Industrial Performance

Industrial Performance

⇒ The Index of Industrial Production (IIP), measuring industrial performance monitors production in manufacturing, mining and electricity sectors and also in use-based groups such as primary goods, capital, intermediate, infrastructure/construction goods, consumer durables and consumer non-durables. IIP registered a growth rate of 3.8 % on account of growth in electricity generation (5.2%), manufacturing (3.9%) and mining (2.9%) in 2018-19. As per the use based classification, primary goods, capital goods, intermediate, infrastructure/construction goods, consumer durables and consumer non-durables registered growth of 3.5 %, 2.7 %, 0.9%, 7.3 %, 5.5 % and 4.0 % respectively during the same period. IIP registered cumulative growth of 0.5 % during the period April to October 2019-20, over corresponding period of previous year. The Index of Manufacturing, Mining and Electricity sector, grew by 0.5 %, (-) 0.4% and 1.6 % respectively during April to October, 2019-20, over corresponding period of previous year. As per the use-based classification, for the period April to October, 2019-20, primary goods, intermediate goods, and consumer non-durables registered positive growth of 0.2 %, 11.3 % and 4.3 % respectively, whereas, the index of capital goods, infrastructure/construction goods, consumer durables registered negative growth of (-) 12.0%, (-) 2.4 % and (-) 7.0 % respectively.
Index of Industrial Production (IIP)
⇒ NSO compiles the Index of Industrial Production (IIP) using secondary data received from 14 source agencies in various ministries/departments or their attached/ subordinate offices. IIP is released every month in the form of Quick Estimates with a time-lag of 6 weeks as per the Special Data Dissemination Standard norms of IMF.
Eight Core Index (ICI)
⇒ The monthly Index of Eight Core Industries (ICI) measures collective and individual performance of production in selected eight core industries like Coal, Crude Oil, Natural Gas, Refinery Products, Fertilizers, Steel, Cement and Electricity. This is an index of the eight most fundamental industrial sectors of the Indian economy and comprises 40.27 % of the weight in IIP.
Performance of Central Public Sector Enterprises
⇒ According to the Econimic Survey 2021-22, CPSEs are an important constituent of the Indian industry. As on 31.03.2020, 256 CPSEs were operational. The overall net profit of operating CPSEs during 2019-20 stood at Rs. 93,295 crore Contribution of all CPSEs to central exchequer by way of excise duty, GST, corporate tax, dividend, etc. stood at Rs. 3,76,425 crore. The CPSES across sectors employed 14,73,810 persons, of which 9,21,876 were regular employees.
⇒ In accordance with Union Budget 2021-22 announcement, the government has approved a policy of strategic disinvestment of public sector enterprises that will provide a clear roadmap for disinvestment in all nonstrategic and strategic sectors.
Sector wise Performance and Issues in Industry Steel
⇒ The performance of the steel industry is pivotal for the growth of the economy. Despite being hit by COVID-19, the steel industry has bounced back with cumulative production of crude and finished steel in 2021-22(AprilOctober) at 66.91 MT and 62.37 MT, an increase of 25.0% and 28.9% respectively, over corresponding period last year while consumption of finished steel at 57.39 MT increased by 25.0 % over the same period.
⇒ It is important to point out that global steel production has slowed down. The reduction in world output of steel is because of reduced global production. According to press release by World Steel Association (November, 2021) world crude steel production was 143.3 million tonnes (Mt) in November 2021, a 9.9 % decrease compared to November 2020.
Coal
⇒ Coal is the most important and abundant fossil fuel in India and accounts for 55% of the country’s energy need. Coal production increased by 12.24 % in April-October 2021 as compared to (-) 3.91 % in April-October 2020. Overall production of raw coal in India during the year 2020-21 was 716.08 million tonnes (provisional) as compared to 730.87 million tonnes achieved in the previous year 2019-20.
