332
5,006
6,415
5,935
Financial services
1,277
1,434
791
1,950
3,545
6,787
4,841
5,532
Computer/information
577
905
932
1,957
3,787
2,532
2,518
2,648
Government, other
290
263
348
474
501
702
704
1,068
Communications
105
1,003
579
606
1,045
1,165
1,028
1,138
Construction
127
601
829
794
704
992
1,094
1,395
0
0
61
104
325
461
542
726
Personal/recreational
% of global service imports Total services
1.30%
1.30%
1.61%
2.14%
2.39%
3.11%
3.06%
2.91%
Commercial services
1.34%
1.33%
1.65%
2.20%
2.45%
3.19%
3.12%
2.95%
Transportation
2.15%
2.08%
2.24%
3.29%
4.08%
4.81%
5.35%
5.18%
Travel
0.63%
0.66%
0.81%
0.99%
1.12%
1.24%
1.25%
1.11%
Other business
1.40%
1.16%
2.50%
3.01%
2.48%
3.05%
3.07%
2.96%
Royalties/licence fees
0.33%
0.36%
0.43%
0.51%
0.65%
0.91%
1.29%
1.31%
Insurance services
2.09%
1.40%
1.91%
2.31%
2.70%
2.93%
3.63%
3.61%
Financial services
3.30%
3.12%
1.22%
1.91%
2.86%
5.68%
3.69%
3.96%
Computer/information
2.03%
2.54%
1.89%
2.80%
3.76%
2.35%
1.95%
1.91%
Government, other
0.54%
0.43%
0.47%
0.52%
0.47%
0.62%
0.67%
1.09%
Communications
0.33%
2.82%
1.23%
0.98%
1.27%
1.40%
1.13%
1.23%
Construction
0.58%
2.11%
2.01%
1.40%
0.79%
1.32%
1.27%
1.85%
Personal/recreational
0.00%
0.00%
0.23%
0.34%
0.92%
1.25%
1.25%
1.85%
Source: ITC
13
India – travelling under the radar? tralac Working Paper | S15WP01/2015 | Authors: Ron Sandrey and Hans G. Jensen
3. The Crystal Ball Analysis for future Indian trade 3.1 Introduction The analysis to date has clearly highlighted the rise of India in international trade. This raises the interesting question as to what the future may hold, and in this section we will undertake an analysis to provide some answers to that question; answers are based upon much more than straight-line extrapolations or pure guesswork. There must, of course, be limits to the rise of India, but this sector will endeavour to give a partial answer to where those limits may be. In particular, we would not expect the future pathway for India to be as dramatic as that projected for the companion analysis of China’s future, but nonetheless India is likely to be of importance to Africa in particular. In undertaking research on the implications of a trade policy change such as a Free Trade Agreement (FTA) using a computer model the standard approach is to programme the model with as many as possible of the known changes, and these include the best estimates of all the macroeconomic changes such as the Gross Domestic Product (GDP) and population forecasts. This then becomes the ’baseline’, and the differences between the so-called baseline scenario and the so-called primary scenario that are being examined (such as an FTA) are therefore the direct results of implementation of the FTA. The baseline is the counterfactual. However, an equally interesting question may be: What are the trade patterns as projected in the baseline that we are using to examine the FTA against? This section uses the GTAP database to assess what the trade profiles for India may look in the foreseeable future given the best information that we currently have. The standard GTAP model is a comparative static general equilibrium model that examines all aspects of an economy. The economic agents (consumers, producers and government) are modelled according to neoclassical economic assumptions, with both producers and consumers maximising profits and welfare respectively, with markets perfectly competitive, and with all regions and activities linked. In a simulation run results are measured as a change in welfare arising from the reallocation of resources and the resulting change in allocative efficiency, as terms of trade effects, as capital accumulation, and as changes in unskilled employment. The database we are using is the pre-release Version 9 GTAP database with the base year of 2011. We then run this baseline by updating the standard database with a projection of the world economy from 2011 to 2025, applying suitable shocks to GDP, population, labour and capital, as well as incorporating important developments, realised or planned, since 2011. 14
India – travelling under the radar? tralac Working Paper | S15WP01/2015 | Authors: Ron Sandrey and Hans G. Jensen
