Last March 17, the Studies and Research Service of Intesa San Paolo has published a focus on India's current economic situation. The study concerned, in particular, the performance of the exports and cheap imports andperformance of the most important commercial sectors for the Indian economy. Focus author (which is attached) is theeconomist Wilma Vergi.
From the Intesa San Paolo study it is clear how exports from the Asian country returned to growth in the third quarter of 2013 following a slowdown of the same, first in 2009 - at the dawn of the international economic and financial crisis - and again in 2012. According to what is reported in the focus, last year, India trade would have settled around 781 billion dollars with an increase of 0,3% compared to the previous year and with an increase of 8,3% in the export sector and a decrease of 4,5% in the context of imports.
Despite this, the fact remains that the trade balance is still in deficit, with a higher percentage of imports than exports. Respectively, given that trade of $781 billion, imports stood at around $467 billion and exports reached a value of $314 billion. However, the $153 billion deficit narrowed by 23% compared to the previous year even though it was around 7,9% of the GDP.
The trade balance items that justify the excess of imports over exports mainly concern the purchase of minerals (41%), glass and ceramic pearls (16%), machinery (15%), chemical products (8%) and metals (5 %). However, as can be seen from the pages of the same study, energy minerals (imported from Saudi Arabia and the USA), that is, the main item of Indian imports, appear to be present also in the field of exports of the country.
Ultimately, therefore, India would import raw energy minerals and export refined ones (especially in the case of oil). A similar approach would concern also trade in precious stones and metals (in particular of unmounted diamonds, gold and silver, both raw or semi-finished), but also the scope of chemicals and pharmaceuticals. Compared to precious metals (imported from the United States and the Arab Emirates), the Asian republic has for years now held an important share of world exports. In 2012, India's share in precious metal and stone exports was 7% of total global exports.
This participation has helped to make theIndia a point of reference in the processing of the most precious materials used in the field of fine jewellery. The precious metals sector and the chemical and pharmaceutical products sector represent the main voices of the Indian industry to which it is necessary to add, of course, also the textile and clothing sector and, in the export sector, vehicles and products of the agro-food industry, especially cereals, meat, fish and plant extracts.
The countries from which India draws its imports they are mostly placed in Asia (61%), in particular, it is the countries of the Middle East and China that stand out for higher export flows to India (respectively 29% and 11%). These countries are followed by theEurope (with a 20% export share), le Americas (with 11%) and theAfrica (with 9%). As regards, then, the Indian exports, they are broken down as follows: 51,8% to Asia, 11% to NIES countries, 5% Asean6, 19% to the Americas, 17% to the European Union and finally Africa absorbs 6% of exported products Made in India .
From the point of view of national industrial production, the same has experienced in recent years a slowdown phase in its growth rate so as to reach an increase of only 0,1% last January. Lifeblood of the country's entire industrial production continues to be the manufacturing sector. This importance also assumes a positive value thanks to the PMI index which, precisely for the manufacturing sector, was equal to 52,5% last February. The other sectors that continue to have a significant position at the national level are the mining and electricity sectors.
Foreign direct investment attracted by India at the end of 2012 were estimated by UNCTAD (The United Nations Conference on Trade and Development) at around 226 billion dollars and, despite among the BRIC countries, India still ranks last for receiving FDI, however, it is an important figure since it is up by 9,7% compared to foreign investments totaled only four years earlier in 2008.
However, it should be noted that, since 2010, the flow of FDI arriving in India has also come from countries that Vergi defines as "transit", which therefore could almost distort the data at first glance positive with respect to the attraction of FDI by the Indian republic. The Intesa San Paolo analyst, for example, cites the case of Mauritius which, with a share of 37% of total FDI, is today the leading country for Foreign Direct Investments in India.
The Intesa San Paolo study concludes with a brief analysis regarding India's economic relations with our country, whose trade, in 2013, amounted to 6,3 billion euros (down by 10,9% compared to the previous year).
For further information on the commercial and industrial situation in India, please refer to the original focus (attached).
For further information on bilateral economic relations with Italy and the possibilities of exporting and investing in India, see the article of last March 3 entitled "India: exports and investments to be handled with care".
