International Trade assumes a great significance in economic development of both developed and developing countries. During 1990s and 2000s, most of the countries liberalized their trade as a part of economic reforms adopted by them and facilitated by the WTO policies. One of the most significance developments in the area of international trade is the emergence of regional groupings and bilateral trade relations in every part of world trading system.
India Pakistan Trade
India Pakistan trade has the potential to increase many fold to scale up if the normal relation establishes. India’s trade with Pakistan has declined from $2.61 billion in 2013 to $2.27 billion in 2017.
Significance of India-Pakistan bilateral trade is diminishing in the recent years because of the following reasons:
- Pakistan has not yet reciprocated Most Favored Nation status for India.
- Poor transportation linkages makes the trade costly
- Rise in informal trade between India and Pakistan i.e. increase in re-routing trade through third country from formal to informal channels.
- Inadequate railway and road transports also sea shipment constraints.
Suggestions for strengthening India Pakistan bilateral trade
- Pakistan should grant the MFN status to India as trade facilitation measure.
- Regularize unofficial trade to increase and flourish official trade
- Improve trade infrastructure
- Ease in the complexities in visa procedures.
- Addressing the issues related to non-tariff measures would improve market access for Pakistan’s exports to India
India Russia Trade
India-Russia trade has grown tremendously from $6.23 billion in 2013 to $10.13 billion in 2017. Due to trade barriers in existence between India-Russia, trade cost between them is greater than any other countries.
India’s exports to Russia grew to $2.14 billion in 2017 from $2.42 billion in 2013 whereas India’s imports from Russia grew from $3.81 billion in 2013 to $7.99 billion in 2017.
Reasons for decelerate trade between India and Russia
- There are various quantitative restrictions imposed by Russia like export licensing for export of various items.
- Sanitary and Phytosanitary measures on import of meat, fish and poultry products etc.
- Import of pharmaceutical products to Russia faces some strict non tariff barriers.
Suggestions for strengthening the India Russia trade
Quantitative restrictions should be eased to further increase the volume of export to Russia so that it is beneficial for both the countries and fear of trade is discarded.
The relationship between the two giants of Asia and the world, has been progressing at a tremendous pace. India and China today represents Asia’s two largest and most dynamic economies. China has been the top trading partners of India whereas India has been in the top ten of China’s trading partners. The trade is tilted more in favor of China and has proved to be unfavorable for India. Products of China have deeply penetrated into the Indian markets than the imports of India in China’s markets. China has exported around $76.2 billion and imported $33 billion in 2017.
The major reason for this is the Bureau of Indian Standards, the body that lays down quality standards for most of the products in the country, has laid down 18,000 standards, but they are all voluntary. This provides an easy passage to low-quality Chinese products to enter into Indian markets despite of imposing anti-dumping duties. The cost price of low quality Chinese products is so low that despite imposing Anti-Dumping duties on 93 Chinese products the unit price remains lower than Indian products. AS a result of which China has been able to enhance its footprint in India to a greater extent.
Suggestions for Strengthening the India China Trade
- Qualifying the quality standards should be made mandatory
- Imposing additional duties on imports of goods from China to curtail the supply
- India is one of the largest manufacturers of generic drugs. But it has not been able to export to China because of China’s Protectionist policies. So steps should be taken to increase the export of medicine and pharmaceutical products.
India and Central Asia
India maintained a crucial commercial and cultural linkage with Central Asian countries since long. India’s export basket to these countries consists of products like pharmaceuticals, apparel, machinery, etc and the imports generally include minerals and primary products, semi finished items and raw material.
Trends in Total trade between India-Central Asian Countries in 2014-17 (USD billion)
Suggestions for Strengthening the India-Central Asia trade
- Increase in opportunities for India to invest in sectors like construction, infrastructure, pharmaceuticals, leather, food processing, information and technology, etc
- Uzbekistan offers an opportunity for cultivation of pulses including kidney beans which are bought my Turkish firms and re-exported to India. Indian Agra-Business such as ITC, Reliance etc should setup commercial agoindustrial complexes in Central Asia.
- Pharmaceuticals represent the largest component of the Indian export basket to Central Asia worth $151.41 million i.e. 28.14% of the total exports. Indian companies should undertake aggressive marketing to expand their market share. It can establish joint ventures and manufacturing units of pharmaceutical products in Central Asia.
- Central Asia is the largest producer of raw hides and semi- processed wet blue skins. Uzbekistan has domestic leather production facilities. Indian leather companies should open tanneries here to convert the raw leather into finished leather products like garments, bags, shoes, etc of the highest quality.
- Central Asian states produce highest quality of cotton. India in this context can set up a few textile plants to manufacture good quality cotton fabrics.
- Many Mediterranean spices like black pepper, coriander, cumin, fenugreek, etc are produced in Central Asia which are highly consumed in India. Increase in imports of such spices will increase the volume of trade between India and Central Asian states.
- Large quantities of Indian tea are consumed in Central Asia especially Kazakhstan (imports 12.61 million kg annually). Indian Tea Exporters Association should take an initiative of setting up a tea factory in Central Asia to offer best quality Indian tea.