The assumptions for the macroeconomic forecasts that we use are shown in Tables 13 and 14; the main forecast is perhaps the projected GDP growth rates in Table 13. In general these projections predict a continuation of strong growth from both the dynamic Asian economies and, to a slightly lesser extent, growth in Africa, but continued moderate growth in the older economies such as the EU and the US. Intuitively we would expect trade to gravitate towards the stronger growth economies, and this indeed would be a factor in the International Monetary Fund (IMF) projections, themselves in a simultaneous relationship. Therefore these assumptions about the future are crucial. Finally, we must emphasise the role of total factor productivity in driving these results as other tralac research highlights just how important this is, and we also acknowledge that three of the fifteen years that we are forecasting for have already passed. Table 13: GDP growth projections through to 2025 GDP: yearly % growth
IMF April 2014
2012 Total Africa
2014
2016
2018
Total 2020
2022
2025
Yearly
2007-2025
3.5
4.0
4.7
4.6
5.2
5.3
5.4
90.1
4.69
-0.4
1.3
1.7
1.7
2.0
2.5
2.5
26.4
1.69
UK
0.3
2.9
2.4
2.4
2.5
2.5
2.5
37.0
2.27
US
2.8
2.8
3.0
2.6
3.5
3.5
3.5
51.4
3.01
China
7.7
7.5
7.0
6.6
7.0
7.0
7.0
160.3
7.07
India
3.2
5.1
6.5
6.7
7.0
7.0
7.0
206.5
6.46
Total world
3.2
3.6
4.0
3.9
4.1
4.1
4.1
69.8
3.86
EU27
Source: IMF and own projections
More background information for the GTAP model is shown in Table 14 which gives more details of the crucial working assumptions of the model in terms of population growth (which is in turn a major driver of the labour data), capital assumptions and the very important factor, productivity growth. Capital and Total Factor Productivity (TFP) are endogenously determined by the GTAP model and version 9 database. Productivity growth has been the driving force behind both Indian and Chinese expansion in recent years and it is expected to continue to be strong. Not shown is that we have not allowed for an increase in the production of natural resources in the database. In the standard model, gains from allocative efficiency arise from an improved reallocation of resources from less to more productive uses. Terms of trade effects are the consequence of changing export and import prices facing a country. Capital accumulation summarises the long-run welfare consequences of changes in the stock of capital due to changes in net investment, and the long-run 15
India – travelling under the radar? tralac Working Paper | S15WP01/2015 | Authors: Ron Sandrey and Hans G. Jensen
welfare gains from capital accumulation tend to reinforce the short-term welfare gains deriving from allocative efficiency and terms of trade. The welfare effects of changed employment rates are the consequence of changes in the employment of the unskilled labour force due to changes in the real wage. In a situation where the demand for labour increases and thereby the real wage, the number of employees increases, reducing the relative increase in the real wage and thereby increasing the competitiveness of the country’s industries. Table 14: Other GTAP working assumptions Labour
Unskilled
Skilled
Factor
GDP
Pop
force
labour
labour
Capital
productivity
EU27
1.69
0.11
-0.46
-1.10
1.63
2.05
0.23
UK
2.27
0.57
0.33
-1.23
3.30
2.56
0.17
US
3.01
0.79
0.49
-0.33
1.15
4.39
0.70
China
7.07
0.25
0.08
-0.20
2.94
8.21
1.04
India
6.39
1.16
1.75
1.51
4.78
7.60
0.87
Source: IMF and GTAP database
The real value of the GTAP model is that it forces consistency in the global trade system, with that consistency based upon the best information we have. The global trade-offs that happen in ‘real life’ are proxied, and the results at 2025 are the best estimates we have of what trade patterns are likely to be at that time. We examine the GTAP database for 2011 in terms of Indian trade profiles for Africa, the EU, the US and China along with the rest of the world (RoW) as the residual and then compare and contrast that base with the 2025 projections. The emphasis is on trade shares and changes to these shares rather than on the absolute values. We use an aggregation of the GTAP sectors for agriculture to show primary and secondary agriculture (albeit with sugar separately given its special relevance to Africa), natural resources, most of the individual GTAP manufacturing sectors, and an aggregation of the GTAP service sectors. Note that these GTAP sectors do not reconcile with the sectors that we have been using to date.
