The Hindu Business Line : India dynamic in commercial services, says WTO

India's trade profile
In commercial services: 11th among exporters, 13th among importers.
In merchandise trade: 29th among exporters, 17th among importers.

New Delhi , Nov. 10

Even as India ran a trade deficit of close to $40 billion in 2005, it showed a modest surplus in trade in commercial services of $4 billion and moved up to the11th and 13th slots among the leading exporters and importers in that sphere.

Merchandise trade

In its International Trade Statistics released recently in Geneva, the World Trade Organisation said that among a group of 50 leading exporters in merchandise trade, India has reached 29th position accounting for $95.1 billion, with a share of 0.9 per cent in world trade last year. This is up by 26 per cent compared to the previous year. Among leading importers in world merchandise trade, India has reached 17th slot, accounting for $134.8 billion with a share of 1.3 per cent in world trade.

Commercial services

In commercial services, with its inherent advantages in several services, India has improved its position by accounting for a share of 2.3 per cent in global trade among 40 leading traders last year by reaping receipts of $56.1 billion. In the import of commercial services, India ranks 13th accounting for $52.2 billion with a share of 2.2 per cent. TheWTO describes India as a dynamic exporter among the leading commercial service traders, along with China, Brazil, Poland and Hungary.

EU as one entity

India's ranking improves if the 25-member nation European Union (EU) is taken as a single entity. Thus, India's ranking under this head (excluding intra-EU trade) in world merchandise trade goes from 29th to 20th slot with a share of 1.2 per cent in global trade in goods. This is a 26 per cent increase as compared to 2004. Among leading importers in world merchandise trade, India's ranking goes from 17th slot to 11th slot with a share of 1.7 per cent in global merchandise imports. This is up by 39 per cent as compared to 2004.

Similarly, in commercial services trade, India's exports with EU as one entity and excluding intra-EU trade shows vastly improved ranking. Thus in commercial services, India's export position among the leading countries moves to 6th slot from 11th slot with 2.3 per cent share globally, while in imports its ranking moves down from 13th to 7th place, accounting for 2.2 per cent share globally.

Price factor

The 110-page report gives a synoptic picture of global trade developments across products and regions in 2005. It said price developments exerted a strong sway on global trade patterns last year. The further spurt in prices of fuels and mining products contrasted with the deceleration in export prices for agricultural products and manufactured goods. It said prices of all manufactured goods were held down by the price decline in electronic goods.

Largely due to price developments, merchandise trade expanded faster than commercial service trade for the third year in a row in 2005. The dollar value of world merchandise exports rose by 13 per cent to $10.16 trillion and commercial services exports rose by 10 per cent to $2.41 trillion in 2005.

Among the world's 50 leading merchandise exporters, the major suppliers of fuels and mining products increased their merchandise exports by at least one third; Russian Federation (33 per cent), Saudi Arabia (44 per cent), Iran (35 per cent), and Venezuela (43 per cent), Kuwait (57 per cent) and Nigeria (36 per cent).

China stands out among major traders exporting manufactured goods with an increase of its merchandise exports of 28 per cent in 2005. Iron and steel and chemicals showed an above average trade growth in manufactured goods, while automotive products, clothing and textiles encountered a below average growth in 2005.

However, the WTO report said the phase-out of the Agreement on Textiles and Clothing had a major impact on trade flows in those product groups last year with China, India and Pakistan enhancing their share in global exports of textiles and clothing, while suppliers from South and Central America and Africa losing market share.

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