World population | 17.5% |
World GDP | 3.0%* |
World goods/services exports | 2.2% |
* Exchange-rate basis, IMF estimate. The alternative purchasing-power parities calculation gives a GDP share of 5.9%.
One day towards the end of April, or perhaps in the early days of May, a handful of births and a few memorial services left India (by the U.N.’s estimates) passing China as the world’s most populous country. (Bharat 1.427 billion; Zhongguo 1.426 billion.) A couple of India-in-the-world observations at this point of transition:
1. People: India’s 1.427 billion people represent a bit more than one in six of the world’s 8 billion. Apart from being a shade above China’s now-gently-declining population, the total is (a) about equal to the population of continental Africa, and (b) 200 million more than the 1.24 billion of all high-income countries combined. Put another way, seven of India’s 28 states and Union Territories would be among the world’s 20 most populous countries.
2. Economy: Indian GDP, now fifth-largest in the world after passing France in 2019 and the U.K. in 2020, is about $3.7 trillion and growing at 5.9% by IMF estimates this year. This puts India at about 3% of the $105 trillion world GDP (with the U.S. at $26.9 trillion, China $19.4 trillion, and the EU $17.8 trillion). Perhaps still modest in comparison to population, but growing faster than all 19 of the other top-20 world economies this year (and also faster than 49 of the world’s top 50, just shaded by the Philippines’ 6.0%). International Monetary Fund forecasters see enough sustained growth for India to reach $5 trillion in 2027, passing both Germany and Japan that year.
3. Trade flows: India’s presence in trade flows remains particularly small. As of 2021, India’s $395 billion in goods exports made up 1.8% of a $22.4 trillion world total, at par with Spain and the United Arab Emirates. Its $240 billion in services exports draws a lot of attention and is in fact larger, but still is only 4% of the $6.0 trillion world services-export total. Some of this reflects geography — particularly the constant turbulence and frequent border closures with Pakistan — but not all; it’s hard to find explanations outside policy for India’s very small trading relationships with the ASEAN and the East African countries on its east and west.
4. Trade policy: India’s contemporary trade diplomacy inherits powerful swaraj (“self-sufficiency”) instincts, and (at least in the view of two generations of frustrated American trade negotiators) puts more energy toward import limits than export goals. As of 2022, India’s tariff rate is the highest among the 164 WTO members — 18.3% by simple applied average according to the WTO’s World Tariff Profiles 2022, or 12.6% by trade-weighted average. India is also the WTO’s most enthusiastic anti-dumping user, with 775 anti-dumping penalties reported from 1995 through 2022, about a sixth of the 4,463 total known worldwide. One index of the consequences is India’s modest overall share of trade; another one is the particularly low level of trade with neighboring countries — about 3% of ASEAN’s goods exchanged, and 5% of sub-Saharan Africa’s. India’s place in services trade is, however, larger — 4.0% of exports, slightly above India’s GDP share but probably still below potential.
The U.N.’s Department of Economic and Social Affairs on a world-population milestone.
The IMF’s World Economic Outlook database tracks and estimates GDP in dollars and by growth rates, imports and exports, and lots more, for all countries.
The WTO reviews Indian trade policy now (or more precisely January 2021; new review coming next year).
India’s Embassy in D.C.
… and the March 2023 U.S.-India Commerce Department/Commerce Ministry joint statement reviews the state of U.S.-India trade and goals for 2024.
Indian Trade policy then:
The Arthasastra, an encyclopedia-type Sanskrit work traditionally ascribed to the Maurya empire’s 4th century B.C. political fixer Kautilya, has a reasonable claim to be not only the world’s oldest political guidebook but also the oldest trade-policy manual (or even the first think-tank product, translating in English to 800 pages on war, administrative organization, tax, natural resource management, and more, complete with bullet-point format). Quick samples:
As a strategist and diplomat, Kautilya has a pessimistic, probably overly reductive premise: any bordering kingdom is your enemy; any neighbor of that kingdom, so long as it doesn’t also border you, is your natural ally. As a human resources theorist, he’s practical and not much inhibited by conventional scruples: “Those who are cruel, lazy, and devoid of any affection for their relatives shall be recruited as poisoners.” On the other hand, K. takes a sensible view of natural resource management (designate state forests and limit their exploitation for wood), and views consumer protection as an important government responsibility. His trade advice is precise, profit- and growth-minded, and divides easily into three parts:
(a) Trade facilitation: A wise ruler will appoint officials responsible to keep international trade routes “free from obstruction by courtiers, state officials, thieves, frontier guards, and herds of cattle.” (Note the assumption that the main obstructors are likely to be the king’s own greedy officials.) Also, set up marketplaces in towns and at crossroads to ensure access to imports.
(b) Import promotion: Importers should get special privileges as suppliers of essential goods. Kautilya recommends (i) exempting the early-India equivalent of the retail and wholesale sectors from taxes imposed on people selling only locally-produced goods, and (ii) allowing them to make 10% profits as opposed to the 5% cap for local business. Offsetting this, he recommended a 20% ad valorem tariff — coincidentally, almost identical to the 18.3% “simple average applied” tariff the WTO reported for India last year — with the uncharacteristically sentimental exceptions of duty-free treatment for goods meant for weddings, dowries, and religious occasions.
(c) Export policy: Here Kautilya is cautious, apparently reflecting the relatively poor information available to rulers about foreign markets and likewise the high level of physical risk involved in moving valuable stuff past the border. Kings should authorize exports, he says, but only careful investigation shows that (i) their likely selling price would bring a profit after netting out the costs of shipbuilding, harbor and/or road fees, tariffs, and payoffs to royals in the receiving kingdom, or (ii) that exports would bring some other (unstated) “economic, political, or strategic” advantage. He forbids exports of metals, armor, weapons, or other national security assets, and advises a strong armed guard for outbound caravans.
Kautilya’s Arthasastra in modern translation.
And now:
The WTO’s Tariff Profiles 2022 catalogs tariff rates in 145 countries and economies around the world. These can go into great detail — simple average bound, “non-agricultural,” peaks, etc. A first approximation (using “simple average applied”) looks like this, with Iran and Sudan as the highest-tariff countries in the list (and perhaps the world) to Hong Kong and Singapore among five zero-tariff economies:
Sudan | 21.6% |
Iran | 20.1% |
India | 18.3% |
Brazil | 13.3% |
Nigeria | 12.1% |
Jamaica | 8.6% |
South Africa | 7.8% |
China | 7.5% |
El Salvador | 6.0% |
Malaysia | 5.6% |
European Union | 5.4% |
Japan | 4.2% |
United States | 3.4% |
Timor-Leste | 2.5% |
Peru | 2.4% |
New Zealand | 1.9% |
Mauritius | 0.8% |
Singapore | 0.0% |
The WTO’s Tariff Profiles 2022.
And the WTO’s anti-dumping statistics.
… Or direct to a count of anti-dumping penalties by country, each year from 1995-2022 and with the full 28-year totals.
Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.
Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.
Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank Progressive Economy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.
Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.
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