Stats, stats and stats!

Recently, I reviewed the statistical details of import and export with two specific countries: Russia and China. These countries are critically important to us from both angles, (a) trade and (b) geopolitical perspective. Let's examine the trade statistics for the year 2023-24:

• The trade deficit with China and Russia combined is $142.26 billion.
• This deficit accounts for 59.7% of our total trade deficit in goods.

What are the five major commodities we import from China?

What are the five major commodities we export to China?

It is important to note that we are importing goods of Chapter 85 in large values from China. Simultaneously, we are also offering incentives under PLI scheme for many products covered under Chapter 85.

["Discrete semiconductor devices including transistors, diodes, thyristors, etc.", "Printed Circuit Boards (PCB), PCB laminates, prepregs, photopolymer films, PCB printing inks", "Sensors, transducers, actuators, crystals for electronic applications", "Passive components including resistors, capacitors, etc. for electronic applications"]

Given the current geopolitical situation, it is uncertain whether we will accept investments from China (in case they offer). We need to decide our commercial approach towards China, keeping in mind our border tensions and the growing co-operation between China and Russia.

What are the five major commodities we import from Russia?

What are the five major commodities we export to Russia?

Regarding Russia, it is well-known that our major imports consist of Chapter 27. The question remains whether we are likely to reduce these imports in the near future. Our exports to Russia are far too less, despite invoicing in INR.

Given the geopolitical tensions between India and China, and the ongoing Russia-Ukraine war, how can we reduce the trade deficit?

On the other hand, there are over hundred countries where our annual exports (all commodities put together) are less than $500 million. What country focus initiatives are we likely to take?

In my observation, our policies tend to be quite generic, except for countries with which we are negotiating FTAs. It is high time for India to start drafting specific policies and implementing effective tools for the development of exports instead of relying on generic policies.

We NEED to focus on Dak Niryat Kendras (Export by post) for the smaller countries of the world. We must reduce regulatory compliances and burden of documentation for e-commerce transactions. We also need to initiate special action on ODOP (One District One Product) scheme. While the Foreign Trade Policy presents a theoretical blueprint for ODOP, I haven’t observed any special efforts in the last one year for actual implementation.

Your views are welcome.