As noted earlier, the increase in India’s exports was largely driven by the increase in exports of ‘Petroleum Products’. In the case of the import of Crude oil, the share of Russia increased from a mere 1.34% in 2017-18 to 19.13% in 2022-23, an increase of almost 15 times.
This is the second part of the two-part series on India’s foreign trade. The first part dealt with the changing trends in exports. In this story, we look at India’s imports and the associated trends. One must be careful in looking at the percentage share, as it might not reflect the actual picture of the absolute value.
Russia becomes the fourth largest import source for India.
In the backdrop of the Russian invasion of Ukraine, and the subsequent cut-off of energy imports from Russia by Western countries, India had emerged as one of the biggest purchasers of crude oil from Russia. The share of imports from Russia in 2012-13 was 0.86% of India’s total imports, which then rose to 1.84% in 2017-18. After a brief decline, the share of Russian imports jumped from 1.61% in 2021-22 to 6.4% in 2022-23, making it the fourth-largest import source for India. It moved up 16 ranks to become the fourth largest, as compared to 2021-22.
Meanwhile, the share of imports from China declined for the third consecutive fiscal, decreasing from 16.53% in 2020-21 to 13.80% in 2022-23. On the flip side, the share of imports from the United Arab Emirates grew for the sixth year straight, rising from 4.67% in 2017-18 to 7.46% in 2022-23.
Mineral oils, Pearls & Electrical machinery account for more than 50% of India’s imports
At a commodity level, ‘mineral fuels, oils, and distillation products’ (hs code 27) account for more than one-third of India’s imports in 2022-23. This category is followed by ‘Pearls, precious stones, metals, coins’ (hs code 71), accounting for 10.35% in 2022-23. The share of this category has been declining since 2020-21 from 13.99% to 10.35% in 2022-23. A similar trend can be seen for ‘electrical machinery and equipment’ (hs code 85), whose share declined from 11.84% to 9.47% during the same period.
On the contrary, the share of fertilizers in total imports has been on the rise from 1% in 2017-18 to 2.15% in 2022-23.
Petroleum oils & crude dominate India’s imports in 2022-23.
Out of the total imports to India, petroleum oils and crude (hs code 2709) account for more than 22%. While the share is higher than the last two fiscal years, it is almost close to the 2018-19 levels. It is then followed by the coal briquettes and solid fuels obtained from coal (hs code 2701), whose share rose from 3.97% in 2020-21 to 6.73% in 2022-23. This is the highest share of this category over this decade. On the flip side, the share of imports of gold (hs code 7108) stood at 4.90% in 2022-23. This is the least in the last decade.
In absolute terms, the imports of gold (hs code 7108) and diamond (hs code 7102) declined in 2022-23 as compared to 2021-22, whereas coal briquettes and solid fuels obtained from coal (hs code 2701) grew by 56% and petroleum oils and crude (hs code 2709) grew by 32% during the same period.
One-fifth of India’s crude oil purchase is from Russia in 2022-23
More than 80% of India’s crude oil requirements are imported. India is also the third-largest importer and consumer of oil worldwide. Most of India’s oil imports come from the Middle East, primarily from Saudi Arabia and Iraq, followed by Nigeria, UAE, and the United States. Together with Russia & Kuwait, these seven countries account for more than eighty percent of India’s crude oil imports.
India has increased its oil purchases from Russia despite pressure and sanctions from Western countries following the Russian invasion of Ukraine. From barely 2% in 2021-22, Russian oil currently makes up about 20% of India’s annual imports of crude. The imports of crude oil from Iraq fell from 24.8% in 2021-22 to 20.7% in 2022-23, whereas the share of imports of crude oil from Nigeria fell from 7.02% to 3.74% during the same period.
Electrical imports from Taiwan doubled in 2022-23
The value of ‘electrical machinery and equipment’ (hs code 85) in the total imports grew by 8% from 62,488 million USD in 2021-22 to 67,636 million USD in 2022-23. Between 2020-21 and 2021-22, the growth was 34%.
On average, the ‘electrical machinery and equipment’ (hs code 85) accounts for almost 10% of the total imports. Out of the total electrical imports, the share of Taiwan almost doubled from 2.76% in 2021-22 to 5.11% in 2022-23. During the same period, the share of China in electrical imports declined from 48.4% to 40.8%.
Similarly, after a massive growth in the share of electrical imports from 2.5% in 2017-18 to 16.6% in 2018-19, the percentage share of imports from Hong Kong declined consecutively for the fourth fiscal year, dropping from 17.69% in 2019-20 to 11.62% in 2022-23.