⇒ Despite the push for renewables, as per the Draft National Energy Policy of Niti Aayog, the demand for coal is expected to remain in the range of 1.3-1.5 Billion Tonnes by 2030. It is envisaged to bring about 30000 Ha of additional land (in and around coal mining areas) under green cover by plantation of around 75 million trees by 2030.
⇒ As on 31.03.2021, the PSUs have installed renewable et capacity of 1496 Megawatts and during the next 5 years it is planned to install additional 5560 Megawatts of renewable capacity with substantial carbon offset potential.
Textiles
⇒ The Indian textiles industry is one of the largest in the world with a large raw material base and manufacturing strength across the value chain. The uniqueness of the industry lies in its strength both in the hand-woven sector as well as in the capital-intensive mill sector. The mill sector, with 3,400 textile mills having installed capacity of more than 50 million spindles and 8,42,000 rotors is the second largest in the world. Traditional sectors like handloom, handicrafts and small scale power loom units are the biggest source of employment for millions of people in rural and semi-urban areas.
⇒ The textile industry has inherent linkgages with agriculture, culture and traditions of the country making for its versatile spread of products appropriate for both domestic and the export markets.
⇒ The textile industry contributes to 7% of industry output in value terms of 2% of India’s GDP and to 15% of the country’s export earnings. With over 45 million people employed directly, this industry is one of the largest sources of employment generation in the country.
Silk
⇒ Raw silk production increased from 28,523 MT in 2015-16 to 30,348 MT in 2016-17 registering increase of 6.4% growth. The import substitute bivoltine silk production has increased from 4,613 MTs to 5,266 MTs registering an increase of 14.16%.
⇒ Vanya silk production has increased from 8,045 MTs to 9,075 MTs showing an increase of 12.8%.
⇒ Muga silk has recorded highest ever production of 170 MTs and has set a new momentum of growth.
⇒ According to INDIA 2021, in India, about 97% of the raw mulbery silk is produced in the four states of Karnataka, Andhra Pradesh, Tamil Nadu, West Bengal and the UTS of J & K. Three other commercially important types of silk fall into the category of non-mulberry silks normally-eri; tasar; and muga.
Cotton
⇒ Cotton is one of the most important cash crops in India and the country accounts for around 25% of the total global fibre production. In the raw material consumption basket of the Indian textile industry, the proportion of cotton is around 59%.
⇒ Cotton sustains the livelihood of an estimated 5.8 million cotton farmers and 40-50 million people engaged in related activities such as cotton processing and trade.
⇒ India has the largest area under cotton in the world with around 105 lakh hectares under cotton cultivation which is around 35% of the world area. [INDIA 2021]
⇒ During 2016-17, India’s productivity was 540.80 kg/ha. India has emerged as the largest producer of cotton in the world with production of 345 lakh bales in 2016-17 ay and 2nd largest exporter of cotton.
Jute
⇒ India is the largest producer of jute in the world with an The average production of about 80 lakh bales of raw jute annually.
⇒ Textiles Research Associations (TRA) has developed carbon fibre based space communication system. Low cost modular toilets using jute fibres have been developed.
⇒ A software platform “Jue-SMART” (Jute Sacking Supply Management & Requisition Tool) was implemented for procurement of jute sacking from 2016. [INDIA 2021]
Enterprises
⇒ The Indian economy thrives through the process of creation of enterprises. The MSMEs have been contributing to expansion of entrepreneurial culture through business innovations.
⇒ The contribution of MSMEs in GDP is 33% in manufacturing sector and 45% in exports. It shows the valuable contribution that the MSME sector is making in the economy, both in terms of manufacturing and services.
Seventh Economic Census 
The 7th Economic Census (EC) was conducted in 2019 under the Capacity Development Scheme. As on December 31, 2019, field work was started in 28 states/UTs and will be launched shortly in remaining states/UTs. The data is being collected on a mobile app through door-to-door survey of each household and commercial establishment across the country under the provisions of Collection of Statistics Act, 2008.
