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Top 10 importers in FY02 - Views on News from Equitymaster
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  • May 15, 2003

    Top 10 importers in FY02

    For any growing economy, international trade is the most important aspect for growth. Import-Export not only gives an economy a standing in the international market but also serves as a medium to earn more, which becomes a vital ingredient for the future course of an economy. In continuation of our previous article, where we saw the top foreign currency earners for India, in this article we shall take a look at the top foreign currency spenders over the last few years. Here again, we reiterate that the study is done only for listed companies.

    No economy in the world can look inward and be satisfied. In other words, no country cannot be self-sufficient and produce everything it requires. Hence, to match the demand it has to acquire the goods from external sources.

    (Rs m) Mar-94 Mar-02 CAGR (%) % FY02 sales
    Indian Oil Corpn. 112,704 414,747 17.7% 40.5%
    Reliance Industries 8,945 264,440 52.7% 49.4%
    Mangalore Refinery & Petrochemicals 5,748* 45,930 29.7% 84.7%
    Chennai Petroleum Corpn. 9,097 36,248 18.9% 57.8%
    Oil & Natural Gas Corpn. 62,039* 33,377 -7.5% 14.4%
    Steel Authority Of India 16,944 20,726 2.6% 13.2%
    Bharat Heavy Electricals 7,045 14,145 9.1% 20.4%
    Indian Petrochemicals Corpn. 1,831 12,468 27.1% 22.6%
    Wipro 65 11,962 92.1% 34.9%
    Hindustan Lever Ltd. 4,160 11,836 14.0% 52.2%


    Not surprisingly, as per our study, the top 10 importers (listed) in India were largely made up of petroleum and oil companies. Although India imports all sorts of goods, the largest importers have been these companies, as India is woefully short of crude oil resources. Demand for oil and petroleum products has consistently increased over the years, which is apparent from the 18% compounded growth of Indian Oil's imports. Not only that, the compounded annual import growth of the rest of the petroleum companies has been growing at around 20%. This clearly indicates that the consumption of oil related products have been growing at a very healthy rate. But India can only satisfy 30% of its requirements on its own and thus has to import a huge 70% of its crude requirements.

    An interesting thing to note here is that Reliance Industries, which was the top exporter in FY02, is also the second largest importer behind Indian Oil. Its imports have grown at a CAGR of 53% (FY94-FY02), while its exports have grown at 61% during the same period. While its exports have been polypropylene woven fabrics and related products, its imports have largely been crude oil. So Reliance imports the raw materials and after processing them exports the same in the international market.

    Although oil continues to reign supreme as the top imported product in India, other companies like HLL, Wipro, BHEL and SAIL also feature in the top 10. These companies could largely be importing raw materials and new machinery. Raw materials that are probably not available in India and high quality, high performance oriented machinery required for increasing efficiency, which in turn increases productivity.

    We donít foresee the import equation changing much in the coming years, as India will continue to be a key importer of oil and related products. However, as consumers get more sophisticated companies will have to align their products and services as per the global standards, for which technology and machinery import will be crucial.



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