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11. The Indian economy in 2011 is far more open to the external sector than it was in 2006 07. India's total trade in goods (exports plus imports) as a percentage of GDP increased from 32.9% in 2006 07 to 39.7% in 2008 09, though it came down to 33.7% the next year as a fallout of the global economic crisis (see Table 3). This increased openness has enhanced productivity and competitiveness, as reflected in India's export performance in recent years.
Table 3
Merchandise trade: exports, imports, trade balance, and trade openness
(US$ billion, unless otherwise specified)
Year Exports Imports Trade balance Trade openness Exports as % of GDP % growth Imports as % of GDP % growth Trade balance as % of GDP Trade as a % of GDP
2004 05 83.5 11.6 30.8 111.5 15.5 42.7 ( ) 28.0 3.9 27.1
2005 06 103.1 12.4 23.4 149.2 17.9 33.8 ( ) 46.1 5.5 30.2
2006 07 126.4 13.3 22.6 185.7 19.6 24.5 ( ) 59.3 6.3 32.9
2007 08 163.1 13.1 29.0 251.6 20.3 35.5 ( ) 88.5 7.2 33.4
2008 09 185.3 15.1 13.6 303.7 24.6 20.7 ( ) 118.4 9.5 39.7
2009 10 178.8 12.9 3.5 288.4 20.8 5.0 ( ) 109.6 7.9 33.7
2010 11 245.9 14.2 37.5 350.7 20.3 21.6 ( ) 104.8 6.1 34.5
Source: India's Trade at a Glance, Department of Commerce, May 2011.
(i) Merchandise exports
12. The growth of India's exports has been robust at over 20% since 2002 03. The global recession only slightly moderated this growth, to 13.6% in 2008 09. The compound annual growth rate (CAGR) of India's merchandise exports during the five year period 2004 05 to 2008 09 was 22% as against 14% during the preceding five year period. However in 2009 10, export growth was negative at ( ) 3.5%, reflecting the effect of the global recession. The Government announced remedial measures in the Union Budget 2009 10 and in the Foreign Trade Policy (2009 14) to address the adverse effects of global developments. These measures, coupled with the

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