No. of MSMEs
⇒ As per the National Sample Survey (NSS) 73rd round, conducted by NSSO in 2015-16, there were 633.88 lakh unincorporated non-agriculture MSMEs, in the country engaged in different econosmic activities excluding the MSMEs registered under some section of Factories Act, 1948; Companies Act, 1956 and National Industrial Classification (NIC) 2008.
Steel
⇒ The Ministry of Steel is responsible for planning and development of iron and steel industry, development of essential inputs such as iron ore, limestone, dolomite manganese ore, chromites, ferro-alloys, sponge iron etc and other related function. Crude steel production has shown a sustained rise since 2013-14 alongwith capacity.
⇒ The industry has been a core pillar of industrial development in the country.
⇒ India’s crude steel capacity has steadily risen to 142 MT at present and India has become the world’s second largest producer of steel (111 MT crude steel production in 2018). husait alory [Source: INDIA 2021]
⇒ India is also leading producer of sponge iron with a host of cost based units located in the material rich states of the country. Over the years, the coal based route has emerged as a key contributor and accounted for 79% of total sponge iron production in the country in 2016-17 (Prov.)
⇒ Capacity in sponge iron making has also increased over the years and stood at 43.4 MT in 2015-16. India has been the world’s largest sponge iron producer every year since 2003 except 2016.
⇒ India is also an important producer of pig iron and has turned out to be a net exporter of pig iron.
Global Ranking of Indian Steel
⇒ Out of a total global crude steel production of 1,029 MT (during Jan-July, 2020), down by 5.1%, India was the 2nd largest crude steel producer (51.89 MT) with a 5.1% share in total world production and a 21.9% decline in production over the same period in 2019.
⇒ China remained the largest crude steel producer in the world accounting for 78% of the Asian and 54% of the world crude steel production.
Sectoral Developments
Textile
⇒ Textile industry is the second largest employment generator in the country, next only to agriculture. In the last decade, close to Rs. 203,000 crores have been invested in this industry with direct and indirect employment of about 105 million people, a major part of which is women. Despite the industry being deeply affected by the lockdown, it has shown a remarkable recovery with positive contribution to growth, as reflected by IIP, of 3.6 % during April- October 2020.
⇒ PM MITRA inspired from 5F’s -farm to fibre; fibre to factory; factory to fashion; fashion to foreign -will strengthen the textile sector by developing integrated large scale and modern industrial infrastructure facility for entire value-chain of the textile industry.
Electronics Industry
⇒ World over, electronics is recognised as a ‘meta-resource’. Electronics industry is the world’s largest and fastest growing industry and is increasingly finding applications in all sectors of the economy. With its impact in developing infrastructure, raising productivity, increasing efficiency in delivery of services, and enabling social transformation, it is accepted as a key enabler in the country’s economic development.
⇒ Government accords high priority to electronics hardware manufacturing. The government has therefore notified the National Policy on Electronics 2019 (NPE 2019) on 25.02.2019 to position India as a global hub for Electronics System Design and Manufacturing (ESDM) by encouraging and driving capabilities in the country for developing core components, including chipsets.
Infrastucture
⇒ Infrastructure is the backbone for any economy. The extent and quality of infrastructure determines the ability of the country to utilize its comparative advantage and enables cost competitiveness. Given the strong backward and forward linkages and the positive externalities that infrastructure generates, it can be a vehicle for social and economic transformation.
National Infrastructure Pipeline (NIP)
⇒ Public Private Partnership in infrastructure has been an important source of investment in the sector. As per the database of the World Bank on private participation in infrastructure, India is ranked second among developing countries both by the number of PPP Projects as well as the associated investments.
⇒ NIP has involved all the stakeholders for a coordinated approach to infrastructure creation in India to boost short-term as well as the potential GDP growth.
