Composition of India’s trade with the rest of the world has never remained a constant. Though the composition of trade has undergone changes, the volume of imports continued to be higher than that of exports.

In terms of export commodities. The share of agriculture and allied products has declined, whereas, shares of petroleum and crude products and other commodities have increased. The shares of ore minerals and manufactured goods have largely remained constant since 2009-10. Tougher international competition has resulted in the decline of export of traditional items.

Manufacturing sector wins in terms of total value of export, accounting for about 73.6%. Engineering goods have shown significant growth too.

In terms of import commodities. The earlier foodgrain import was replaced by fertilisers and petroleum. Machine and equipment, special steel, edible oil and chemicals constitute the largest share in India’s import basket. Petroleum has seen a steep rise in import as it is used not just as a fuel but also a raw material in many industries. Pearls and semi-precious stones, gold and silver, metalliferous ores and metal scrap, non-ferrous metals, electronic goods, etc. forms the other major import commodities.

India keeps a net imbalance in terms of foreign trade in commodities, however India’s potential lies in the service sector. India has never been able to fully industrialise its economy, from primary activities (in the 50’s) India’s economy has directly jumped to become a service-dominated economy (by the 1990’s). India has a net positive balance in the in the international exchange of services, which more than offsets the negative balance in commodities.