Share of India's Exports to Some Major Markets

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India relies heavily on software and services exports, and on intellectual capital-intensive outsourcing, which is unlikely to be exhausted, and with the development of science, technology and knowledge, the potential will continue to increase and is virtually limitless. Thanks to this, the Indian economy has largely escaped the fluctuations of the global economy, and the level of stability is as impressive as the growth rate. As a result, social inequality in India is lower than in other developing countries. The Gini index, which measures income inequality, is only 0.33 in India, compared to 0.45 in China and 0.59 in Brazil.

However, there are still many challenges that India must focus on overcoming in order to move quickly on the path to becoming an economic power. These include the low quality of governance and the effectiveness of the State apparatus, typically the policy in attracting investment capital; large budget deficit (over 5%); high foreign debt (28% of GDP); poor infrastructure; many barriers and limitations to the market economy. There are also some obstacles in both labor laws and trade policies that have limited the expansion of the productive forces for small economic sectors. In addition, India still faces many difficulties due to a relatively rapid population growth rate (1.4%/year), a low literacy rate (66%), poverty that has not been adequately resolved (35% of the population is below the poverty line) and a large gap between the rich and the poor, rising prices, and lack of electricity and water affecting people's lives, especially the poor.

1.2.5.2. Agriculture

In the 1960s, the First Green Revolution took place in India to limit and push back persistent famine and brought about great success, increasing food production from 52 million tons to about 300 million tons in 2005. This was followed by the Second Green Revolution, then the White Revolution with

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The goal is to develop dairy cows and goats to provide high quality, low-cost fresh milk for all people. And the world calls it an intellectual revolution, helping a populous country like India overcome poverty, become a country that ensures enough food and exports.

Agriculture accounted for 17.8% of India's GDP in 2007 and employed about 60% of the working-age population. The agricultural sector also contributed 14.7% to total export earnings and provided raw materials for most industries (textiles, silk, sugar, mills, dairy products).

India is the world's largest producer of jute and jute fibre. It is also the world's largest producer of milk. It is also the world's leading producer of fruits, vegetables, coffee, sugar and spices. In terms of cereals, India ranks second in the world in wheat and rice and first in the world in pulses.

With 60% of the population living on agriculture, the focus of the Government's reforms is not on agriculture (agricultural growth only reached 2.6% in 2007-2008) but on developing one or a few key industries, so job opportunities are not expanding. The unemployment rate is still increasing and a large part of the population in rural areas still has to live in poverty. If the problem is not resolved properly, rural residents will continue to move to cities in search of jobs and income.

1.2.5.3. Industry

India has made huge progress in various industrial sectors and is one of the 10 industrial powers in the world. India's major industrial products, which contribute significantly to the economy, are: textiles, chemicals, food processing, steel, transport equipment, cement, mining, machinery and software. In particular, India has also made impressive achievements in the automobile, motorcycle and electronic products industries such as televisions, refrigerators, etc.

Industrial growth in 2007-2008 was 8.9%, contributing to creating jobs for 12% of the workforce, industry accounted for 29.4% of GDP.

a) Electronics and information technology industry

Electronics and information technology (IT) are the two fastest growing industries in India in terms of both output and export value, with the output value of the two industries increasing from US$ 18.92 billion in 2002-03 to US$ 56.80 billion in 2007-08, an average growth of 20% per year. In 2007-08, exports of electronics and IT products reached US$ 34.28 billion, compared to US$ 29.95 billion in 2006-07, an increase of 14.5%. Of this, software and services exports reached US$ 32 billion in 2007-08, compared to US$ 27.6 billion in 2006-07, an increase of 15.9%. This growth rate was lower than previous years, attributed to the impact of the US financial crisis and the appreciation of the Rupee. In 2006-07, 61% of India's total software exports went to the US, 18% to the UK; IT products accounted for 30% of the world software market.

The “Gray Matter Revolution” in the mid-1990s made India a world computer software superpower. IT is a field where India has a competitive advantage such as a workforce with high IQ, fluent English, and low infrastructure costs. The development of information technology has had a strong impact on the economy and the quality of life of the people. The number of IT professionals in India increased from 284,000 in 1999-2000 to 1.63 million in 2006-2007. In 2007-2008, the information technology industry created direct jobs for 2 million workers and 8 million indirect jobs . The contribution of the information technology industry to GDP increased from 5.2% in 2006-2007 to 5.5% in 2007-2008.

b) Textile industry

The textile industry plays a vital role in the Indian economy. Its production accounts for 4% of GDP and 20% of industrial output.

industry, accounting for 15% of export turnover. The textile industry has a workforce of nearly 38 million people. Currently, cotton is still the dominant material, but India is becoming the second largest producer in the world of silk and is in the list of the top 5 textile producing countries in the world. In 2007, according to the American Textile Manufacturers Institute, India's textile exports to the US reached over 2.5 billion USD while US textile exports to India remained below 25 million USD. Compared to other countries, the Indian textile industry has some unique advantages in having a stable source of raw materials, because India is currently the largest producer of yarn in the world (accounting for 25% of the world market share); is the leading cotton yarn producer.

c) Pharmaceutical industry

In 2007-2008, the pharmaceutical industry achieved domestic revenue of more than 5 billion USD and export revenue of 4.15 billion USD, showing positive results of the industry's development based on modern technology. Currently, domestic pharmaceutical companies have not only provided adequate medicine for the domestic population but also exported pharmaceutical products to other countries in Asia, Africa and Latin America.

d) Gem and jewelry manufacturing industry

This is one of the industries that earns a lot of foreign exchange in India. India's gems and jewellery exports increased from 5.4 billion USD in 1995-1996 to 19.82 billion USD, accounting for 12% of total exports in 2007-2008. This is an industry that Indians are very interested in because it requires a smooth combination of imported raw materials with high productivity and technology of domestic human resources, moreover, there is a huge demand in the international market.