National Monetisation Pipeline (NMP)
⇒ NITI Aayog has developed the ‘National Monetisation Pipeline (NMP Volumes 1 & 2)’ in consultation with infrastructure line ministries. Asset monetisation, entails a limited period license/ lease of an asset, owned by the government or a public authority, to a private sector entity for an upfront or periodic consideration.
⇒ Total indicative value of NMP for core assets of the Central Government has been estimated at Rs 6.0 lakh crore over 4-year period (5.4% of total infrastructure investment envisaged under NIP).
Road Transport
⇒ The road network of the country consists of National Highways (NH), State-Highways (SH), District Roads, Rural Roads, Urban Roads and Project Roads of over 63.71 (Provisional) lakh km of roads as on 31 March 2019, which is the second-largest in the world, after the United States with 66.45 lakh kms of roads.
⇒ There has been a consistent increase in the construction of National Highways/roads since 2013-14 with 13,327 kms of roads constructed in 2020-21 as compared to 10,237 kms in 2019-20, indicating an increase of 30.2% over the previous year. In the 2021-22 (till September), 3,824 kms of road network were constructed.
⇒ The extent of road construction per day increased substantially in 2020-21 to 36.5 kms per day from 28 kms per day in 2019-20, a rise by 30.4 % as compared to the previous year.
Railways
⇒ Despite facing the unprecedented COVID related challenges Indian railways (IR) has not only been able to move millions of people but also able to keep national supply chain running. Being the third largest network in the world under single management and with over 68,102 route kms Indian Railways (IR) strives to provide safe, efficient, competitive and world class transport system. An average of 1835 track km per year of new track length has been added through new-line and multi-tracking projects during 2014-2021 as compared to the average of 720 track kms per day during 2009-14.
⇒ IR is also adopting indigenous new technology such as KAVACH, Vande Bharat trains and redevelopment of stations to have safe and better journey experience. During FY21, IR carried 1.23 billion tonnes of freight 2 and 1.25 billion passengers.
⇒ With a continuing focus on safety of passengers the number of consequential train accidents has come down from 59 in 2018-19 to 55 in 2019-20 (pre-Covid) and fur – ther to 22 in the last in 2020-21. In addition, in order to strengthen the agriculture sector, as on 31st December 2021, IR has operated 1,841 Kisan Rail services, transporting approximately 6.0 lakh tonnes of perishables including fruits and vegetables.
⇒ IR is targeting for 100% electrification of its network by December, 2023.
⇒ In order to provide better amenities IR has embarked on providing Wi-Fi internet services at all stations (exBade cluding halt stations). As on 5th December, 2021, total 6,087 Railway Stations have been equipped with Wi-Fi facility.
⇒ In addition to the above projects connecting difficult terrain such as Rishikesh – Karnaprayag line as also the rail network to connect all capitals of north east states are ongoing. Further, a number of infrastructure development initiatives are envisaged in the National Rail Plan (NRP) being prepared by Indian Railways.
Civil Aviation
⇒ India has emerged as one of the fastest growing aviation markets in the world. The domestic traffic in India has more than doubled from around 61 million in 2013-14 to around 137 million in 2019-20, registering a growth of over 14% per annum.
⇒ UDAN is a regional airport development program of the Government of India and part of the Regional Connectivity Scheme (RCS) of upgrading underserviced air routes. Till launching of UDAN in 2016, India had 74 airports having scheduled operations. But, within 4 years under UDAN, four rounds of bidding under RCSUDAN have taken place and 153 RCS airports including 12 water aerodromes & 36 Helipads have been identified for operation of RCS flights. During the last four years after commencement of the scheme, 948 valid awarded routes have been allotted to various airlines and out of which 389 RCS routes connecting 62 unserved and underserved airports (including 6 heliports & 02 water aerodromes) have been operationalized so far.
⇒ With the accelerated pace of vaccine roll-out and easing of travel restrictions globally, Indian aviation sector has started to rebound. Despite the travel restrictions, the total passengers carried in October, 2021 reached 99.58 lakhs which was near 68% of the pre-Covid level (146.25 lakh).
