How mobile telephones are fundamentally changing the profile of India’s imports…

Nice piece by Rekha Misra and Anand Shankar of RBI in the April-2019 Bulletin.

….mobile telephones are fundamentally changing the profile of India’s imports. The composition of India’s import basket has largely been dominated by gold and petroleum products. These two commodities, with a combined share of close to 40.0 per cent, have virtually defined the trajectory ofIndia’s overall merchandise imports.

In recent years, however, electronic goods imports increased from a little over US$ 0.9 billion in 1993-94 to US$ 51.5  billion in 2017-18, an annual growth rate of over 15.0 per cent. Consequently, the share of electronic goods increased from less than 4.0 per cent of India’s total merchandise imports to over 11.0 per cent during the same period. In fact, from 2013-14 onwards, electronic goods imports have had a higher share in merchandise imports than gold and currently constitute the second largest import item for India!

This article undertakes an incisive examination of the phenomenon of India’s electronic imports and implications for the viability of India’s external balance. Specifically, the article studies the behavior of imports of mobile phones and parts thereof which lie at the heart of the surge in electronic goods imports. It seeks to highlight the role of policy initiatives in driving the phenomenon and its composition, with longer-term implications for domestic production.

Hmm..

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