3.2 The results Given that tralac is undertaking this trade analysis for China as well as for India, we have included both China and India in Table 15 that shows the percentage shares of world trade of both by GTAP sectors at the initial 2011 start and 2025 projections. For Indian exports (left-hand segment) it is 16
India – travelling under the radar? tralac Working Paper | S15WP01/2015 | Authors: Ron Sandrey and Hans G. Jensen
notable that India’s shares for agriculture and natural resources declined between 2011 and the projected 2025 in all four sectors shown. The crucial textiles, namely the clothing and leather (footwear) sectors, are interesting because India’s global importance increases in clothing but not in textiles and footwear. For clothing, India’s global importance increases from 4.2% to 6.7% as it picks up some of China’s decline. However, in the traditional manufacturing sectors, India’s global importance is accentuated with increases in all sectors (except the unimportant lumber), and many of these increases are impressive. While of course India is not the global giant that China is, it becomes an even more significant global player in manufacturing. The vehicles sector is a good example of this as its share almost doubles from 0.7% to 1.3%. Services for China show little change whereas the converse holds for India as service exports rise significantly to be above those from China. Table 15: % shares of world trade for Chinese and Indian by GTAP sectors, 2011 and 2025 Exports Initial 2011 Sectors
Imports Final 2025
Initial 2011
Final 2025
China
India
China
India
China
India
China
India
Primary agriculture
3.5%
2.8%
1.5%
0.4%
12.5%
1.2%
20.2%
4.0%
Secondary agriculture
4.4%
2.1%
2.8%
0.9%
3.9%
1.3%
5.9%
2.7%
Sugar
0.2%
4.9%
0.1%
2.3%
5.2%
0.4%
6.4%
0.8%
Natural Resources
0.6%
0.8%
0.5%
0.6%
15.4%
5.4%
19.0%
7.8%
Textiles
31.3%
5.0%
23.2%
4.4%
5.7%
1.3%
6.9%
1.9%
Clothing
40.2%
4.2%
32.9%
6.7%
1.9%
0.1%
3.0%
0.1%
Leather, etc.
43.7%
2.6%
37.2%
1.1%
2.9%
0.8%
4.0%
1.2%
Lumber
23.0%
0.4%
29.8%
0.4%
4.0%
0.7%
3.7%
1.0%
Paper, etc.
6.2%
0.5%
8.0%
0.8%
9.0%
1.7%
9.3%
1.9%
Petroleum
4.1%
4.3%
5.7%
5.3%
4.3%
2.1%
4.3%
2.5%
Chemicals, rubber, plastic
7.2%
1.6%
9.5%
2.9%
8.6%
2.2%
8.7%
2.6%
20.3%
1.6%
26.3%
2.7%
3.8%
1.5%
3.8%
1.6%
Iron/steel
9.8%
2.0%
10.8%
4.1%
5.8%
2.6%
7.3%
3.1%
Nonferrous metals
3.6%
0.8%
4.4%
2.7%
10.7%
8.7%
12.3%
13.3%
18.9%
1.7%
28.7%
3.6%
3.7%
1.8%
3.4%
2.0%
Vehicles
3.1%
0.7%
5.1%
1.3%
5.6%
0.5%
6.2%
0.6%
Other transport
8.8%
0.9%
14.0%
2.8%
4.5%
1.5%
4.8%
1.4%
Electrical equipment
29.7%
0.4%
34.9%
1.4%
12.0%
1.6%
13.4%
1.8%
Other machinery
14.0%
0.7%
23.2%
2.2%
10.4%
2.0%
10.8%
1.9%
Other manufactures
27.6%
11.7%
31.0%
20.6%
2.1%
2.8%
2.1%
3.0%
3.1%
2.5%
3.0%
3.4%
3.8%
1.9%
5.6%
2.3%
10.5%
1.8%
12.4%
2.7%
7.9%
2.3%
9.5%
3.2%
Non-metal mineral
Fabricated metal
Services Total
Source: GTAP output 17
India – travelling under the radar? tralac Working Paper | S15WP01/2015 | Authors: Ron Sandrey and Hans G. Jensen
For imports (right-hand side), India increased its percentage of agricultural products to more than double the 2011 level, which is a mirror image for the large decline in global agricultural exports. India’s projected economic growth is almost certainly behind the almost 50% (2.4 percentage points) rise in global natural resource imports, and in manufacturing India’s global shares increase in almost all sectors. Global service imports also rise. Overall, the Asian trade trends of the last thirty years or so are showing no signs of changing, although the pace is slowing. We will now turn to a more detailed analysis of the Indian trade forecasts to look at these GTAP sectors by bilateral trade with Africa, the EU, the US and India along with our residual RoW. Note that we did not have Japan in our model run so we are unable to precisely replicate the data from the first section of this paper. We start our presentation with exports and then turn to imports.