⇒ The total air cargo tonnage carried in October, 2021 reached 2.88 lakh MT which surpassed the pre Covid level (2.81 lakh MT).
Ports
⇒ The capacity of 13major ports which was 871.52 million tonnes per annum (MTPA) at the end of March 2014, has increased by 79% to 1,560.61 MTPA by the end of March 2021. Traffic handled at these ports was to the tune of 672.68 MT during 2020-21, which was 4.6 % lower than that in the previous year on account of the worldwide disruptions in international trade due to the pandemic.
⇒ The average turnround time at these major ports has reduced from 62.11 hours in 2019-20 to 55.99 hours in 2020-21 due to the various measures taken by government to improve the ease of doing business.
⇒ As on 31st December 2021, India had a fleet strength of 1463 vessels with Gross tonnage (GT) of 13,011 thousand compared to 1429 vessels and 12,746 thousand of GT at the end of 2019. However, Indian fleet is just 1.2% of world’s fleet in terms of capacity and carries only 7.8% (for 2018-19) of India’s EXIM trade.
⇒ In order to address the cost disadvantage suffered by Indian flagships, in July 2021 the Union cabinet has approved a scheme providing subsidy support of Rs.1,624 crore to Indian shipping companies in global tenders floated by Ministries and CPSES over five years to promote flagging of merchant ships in India.
⇒ Many initiatives have been taken by the government to improve port governance, augment capacity utilization, enhance port efficiency and connectivity.
⇒ Sagarmala which is a National Programme aimed at accelerating economic development in the country by harnessing the potential of India’s 7,500 km long coastline and 14,500 km of potentially navigable waterways. The Sagarmala projects include port modernization & new port development, connectivity enhancement, port-led industrialization, coastal community development, coastal shipping and Inland water transport. Currently, there are 802 projects worth investment of Rs. 5.54 lakh crore for implementation under the Sagarmala Programme by 2035.
⇒ The Major Port Authorities Act 2021 was notified on 18.2.2021. This act provides for inter alia regulation, operation and planning of major ports in India and vests the administration, control and management of such ports upon the Boards of Major Port Authorities.
⇒ Augmentation in navigation capacity of National Waterway-1 (NW-1) is being implemented since 2018 through the Jal Marg Vikas Project from Varanasi to Haldia stretch of Ganga-Bhagirathi-Hooghly River System to enable large barge movements. Construction of multi-modal terminals at Varanasi and Sahib Ganj have been completed and that of the multimodal terminal at Haldia and the Navigational Lock at Farakka have achieved substantial progress. The other projects such as comprehensive development of NW-2 and NW-16 & Indo-Bangladesh Protocol (IBP) route are proposed to be undertaken for a period of 5 years from 2020-21 to 2024-25.
⇒ There has been a continued increase in traffic and augmentation of capacity of major ports. In the backdrop of COVID-19 the traffic at major ports has suffered, declining by 4.57 % between 2019-20 and2020-21, but capacity of major ports has been rising, though at slower pace in recent years.
Kandla Becomes First Green SEZ
Kandla Special Economic Zone (KASEZ) was awarded IGBC Platinum Rating on July 26, 2021. KASEZ is the First Green SEZ to achieve the IGBC Green Cities Platinum Rating for Existing Cities. IGBC Platinum rating has been awarded for ‘Green master planning, policy initiatives and implementation of green infrastructure’ by CII’s Indian Green Building Council (IGBC).
