India’s macroeconomic fundamentals are technically sound. The total exports of goods and services for 2006-07 are US$196.23 bn and the trade deficit (for both goods and services) is US$16.14 bn. Much more attention is focused on infrastructural development to attract Foreign Direct Investment (FDI) and India is already building more highways than any other country in the world. This article discusses the trends in exports and the recent developments in FDI.

India's external sector relating to exports and FDI inflows has been on the move steadily and gradually since the beginning of the liberalization regime. As a result, India's forex reserves have touched an all-time high figure of US$200 bn. The major contributory segments to this figure are the country's exports and Foreign Direct Investment (FDI) inflows into India. In strengthening the Indian economy at the national as well as international level, the government has to make the country's external sector more viable and strong. This step may go a long way in stabilizing the country's external sector. This is possible only if exports and FDI inflows are moving in the right direction. There is a need of continuous rise in exports and FDI inflows on a sustainable basis. This article analyses the emerging trends in India's exports and FDI inflows into India in the current decade.

Since the beginning of the present decade of 2000, the Government of India has been making all-out efforts to give the needed boost to the country's exports. Accordingly, the country's exports have risen from 20.1% to 30.9%. This is an appreciable achievement on the part of the country's external sector. In the year 2002-03, India's exports amounted to US $52.7 bn and as a result of concerted efforts by the government and industry, this figure has crossed the level of US$124.6 bn during 2006-07, registering an increase of 2.4 times in just a span of five years (See Table 1). Keeping in mind the existing trends in exports and operationalization of Special Economic Zones (SEZs), the Government of India, has fixed a target of US$160 bn for the year 2007-08. This means that the government is expecting 28% rise in the country's exports during 2007-08.

Treasury Management Magazine, Foreign Trade in India, Foreign Direct Investment, FDI, Indian Economy, Special Economic Zones, SEZs, Focus Product Scheme, Service Sectors, Gross Domestic Products, GDP, Economic Policies, Consumer Goods and Services, Indian External Sector.