Structural Change in Composition of India’s Exports and Imports

Abstract

The main objective of the paper is to analyse the structural change in the composition and direction of India's trade. The paper takes into consideration both the merchandise trade as well as services trade. The period under consideration is of the last two decades i.e. from 2001 to 2018. The composition of merchandise exports has been analysed both product wise as well as Industry wise. It is found that the structure of India's exports has changed over the time, the share of agricultural and resource based products has decreased whereas the share of mineral products, Chemical and Allied industries, as well as Machinery, has increased. There has not been much change in the structure of India's import. ‘Software services’ is the most important component of India's services exports whereas ‘Business services’ is the most important component of India's services imports with the highest share. India has highest merchandise trade deficit with China. It has been suggested that India should strengthen its manufacturing sector by bringing changes in its policies and laws. It is also being suggested that India should properly assess all the implications of joining RCEP before signing any deal, as India is already being in a huge trade deficit with China.