Pillars of India PM-Gati Shakti
⇒ Another milestone achieved which has heralded a new chapter in governance is the PM Gati Shakti an integrated plan ensuring multi-modal and seamless connectivity for people, goods and services. It covers 16 ministries and infrastructure like Bharatmala, Sagarmala, inland waterways, dry/land ports, UDAN etc. It is also expected to include social infrastructure like hospitals and universities. With continuous improvement in digital infrastructure along with development of economic zones like textile clusters, pharmaceutical clusters, defence corridors, electronic parks, industrial corridors, fishing clusters, agri zones, GATI-SHAKTI will improve connectivity and make Indian businesses more competitive. It will also leverage technology extensively including spatial planning tools with ISRO imagery developed by Bhaskaracharya National Institute for Space Applications and Geoinformatics. This is a constant endeavor to build next generation infrastructure to improve ease of living as well as ease of doing business.
Telecom
⇒ India is the world’s second-largest telecommunications market. The telecommunication sector is one of the most powerful sectors impacting social and economic development of a country.
⇒ The relevance of telecom sector has increased immensely. This can be gauged from the fact that the total telephone subscriber base in India has increased from 933.02 million in March 2014 to 1200.88 million in March 2021.In March 2021, 45 % of subscribers were based in rural India and 55% in urban areas. Internet penetration in the country is increasing steadily with internet subscribers increasing from 302.33 million in March 2015 to 833.71 million in June 2021. While 67.2 % of internet subscribers had narrow- band connections and 32.8 % had broadband connections in 2015, the composition had reversed by June 2021 with only 4 % of subscribers having narrowband and 96 % with broadband connections.
Petroleum, Crude and Natural gas
⇒ Crude oil and condensate production during the year 2020-21 was 30.49 million metric tonnes (MMT), lower than the production level of 32.17 MMT in 2019-20 and 94.3% of the target of 32.32 MMT for 2020-21. India depends on imports to meet more than 80 % of its requirements.
⇒ Natural Gas production during the year 2020-21 was 28.67 billion cubic meters (BCM) as against production of 31.18 BCM in 2019-20 and 85.4 % against the target of 33.57 BCM for 2020-21.
⇒ Crude Oil Processed during the year 2020-21 was 221.77 MMT as against 254.39 MMT in 2019-20, showing achievement of 88.1 % of the target of 251.66 MMT for 2020-21. The shortfall in crude oil processing was mainly due to lower demand of petroleum products due to COVID-19 during 2020-21.
Renewable energy – Solar, Wind, Biomass and small hydro energy
⇒ India has witnessed the fastest rate of growth in renewable energy capacity addition among all large economies, during the last 7.5 years with renewable energy capacity growing by 2.9 times and solar energy expanding by over 18 times.
⇒ Renewable energy (excluding large hydro) constitutes over 24.71% of the country’s installed power capacity and around 10.7 % of the electrical energy generation for year 2020-21. As of 31 October 2021, India’s total renewable energy installed capacity (excluding hydro power above 25 MW) has reached over 103.05 GW.
⇒ During the last 7.5 years, if large hydro is included, the share of renewable energy in electric installed capacity is estimated to be about 38.27 % (as of October 2021) and its share in electric energy generation is estimated to be about 26.96 % (for the month of August 2021). [Source: ES 2021-22]
Power
⇒ The total installed capacity has increased from 3,56,100 MW in March-2019 to 3,70,106 MW in March, 2020. Further, the generation capacity increased to 3,73,436 MW in October-2020 and comprised of 2,31,321 MW of thermal, 45,699 MW of hydro, 6,780 MW of nuclear and 89,636 MW of renewables and others. The capacity addition in the power sector was mainly driven by the Government in the year FY20.
⇒ The decline in energy deficit may be partially attributed to enhanced energy efficiency and improved energy intensity in India. The energy intensity of India (at 2011-12 prices) decreased from 65.6 toes per crore rupees s in FY12 to 55.43 toe per crore rupees in FY19. At the same time, the per capita consumption increased from 0.47 toe in FY12 to 0.58 toe in FY19.
Mining Sector
⇒ Minerals are valuable natural resources that are finite and play a key role in the overall economic development. The mining sector is one of the core sectors of the economy. India produces as many as 95 minerals which include 4 hydrocarbon energy minerals (coal, lignite, petroleum & natural gas), 5 atomic minerals (ilmenite, rutile, zircon, uranium, and monazite), 10 metallic, 21 non-metallic and 55 minor minerals.
