Import & Export play very important role in the financial department of a country. Because not all countries have the necessary resources and skills to produce certain goods and services. In India there is a Export-Import Development Banks, which act as foreign financial institutions that assist in cross-border trade and investment in business capital. For example, Export-Import Bank of India (EXIM Bank).

• Meaning of Import

Import is something you buy a good or services of another country into your country. And in India in the Financial year of 2020-21 the import was 394.44 billion US dollars.

Below the list of what India Import in the financial year 2021

• Meaning of Export

Export is something that you supply your countries goods and services in to other countries. And in India in the financial year of 2020-21 the export was 291.81 billion US dollars.

Below is the estimated value of commodities exported from India in financial year 2021

• Reasons why India export is low

There are many reasons behind the low export of India

1. Infrastructure : India’s score on the quality of their infrastructure was 68.1 in data firm Statista 2019 ranking of 100 countries. To put this in perspective, top-ranked Singapore scored 95.4. scored runs. India’s underdeveloped transport infrastructure has created many problems for exporters, the major ones being;
   1. Ports– There is a serious problem of congestion in the major ports of India. This may be due to high cargo volumes, but lack of infrastructure such as lack of containers and equipment, outdated shipping support, lack of technical expertise, and poor port maintenance are equally to blame.
   2. Roads – Due to the large population and poor roads, India’s road traffic is among the worst in the world.In a 2018 report by cab-driver Uber, traffic jams in four Indian cities – Delhi, Mumbai, Bengaluru and Kolkata – cost $22 billion annually in terms of fuel consumption, productivity loss, pollution and accidents.
   3. Rail – Indian Railways is one of the five largest rail networks in the world and is suitable for freight transportation. However, India’s rail network is plagued by infrastructure problems such as outdated equipment. This has resulted in delay in loading, poor service and overall efficiency.
2. Credit Access – Financial assistance to Indian exporters is very less as compared to other countries. The following factors are coming in the way of exporters getting trade finance,
   1. Sky-High of finance – Banks and lenders pay a high price for complying with various financial security regulations like Know Your Customer (KYC), Anti-Money Laundering (AML). They often pass the cost burden on to their customers, making trade finance costly for small exporters.
   2. High collateral – To avail trade finance, an exporter has to provide a large collateral, which may be impossible for Ministry of Micro, Small & Medium Enterprises (MSMEs).
   3. Difficult  Procedures-Exporters may also be discouraged to move to trade finance due to complex application processes and heavy documentation requirements.
   4. Lack of information –  they have a lack of aware of export credit schemes and the products available to them or the entities providing them.
3. Heavy process of Document – They should remember that different types of cargo require different types of documents. For example, food and pharmaceutical goods require the production of health and safety certificates. While the number of mandatory documents required for exports to India has been reduced to three , bill of lading, commercial invoice cum packing list and shipping bill, the list of additional documents could be long.
4. Trade barriers –  Average import duty rates in India are much higher than in most developed and emerging economies.

• How important Import and export are –

Countries differ greatly in terms of how important imports and exports are and how important their overall trade balance is to their economies. The growth of the economies of developing countries often results from large-scale exports of goods and raw materials to developed countries. For this reason, mining is usually a major industry in such countries.

• What is Gross Domestic Product (GDP)?

Now you all are thinking that why GDP point is here so GDP is the total market value of the total number of goods and services produced within a country’s domestic borders during a given period.

Formula,                      GDP = C + I + G + X – M

Where,

C = Consumer expenditure

I = Investment expenditure

G = Government expenditure

X = Total exports

M = Total imports

Written by:

Yash Jauhari