Developing Asian nations major contributor to Indian trade

New Delhi, Sep 3 (UNI) India's merchandise trade has increasingly moved towards developing economies, especially with other Asian countries in tune with the shifts in destination of world trade.

A study conducted by the Reserve Bank of India (RBI) points out that developing economies contribute a major share of 56 per cent of the country's total exports and 52.9 per cent of it's total non-oil imports in 2005-06.

India's trade with the Asian countries has grown faster with these countries than its overall trade growth.

Emerging Asian economies accounted for 22.6 per cnent of India's total exports in 2005-06, as against 15.6 per cet in 2000-01, and 29 per cent of the total non-oil imports, which was 22.1 per cent in 2000-01.

In 2005-06, China emerged as the third major export destination for India and has now become the largest source of imports from India.

Exports to China surged by 19.7 per cent in 2005-06, while imports from the country increased by 51.3 per cent reflecting growing trade relations between the two countries.

Commodity-wise, engineering goods (including metals, metal products, transport equipment and iron and steel), gems and jewellery, petroleum products, chemicals and iron ores constitute India's major exports to Asia.

The major items of India's imports from Asia are electronic goods, pearls, precious and semi-precious stones, chemicals, gold and silver, vegetable oils and non-electrical machinery.

India's increasing trade with developing countries is attributable to trade liberalisation, reduction in tariff barriers, various trade policy measures and regional cooperation efforts.

Emerging Asia has the advantage of geographical proximity and a large market of 45 per cent of the world population and 11 per cent of Gross Domestic Product (GDP).

In recognition of the growing importance of Asian countries in India's foreign trade, the series of nominal and real effective exchange rate indices released by the RBI have been revised to include Chinese renminbi and Hong Kong dollar in the weighing scheme.

Japan being already included, the representation of Asian economies has increased to three out of the total of six countries.

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