⇒ The Gross Value Added (GVA) of the mining and quarrying sector in FY20 was 3,93,102 crores (at current price), accounting for about 2.1 % of the overall GVA during FY20. The production value of the major minerals increased by 2.3 % in FY20 as compared to 22.4% growth in FY19. [Source: ES 2020-21]
National Manufacturing Policy 
⇒ In order to bring about a quantitative and qualitative change and to provide necessary impetus to the manufacturing sector, the National Manufacturing Policy (NMP) was notified with the objective of enhancing the share of manufacturing in GDP to 25% and creating 100 million jobs over a decade or so. The TV Policy is based on the principle of industrial growth in partnership with the states.
⇒ The policy envisages that central government will create the enabling policy framework; provide incentives
for infrastructure development on a Public Private Partnership (PPP) basis through appropriate financing instruments; and state governments will be encouraged or to adopt the instrumentalities provided in it.
⇒ National Investment and Manufacturing Zones (NIMZS) are an important instrumentality of the Policy. These zones have been conceived as large integrated industrial townships with state-of-the-art infrastructure; land use on the basis of zoning; clean roland energy efficient technology; necessary social to infrastructure; and skill development facilities etc., to ob provide a conducive environment for manufacturing industries. have barbagy bo[Source: INDIA 2021]
Make in India 
⇒ According to INDIA 2021, The initiative was launched in September 2014, as a national effort towards making India an important investment destination and a global hub for manufacturing, design and innovation. The programme is based on four pillars namely, new processes, new infrastructure, new sectors and new mindset.
⇒ The initiative has been built on layers of collaborative effort of all stakeholders. Action plans were put in place for 21 sectors covering infrastructure, manufacturing and services. The action plans include initiatives for infrastructure creation; ease of doing business; innovation and R&D; fiscal incentives and skill development.
⇒ Make in India initiative is now focused on 27 sectors-15 manufacturing sectors and 12 champion service sectors. The sectoral plans for manufacturing sectors are coordinated in DPIIT while the sectoral plans for services are coordinated by the Department of Commerce in convergence with the Champion Services Sector initiative.
Startup India
⇒ According to INDIA 2021, Startup India is a flagship initiative of the Government of India, intended to catalyse the startup culture and build a strong and inclusive ecosystem for innovation and entrepreneurship in India. Launched in 2016, Startup India has rolled out several programmes with the objective of supporting entrepreneurs, building up a robust startup ecosystem and transforming India into a country of job creators instead of job seekers. These programmes are managed by a dedicated Startup India team, which reports to DPIIT. Under the Startup India Scheme, eligible companies can get recognised as startups by DPIIT in order to access a host of tax benefits, easier compliance, IPR fast-tracking and other benefits.
Trade Performance
⇒ India’s global trade (sum of merchandise and services exports and imports) reached USD 1,127 billion in FY 2019-20. Imports exceeded exports by USD 77.0 billion.
⇒ India’s overall exports (Merchandise and Services combined) in 2019-20 were USD 526.3 billion, exhibiting a negative growth of (-) 2.2 % over the same period last pel year. Overall imports in 2019-20 were USD 603.1 billion, exhibiting a negative growth of (-) 5.8 % over the same period last year.
Merchandise Exports
⇒ According to INDIA 2021, India is the 18th largest exporter of merchandise goods in the world with a share of 1.7%. In FY 2019-20, India’s total merchandise exports were USD 313.4 billion. Major product categories and their share in export basket in FY 2019-20 are: chemicals and related products (14.37 %), Petroleum and products (13.18 %), gems and jewellery (11.46 %), textiles and allied products (10.76 %) and machinery (9.12 %). Top 5 export destinations and their share in India’s exports are: USA (16.95 %); UAE (9.21 %); China (5.3 %); Hong Kong (3.5%); and Singapore (2.85 %).
