FII

As per the Economic Survey 2009-10, foreign institutional investors (FIIs) have made record investments in the equity market of the country during 2009. The survey stated that the net FII investment into the equity market stood at US$ 18.1 billion in 2009, in comparison to US$ 11.5 billion in 2008 and US$ 15.5 billion in 2007. The survey further revealed that the number of FII registration also increased to 1,706 during the period, as compared to 1,594 in 2008.

Exports

Better demand in markets in western countries is triggering a surge in India's export figures, which have risen to US$ 16.1 billion in May 2010, up 35.1 per cent year-on-year. India is looking at a target of 15 per cent growth in exports in the fiscal 2010-11. During April-May 2010, Indian exports were recorded at US$ 33 billion, a rise of 35.7 per cent year-on-year. Export figures have shown an increase in the last seven months since November 2009, depicting a steady recovery in the economy.

Commerce secretary, Mr Rahul Khullar has however, indicated that these numbers were also reflective of the low-base effect. Mr Khullar stated that iron ore exports have more than doubled in April-May over a year ago period and oil exports surged too, owing to India's growing refining capacities and increasing external demand. May's strong export performance was mainly on the back of a 31.24 per cent increase in gems and jewellery, which touched US$ 2.46 billion in May.

Imports grew to US$ 27.4 billion in May up by 30.8 per cent as compared to corresponding period last year.

India's exports registered a growth of 36.2 per cent year-on-year (y-o-y) in April 2010, over the corresponding month last year, according to quick estimates by the Ministry of Commerce and Industry. In april 2010, exports increased on the back of higher demand for Indian gems and jewellery, textiles, petroleum, oil and lubricants and engineering.

The sectors which recorded a rise in exports in April 2010 include textile (30 per cent growth), engineering goods (up 16 per cent), marine, petroleum products (80 per cent growth) and gems and jewellery (36 per cent increase). Exports of petroleum products registered an annualised 80 per cent jump in April 2010.

Imports also surged to US$ 27.3 billion in April 2010 posting a growth of 43.3 per cent (y-o-y). Imports were largely driven by growth in manufacturing and increase in domestic demand. Sectors including gems and jewellery, organic chemicals, iron and steel, non-ferrous metals, machinery, transport goods and project imports posted high growth in April 2010, which led to rise in imports.

The surge in imports in the first month of the current fiscal was indicative of the rise in the consumption by the domestic industry. Oil imports rose to US$ 8.1 billion in April 2010 from US$ 4.7 billion in April 2009, while gems and jewellery imports rose 118 per cent, chemicals (47 per cent) and iron and steel (141 per cent).

Meanwhile, exports from the Special Economic Zones (SEZs) grew by 127 per cent during April-December 2009 crossing US$ 32.31 billion. Exports from SEZ during the first nine months of the last fiscal stood at US$ 32.7 billion in comparison to US$ 14.4 billion in the same period last year, stated Dr L B Singhal, Director-General, Export Promotion Council for Export-Oriented Units and SEZs.

During the period, SEZs generated employment for 154,025 people. Further, as on December 2009, total investments in SEZs stood at US$ 27.7 billion. A total of 579 SEZs are being approved in India, out of which 335 are being notified and 101 are operational.

External Sector

The global economic recovery also had its impact on the Indian economy, as visible in its balance of payments (BoP) during October-December 2009. India not only registered robust exports and imports figures, it also showed remarkable growth in its merchandise exports during the period. Further, during the period, trade deficit also witnessed a downfall and stood at US$ 89.5 billion, in comparison to US$ 98.4 billion during October-December 2008.

India's trade relations with several countries also improved significantly.

India is hopeful of growing its bilateral trade with the Gulf countries to US$ 120 billion in 2010-11, an increase of 20 per cent from the US$ 100 billion registered in 2008-09.