3.3 Indian exports Data for the Indian trade projections through to 2025 are shown in Table 16. The upper segment of the table starts by showing on the left-hand side the initial 2011 values for exports to Africa, the US, the EU and China plus RoW; on the upper right-hand side the initial market shares of Indian exports destined for Africa, the US, the EU, China and RoW are shown. The middle segment shows the comparable data for the projected 2025 values (expressed in real 2011 US dollars (millions)) and the new destination shares. Finally, the lower segment of the table shows (1) the differences in export shares by destination for each GTAP segment, (2) the total values relating to the 2011 and 2025 exports by sector and total, and (3) the ratio as measured by final exports over initial exports to show where the main increases derived from. The data is shown by the aggregate GTAP sectors of agriculture, natural resource, TCF (textiles, clothing and footwear), manufacturing (other than TCF), services, and the grand total. The important data is shown in the lower section of the table where the percentage-point differences in destination shares are shown. Overall, the bottom line (literally and figuratively) shows that there is a swing to Africa of 1.1 percentage points and a larger 2.8 percentage points to RoW while the US stays virtually the same. These changes are at the expense of the EU for 2.5 percentage points and China (surprisingly) with a 1.5 percentage-point loss. By sector we can see that agricultural exports from India declined dramatically (to 33% of their 2011 level), and this is an important finding as the earlier section of this paper showed that India is a major global agricultural exporter. Conversely, India’s 18
India – travelling under the radar? tralac Working Paper | S15WP01/2015 | Authors: Ron Sandrey and Hans G. Jensen
global manufacturing exports increased significantly from $165 billion to $564 billion, service exports also increased significantly from $65 billion to $149 billion. Table 16: Projected 2025 export data for India, 2011 $ (millions) and % shares Value of initial exports from India 2011, US$ (millions) & % shares Sectors
Africa
Agriculture Resources TCF Manufacturing Services Total
EU
US
China
RoW
Africa
EU
US
China
RoW
2,926
4,139
3,513
3,471
21,174
8.3%
11.8%
10.0%
9.9%
60.1%
85
1,261
137
11,233
2,457
0.6%
8.3%
0.9%
74.0%
16.2%
2,519
14,956
7,628
912
12,744
6.5%
38.6%
19.7%
2.4%
32.9%
14,889
32,240
27,442
6,612
84,040
9.0%
19.5%
16.6%
4.0%
50.9%
1,396
27,685
15,343
2,669
18,103
2.1%
42.5%
23.5%
4.1%
27.8%
21,815
80,281
54,064
24,896
138,519
6.8%
25.1%
16.9%
7.8%
43.3%
Value of final 2025 exports from India, US$ (millions) and % shares Agriculture Resources TCF Manufacturing Services Total
1,296
797
1,070
1,028
7,570
11.0%
6.8%
9.1%
8.7%
64.4%
180
791
103
10,422
2,395
1.3%
5.7%
0.7%
75.0%
17.2%
4,110
22,003
12,726
1,175
22,064
6.6%
35.4%
20.5%
1.9%
35.5%
54,475
101,547
87,948
28,644
290,975
9.7%
18.0%
15.6%
5.1%
51.6%
3,661
55,897
34,450
8,757
46,581
2.5%
37.4%
23.1%
5.9%
31.2%
63,722
181,035
136,296
50,026
369,585
8.0%
22.6%
17.0%
6.2%
46.2%
Totals & ratio 2011 $ (millions)
Differences in destination shares, % points
Ratio
2025 $ (millions)
Agriculture
2.7
-5.0
-0.9
-1.1
4.3
35,222
0.33
11,760