Merchandise Imports
⇒ During the FY 2019-20, India’s merchandise imports were valued at USD 474.7 billion. Imports as a percentage of GDP have fallen from 18.1%in FY 2015-16 to 16.5% in FY 2019-20. Top 5 import categories in terms of share in India’s import basket in FY 2019-20 are: petroleum crude and products (27.5%); gems and jewellery (11.47%); electronics items (11.06%); machinery (9.52%); and chemicals and related products (9.33%). The major import sources in 2019-20 were China (13.8%) 19: USA (7.6 %); UAE (6.4 %); Saudi Arabia (5.7%) and Iraq (5 %).
FDI Inflows into Services Sector
⇒ Services sector is the largest recipient of FDI inflows in India. According to the World Investment Report 2021 by the UN Conference on Trade and Development (UNCTAD), India was the fifth-largest recipient of Foreign Direct Investment (FDI) in 2020 improving its rank by four places, from ninth position in 2019.
⇒ In 2020-21, India registered highest ever annual FDI inflows of US$ 81.97 billion. The country has received US$ 43.12 billion FDI inflows in the first six months of 2021-22. FDI equity inflows, i.e., FDI inflows minus re-invested earnings, were US$ 31.15 billion during April-September 2021, growing by 3.8 % over the corresponding period last year.
⇒ During H1 2021-22, services sector received US$ 16.73 billion FDI equity inflows. This is over 29 % lower than the FDI equity inflows into services in the corresponding period last year.
Services exports
⇒ India has a dominant presence in global services exports. It remained among the top ten services exporter countries in 2020, with its share in world commercial services exports increasing from 3.4 % in 2019 to 4.1 % in 2020.
⇒ India’s software exports, with a share of 48.5 % in total services exports, remained relatively resilient during Covid-19 period with higher demand for digital support, cloud services and infrastructure modernisation catering to the new pandemic challenges.
⇒ Among other segments, business services exports increased by 17.1 % in H1 2021- 22, even surpassing the pre-pandemic levels, mainly on account of rise in receipts relating to professional and management consultancy.
Services imports
⇒ India’s services imports exhibited sharper decline of 8.4 % in 2020-21 in comparison with services exports primarily on account of fall in travel and transportation payments.
⇒ During H1 2021-22, growth of services imports was 20.7% on account of relaxation in lockdown restrictions and resumption in domestic economic activity. Among the major sectors, payments for overseas travel rose by over 23 % in H1 2021-22 on YoY basis; however, it still remained far below its pre-pandemic level.
⇒ Despite Covid-19 impacting travel and transport services ne exports in 2020-21, double digit growth in gross exports of services, aided by exports of software, business and transportation services, resulted in an increase of 22.8% in net exports of services in H1 2021-22.
IT BPM Services
⇒ The Information Technology-Business Process Management (IT-BPM) sector is a major segment of India’s services. During 2020-21, according to NASSCOM’s provisional estimates, IT-BPM revenues (excluding e-commerce) reached US$ 194 billion, growing by 2.26 % YoY, adding 1.38 lakh employees.
Ports, Shipping and Waterways Services
⇒ Development of ports is crucial for the economy. Ports handle around 90 % of export-import cargo by volume and 70% by value in India. The total cargo capacity of all the ports has increased to 1,246.86 Million Tonnes Per Annum (MTPA) as of March 2021 from 1,052.23 MTPA as of March 2014.
⇒ Hit by disruptions caused by Covid-19, cargo traffic at India’s ports decreased by 5.4 % during 2020-21, to 1,246.86 MT from 1,317.73 MT during 2019-20. Port traffic has picked up in 2021-22 so far, registering a growth of 10.16 % during April-November 2021 over the same period last year.
⇒ Major ports handled traffic of around 465.4 million tonnes during April-November 2021, growing by 12% over same period last year.

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