1.2.5.4. Investment

Foreign direct investment (FDI) in India from January to September 2008 reached 29.09 billion USD, up from 13.71 billion USD in the same period last year. Total FDI from August 2001 to September 2008 was 96.425 billion USD. The leading countries investing in India are: Mauritius, Singapore, USA, UK, Netherlands, Japan, Germany, Cyprus, France, United Arab Emirates (UAE). FDI focuses on the main sectors: services (financial and non-financial), telecommunications, construction, real estate, automobiles, electricity, metallurgy, petrochemicals, gas and chemicals.

Along with attracting foreign investment into the country, Indian enterprises are also active in investing abroad in areas where India has strengths such as information technology, mechanical products, chemicals, etc. Currently, Indian corporations invest abroad, mainly through joint ventures or company acquisitions. In 2006, through nearly 150 large purchase and sale agreements, Indian companies acquired companies around the world with a value of up to nearly 20 billion USD. India's main investment markets are mainly countries in the Middle East and Southeast Asia (including Vietnam). India's total investment capital currently abroad (as of December 2007) is 37.5 billion USD. Currently, many countries in the region are taking proactive and positive measures to welcome the investment wave of Indian enterprises.

1.2.5.5. International trade

a) India's trade policy in the current period

By 1991, India had undertaken comprehensive economic reforms, including its trade policy. The new trade policy enacted in 1991 marked a turning point, shifting from a self-sufficient and closed-door policy to an open-door policy, focusing heavily on exports to improve the balance of payments, create foreign exchange for imports, enhance domestic investment capacity and promote trade liberalization. The reform policy has brought about

for the Indian economy to make great strides, helping India become a leading exporter in the region and the world.

However, India is still a large trade protection market in Asia, which has prevented India from fully exploiting its potential and from fully integrating with the world. Therefore, in 2004, to keep up with the trend of global trade liberalization, India introduced a more aggressive trade reform policy than the 1991 policy. This policy is effective for a period of 5 years from 2004 to 2009, basically still based on the 1991 policy, but this policy expands freedom for import and export and pays special attention to the import of goods and services necessary for promoting the economy and offers more specific programs. The 2004-2009 trade policy has the following main contents:

- Implement trade liberalization policies combined with policies to protect domestic production.

- Promote exports, especially high-tech products, but still pay close attention to labor-intensive products to create jobs for people.

- Diversify products and diversify export markets.

- Upgrading technical infrastructure for all sectors of the economy, especially through the import of modern machinery, equipment and technology to increase added value and productivity for each product while maintaining international product quality.

- Relax the State's management of enterprises and create a clean and trustworthy environment to promote business activities of traders in India.

- Simplify administrative procedures, import and export...; reduce non-production costs.

- Based on the structure of prioritized export goods to further rationalize the tax system.

b) Import and export activities

Import and export turnover

Since the strong opening, India's import and export turnover has increased continuously at a rapid rate. If in 1990-1991 this figure was only 18.143 billion USD, then after 10 years of reform, the export value was 44.56 billion USD in 2000-2001, an increase of nearly 2.5 times. After applying the new trade policy in 2004, India's export turnover jumped to 83.5 billion USD and maintained a level of over 100 billion USD for the following years.

Along with export turnover, import turnover also increased rapidly. India always had a trade deficit, only having a trade surplus twice: in 1972-1973: exports reached 2.55 billion USD, imports 2.415 billion USD, surplus 135 million USD and in 1976-1977: exports 5.753 billion USD, imports 5.677 billion USD, surplus 77 million USD, these were all years when India applied the import substitution production strategy. It can be seen that with the increasing import growth rate, even increasing faster than the export growth rate, the trade balance will be in a serious deficit. In fact, in 1990-1991, India had a deficit of just over 5 billion USD and remained around this level until 2000-2001, after which the deficit increased sharply and peaked in 2007-2008 when the trade balance deficit reached nearly 90 billion USD.

In 2007-2008, India's total import-export turnover reached 414.545 billion USD. Of which, India exported 162.983 million USD (accounting for 21.2% of GDP) and imported 251.562 million USD (accounting for 24.3% of GDP). According to WTO statistics, in 2007, India's exports accounted for 1% of the world's total merchandise trade and imports accounted for 1.5%.

Import and export structure

India gives priority to high-tech industries, making them the core of its export structure, creating new and sustainable vitality for export activities. Processed and manufactured goods account for more than 75% of total export value. Main export items: computer software, electronic products, machinery, chemicals, leather products, oil and gas, jewelry, textiles...

India's imports are very large because they are the inputs for production and consumption. India's main imports are machinery, crude oil, coal, pearls, gemstones, gold and silver, fertilizers, chemicals, etc. India's largest import item in the current period is fuel, accounting for more than 30% of import turnover, this figure shows that India is very dependent on external fuel sources. Pearls, gemstones, gold and silver also account for a large proportion of India's imports. Because these are high-value items, India imports a lot to serve the jewelry processing, manufacturing and export industry. In addition, the types of imported goods into India are increasingly diverse because the Indian Government has relaxed import management and many items have been included in the list of freely imported goods.

Import and export market

- Although India's export markets are very diverse, large and developed countries account for a large proportion of India's exports (see Table 1.1). Because Indian products exported to these countries are mainly high-value items such as: software, computer hardware; jewelry, gold... this is consistent with India's export structure and trade policy that prioritizes the export of high-tech products.

Table 1.1. Share of India's export turnover to some major markets

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