Resources
0.7
-2.6
-0.2
1.0
1.0
15,173
0.92
13,891
TCF
0.1
-3.1
0.8
-0.5
2.7
38,758
1.60
62,079
Manufacturing
0.7
-1.5
-1.0
1.1
0.8
165,223
3.41
563,589
Services
0.3
-5.0
-0.5
1.8
3.4
65,197
2.29
149,345
Total
1.1
-2.5
0.1
-1.5
2.8
319,576
2.51
800,664
Source: GTAP output
3.4 Indian imports Table 17 moves on to show the comparable data for Indian imports at 2025, with the same format as Table 17. Dramatic as the rise in exports to $800 billion was this still leaves Indian imports of $809 billion just above the export value, although this is a significant trade balance improvement from in the large deficit of $100 billion in 2011. Overall, there is a significant 2.2 percentage point increase in the African share of Indian imports, with the highlight being the 6.3 percentage-points increase in agricultural imports from Africa. The overall increase from RoW is similar to that from Africa, while 19
India – travelling under the radar? tralac Working Paper | S15WP01/2015 | Authors: Ron Sandrey and Hans G. Jensen
there is also an increase of 1.2 percentage points from China. These increases are at the expense of the EU (3.9 points down) and US which dropped 1.2 points. Also notable by sector is the large swing in TCF imports away from China to RoW and to a lesser extent Africa. Thus, from our modelling it is clear that imports are projected to increase to a level that matches exports and thus trade balance parity. By sector, there is a large increase in agricultural imports and a large swing in TCF imports away from China. By overall import sources, there are solid increases from Africa and RoW, a modest increase from China and a large decline away from the EU and a lesser one away from the US. Table 17: 2011 base and projected 2025 import data for India, 2011 $ (millions) and % shares Value of initial imports into India 2011 US$ (millions) Africa
EU
US
China
Initial Import shares from RoW
Africa
EU
US
China
RoW
Agriculture
1,634
717
818
529
14,231
9.1%
4.0%
4.6%
3.0%
79.4%
Resources
15,046
8,960
273
614
69,536
15.9%
9.5%
0.3%
0.7%
73.6%
119
741
196
4,098
2,167
1.6%
10.1%
2.7%
56.0%
29.6%
10,636
44,890
18,863
53,578
121,275
4.3%
18.0%
7.6%
21.5%
48.7%
885
19,952
9,243
1,127
18,880
1.8%
39.8%
18.5%
2.3%
37.7%
28,320
75,260
29,392
59,947
226,089
6.8%
18.0%
7.0%
14.3%
54.0%
TCF Manufacturing Services Total
Value of final 2025 imports into India, US$ (millions & % shares) Agriculture
10,044
3,966
4,372
942
45,908
15.4%
6.1%
6.7%
1.4%
70.4%
Resources
31,260
20,666
711
824
142,646
15.9%
10.5%
0.4%
0.4%
72.7%
621
1,653
425
6,138
6,184
4.1%
11.0%
2.8%
40.9%
41.2%
28,094
52,431
22,923
115,896
223,833
6.3%
11.8%
5.2%
26.2%
50.5%
2,176
34,808
13,669
1,860
37,376
2.4%
38.7%
15.2%
2.1%
41.6%
72,195
113,525
42,100
125,660
455,947
8.9%
14.0%
5.2%
15.5%
56.3%
TCF Manufacturing Services Total
Totals & ratio 2011 $ (millions)
Differences in source shares, % points
Ratio
2025 $ millions)
Agriculture
6.3
2.1
2.1
-1.5
-9.0
17,930
3.64
65,231
Resources
0.0
1.0
0.1
-0.2
-0.9
94,429
2.08
196,108
TCF
2.5
0.9
0.1
-15.1
11.6
7,320
2.05
15,020
Manufacturing
2.1
-6.2
-2.4
4.7
1.8
249,243
1.78
443,177
Services
0.7
-1.1
-3.2
-0.2
3.9
50,087
1.79
89,891
Total
2.2
-3.9
-1.8
1.2
2.4
419,009
1.93
809,427
Source: GTAP output
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