India is almost an island as far as trade is concerned. There is limited trade by land with the country`s neighbours and the bulk of the trade is seaborne. Ninety percent of India`s international trade by volume and seventy-seven percent by value are carried by sea. India`s exports as a percentage of imports have gradually increased from approximately seventy-five percent in 1990-91 to around eighty-six percent in 2001-2002. India`s exports of merchandise goods during 2002-2003 were valued at US 51.7 billion dollars, thereby crossing the crucial milestone of US 50 billion dollar mark for the first time. Indian maritime trade has been prospering enough, to make it a nation counted amongst the élite. According to World Trade Organization reports for the calendar year 2002, India achieved fifteen percent growth rate in the export of merchandise goods and this growth rate was the second highest in the world, next to China, which achieved twenty-two percent. India being primarily a country with an enormous coastline, Indian maritime trade makes up for the lion`s share in the annual economic growth report.

The Indian Ocean comprises a fifth of the water surface of the earth, peopled by a third of the world`s population. India has been a grand maritime nation with a strategic geographical position in the Indian Ocean. The Indian Peninsula juts into the Indian Ocean, astride the major shipping lanes of the world, which provide the shortest route between the Atlantic and the Pacific Oceans. India`s place among the great maritime nations was well recognised by the country`s foresighted ancestors. Indian maritime trade history is replete with instances, where India`s benevolent influence spread to the East and the West through the nation`s seafaring people and the medium of the oceans. It was with the arrival of the Mughals, the landlocked tribe of Central Asia, that importance of the seas was forgotten. India paid a heavy price for it, becoming a susceptible prey to the advancing maritime colonial power. India derives its potential strength from being strong at sea. India is perhaps the only country whose name has been attached to a great ocean. The country also shares maritime boundaries with seven nations in the Indian Ocean. Its strategic geographic position with a long coastline and island territories provides India with a great advantage in the maritime field.

India`s strategic position in the Indian Ocean is clearly apparent when seen in the context of the massive flow of trade through the sea-lines of communications, which join the major regions of west and east. Seaborne trade passing through Indian Ocean amounted to almost fifteen percent of entire world trade. Nearly 200 ships crossed Malacca strait everyday. Twenty-eight passed through Strait of Hormuz, carrying nearly twenty percent of the world trade in volume. Over half of United States requirement of oil passes through this route. One-third of the total ships in the world and over half of the entire world shipping capacity take passage through these choke points. With Indian Ocean and even the Bay of Bengal administrating and aiding in Indian maritime trade in significant amounts, the country can never fall short into a seaborne business and profit.