An Introduction to India Imports and Exports
India imports and exports goods on a grand scale, and that trend is growing every year as their population and level of technological sophistication increases.Every country engages in the importation of products that they need and want from other nations and they in turn export the products and raw materials that they have in abundance for financial gain.
India Imports at a Glance
The nation of India is the seventh largest in the world in land mass, number ten in the world for the size of their economy by GDP, and the fourth largest international economy in purchasing power parity. India has the second largest labor force in the world and abundant natural resources. India’s economy has grown by about 7.5% yearly since 2000, and that rate is predicted to increase. It is also the fifteenth largest nation in imports and the eighteenth largest in exports worldwide in 2009. This means that India imports and exports are a huge potential market.
Know Your Market and Commodities
In order to effectively import or export, you must clearly understand the products that a country or region offers and be able to evaluate the potential market for those commodities. Will your chosen import or export sell at its destination? Ask yourself some pertinent questions before committing to certain India imports. Is what you want to import available locally for a lower price? Is there an untapped local market for it? Does importing that commodity increase your businesses competitiveness? Select products that will bring a good profit but also a steady demand.
Indian Market Particulars
As with all other nations, India imports are subject to taxation by the national government. Tariffs, or customs duties, are an important part of any nation’s economy, and help curb over-dependence on foreign products. Indian customs duties are 5-40%, depending on the method of entry (land, air or sea) and product type. The country of origin matters too, due to trade agreements with individual nations for lower tariffs. Indian exports are generally free of export tariffs, but some are price regulated, such as basmati rice, which has a minimum foreign sale price.
Indian Importation Rules
The Indian government, under regulations listed in their ITC-HS Codes, regulates India imports (e.g., items imported into India from other countries). India imports codes are very protective of the country’s national industries and so restrict the importation of certain items that might compete with them, such as telecommunications and electronics equipment, spices, textiles, raw materials like rubber and timber, and pharmaceutical products. Gemstones, precious metals, animals, animal fats, seeds, chemicals and beef products are also restricted or banned.
India Imports and Exportation Rules
Indian export regulations are much more liberal, but, similar to India imports rules, they are designed to protect the national economy. Many types of finished products such as clothing, textiles and jewelry, are exported freely, but raw materials such as wood, metals and minerals, as well as agricultural and animal products, are restricted. The reasoning behind this is that the government wants to keep cheaper national resources and raw products available to their own people, rather than becoming dependent upon foreign resources.
What to Import into India
The main things that India imports are cereal grains, edible (food quality) oils, and petroleum-based products. Aside from these, India has a hunger for goods such as home and commercial electronics, computer hardware and software, chemicals, industrial machinery, and precious metals and stone. Additionally, metals for industrial use, such as iron, copper and steel are major India imports. Smaller but lucrative Indian imports are cosmetics products, audio and video media, books, and high-end luxury products, which Indian middle- and upper-class consumers love.
More than 78% of India imports into other countries are manufactured goods, such as clothing, textiles and jewelry and have low entry duties into most other countries, such as the US, due to trade agreements. However, a smaller importer might do better to tap into the small but vital markets for unique Indian products such as spices, certain textiles, teas, carpets, and handicrafts. There is even a substantial demand for “Bollywood” films, Indian music, and food products, as the Indian emigrant populations in other countries increase.
In all, India is a burgeoning market of consumers and a vital source of natural and finished products. Their economy is growing and maturing every year; their purchasing parity will equal that of Japan by 2011, and that of the US by 2045. India imports and exports sell well on the world market, and money can be made on both sides of the market.
If you enjoyed our article on An Introduction to India Imports and Exports see our next article about Import Rules.
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