Asean+3 replaces European Union as Indias dominant trading partner

New Delhi, Feb 25 | Updated: Feb 26 2005, 05:49am hrs
The Association of South East Asian Nations (Asean) + 3 block has replaced the European Union as Indias dominant trading partner. The Asean+3, which include core members Malaysia, Philippines, Thailand, Laos, Vietnam, Indonesia, Myanmar, Brunei, Cambodia and Singapore, and additional members China, Japan and Korea, accounted for 19.9% of Indias total merchandise trade in 2003-04. The EUs trade share was lower at 19%, while North America accounted for 12.9%.

According to the Economic Survey, China emerged as Indias third largest trading partner overtaking the UK and Belgium in 2003-04. While China accounted for 5% of Indias total trade, Indias top trading partner, the US, accounted for 11.6%, followed by the UAE, whose share in Indias total trade was marginally higher than China at 5.1%.

Indias exports to China increased by 49.6% and its imports from the country rose by 45.2%. The robust growth continued in 2004-05, with exports to China growing by 73.1% and imports from the country increasing by 69.3% in the first seven months of 2004-05.

Another country whose share in Indias trade has increased significantly in 2003-04, contributed by strong growth in exports, is the UAE. Indias export growth to OECD (Organisation for Economic Cooperation and Development) region and other developing country regions slowed down in 2003-04 to 12.3% and 28.3% respectively from 22% and 32% respectively in 2002-03.

Trading Partners
EUs trade share was lower at 19%
China emerged as Indias third largest trading partner overtaking the UK and Belgium
UAEs share also increase significantly
Decline in exports to OECD, Latin American countries
Exports to eastern Europe, especially Hungry and Romania increased
Rise in the share of the OPEC region in Indias exports
Despite a decline in exports to OECD countries, the share of exports to EU was maintained with all major countries in the region like France, Germany, Italy, The Netherlands and the UK registering high growth.

Export to Asia and Africa grew by 32.2% and 23.2% respectively, resulting in increased shares of exports to these regions.

Exports to Latin America was low as exports to Brazil and Mexico, major destinations for India, declined in 2003-04.

Exports to eastern Europe witnessed a turnaround due to higher exports to Hungary and Romania, the survey points out. Trade with South Asian Association for Regional Cooperation region countries was buoyant with export to the region growing by 47.8% and imports sourced from it rising by 24.8% in 2003-04.

However, export growth to this region slowed down to 10.1% in the first seven months of the current financial year, mainly due to lower exports to Bangladesh and Bhutan.

In 2003-04, while high international crude petroleum prices resulted in a rise in the share of the Oil and Petroleum Exporting Countries region in Indias imports, consequent gains in terms of trade for the countries led to an increase in the regions share in Indias exports.