NCERT Textbook - International Trade Humanities/Arts Notes | EduRev

Humanities/Arts : NCERT Textbook - International Trade Humanities/Arts Notes | EduRev

Created by: Mehtab Ahmed
 Page 1


Unit IV Unit IV Unit IV Unit IV Unit IV
Chapter 11
INTERNATIONAL
TRADE
You have already studied about the various
aspects of International trade in the book
Fundamentals of Human Geography.
International Trade is mutually beneficial as
no country is self-sufficient. India’s
International trade has undergone a sea change
in recent years in terms of volume, composition
as well as direction. Although India’s
contribution in the world trade is as low as one
per cent of the total volume, yet it plays a
significant role in the world economy.
Let us examine the changing pattern of
India’s International trade. In 1950-51, India’s
external trade was worth Rs.1,214 crore, which
rose to Rs. 22,09,270 crore in 2009-10. Can
you calculate the percentage growth in 2009-10
over 1950-51? There are numerous reasons for
this sharp rise in overseas trade, such as, the
momentum picked up by the manufacturing
sectors, the liberal policies of the government and
the diversification of markets.
The nature of India’s foreign trade has
changed over the years (Table 11.1). Though
there has been an increase in the total volume
of import and export, the value of import
continued to be higher than that of exports.
There has also been an increase in trade deficit
over the last couple of years. This increase in
deficit is attributed to the price rise of crude
petroleum which forms a major component of
India’s import list.
Changing P Changing P Changing P Changing P Changing Pa a a a attern of ttern of ttern of ttern of ttern of the the the the the
Composition of Composition of Composition of Composition of Composition of India’ India’ India’ India’ India’s Expor s Expor s Expor s Expor s Exports ts ts ts ts
Source : Economic Survey, 2011-12
Fig. 11.1
2015-16
Page 2


Unit IV Unit IV Unit IV Unit IV Unit IV
Chapter 11
INTERNATIONAL
TRADE
You have already studied about the various
aspects of International trade in the book
Fundamentals of Human Geography.
International Trade is mutually beneficial as
no country is self-sufficient. India’s
International trade has undergone a sea change
in recent years in terms of volume, composition
as well as direction. Although India’s
contribution in the world trade is as low as one
per cent of the total volume, yet it plays a
significant role in the world economy.
Let us examine the changing pattern of
India’s International trade. In 1950-51, India’s
external trade was worth Rs.1,214 crore, which
rose to Rs. 22,09,270 crore in 2009-10. Can
you calculate the percentage growth in 2009-10
over 1950-51? There are numerous reasons for
this sharp rise in overseas trade, such as, the
momentum picked up by the manufacturing
sectors, the liberal policies of the government and
the diversification of markets.
The nature of India’s foreign trade has
changed over the years (Table 11.1). Though
there has been an increase in the total volume
of import and export, the value of import
continued to be higher than that of exports.
There has also been an increase in trade deficit
over the last couple of years. This increase in
deficit is attributed to the price rise of crude
petroleum which forms a major component of
India’s import list.
Changing P Changing P Changing P Changing P Changing Pa a a a attern of ttern of ttern of ttern of ttern of the the the the the
Composition of Composition of Composition of Composition of Composition of India’ India’ India’ India’ India’s Expor s Expor s Expor s Expor s Exports ts ts ts ts
Source : Economic Survey, 2011-12
Fig. 11.1
2015-16
126 India : People and Economy
Study the data in table 11.2 and answer the following
questions :
Why is the export of agricultural and allied products
declining continuously after 1997-98?
After attaining a peak in 1999-2000, why has the export
of manufacturing goods started decreasing?
Draw bar diagram to show the trends of exports of all
items given in the table. Use pen/pencil of different
colours.
The decline in traditional items is largely due
to the tough international competition. Amongst
the agricultural products, there is a great decline
in the exports of traditional items such as coffee,
spices, tea, pulses, etc. though an increase has
been registered in floricultural products, fresh
fruits, marine products and sugar, etc.
Manufacturing sector alone accounted for
68.0 per cent of India’s total value of export in
2010-11. Engineering goods have shown a
significant growth in the export list. China and
other East Asian countries are our major
competitors. Gems and jewellery contributes a
larger share of India’s foreign trade.
Year Exports Imports   Total Trade Deficit
2000-01 203,571 230,873 434444 -27302
2004-05 375,340 501,065 876405 -125,725
2007-08 655,864 1,012,312 1668176 -356,448
2009-10 845,534 1,363,736 2209270 -518,202
Table 11.1 India’s Foreign Trade
Value in Rs. Crores
Source : http://commerce.nic.in/publications/annual-report - 2010-11
Commodities 1997-98 2003-04 2009-2010 2010-11
Agriculture and allied products 18.93 11.8 10.0 9.9
Ore and Minerals 3.03 3.71 4.9 4.0
Manufactured goods 75.83 75.96 67.4 68.0
Crude and petroleum products 1.01 5.59 16.2 16.8
Other commodities 1.2 2.94 1.5 1.2
Table 11.2 : Composition of India’s Export, 1997-2011
(Percentage share in Exports)
Source : Economic Survey 2011-12
As has already been mentioned, the
composition of commodities in India’s
international trade has been undergoing a
change over the years. The share of agriculture
and allied products has declined whereas
shares of petroleum and crude products and
other commodities have increased. The shares
of ore minerals and manufactured goods have
largely remained constant over the years from
1997-98 to 2003-04. The increase in the share
of petroleum products is due to a rise in
petroleum prices as well as increase in India’s
refining capacity.
Study table 11.3 and select major commodities
exported in 2010-1 1 and draw bar diagram.
Changing Patterns of the Composition of
India’s Import
India faced serious food shortage during 1950s
and 1960s. The major item of import at that
time was foodgrain, capital goods, machinery
and equipments. The balance of payment was
2015-16
Page 3


Unit IV Unit IV Unit IV Unit IV Unit IV
Chapter 11
INTERNATIONAL
TRADE
You have already studied about the various
aspects of International trade in the book
Fundamentals of Human Geography.
International Trade is mutually beneficial as
no country is self-sufficient. India’s
International trade has undergone a sea change
in recent years in terms of volume, composition
as well as direction. Although India’s
contribution in the world trade is as low as one
per cent of the total volume, yet it plays a
significant role in the world economy.
Let us examine the changing pattern of
India’s International trade. In 1950-51, India’s
external trade was worth Rs.1,214 crore, which
rose to Rs. 22,09,270 crore in 2009-10. Can
you calculate the percentage growth in 2009-10
over 1950-51? There are numerous reasons for
this sharp rise in overseas trade, such as, the
momentum picked up by the manufacturing
sectors, the liberal policies of the government and
the diversification of markets.
The nature of India’s foreign trade has
changed over the years (Table 11.1). Though
there has been an increase in the total volume
of import and export, the value of import
continued to be higher than that of exports.
There has also been an increase in trade deficit
over the last couple of years. This increase in
deficit is attributed to the price rise of crude
petroleum which forms a major component of
India’s import list.
Changing P Changing P Changing P Changing P Changing Pa a a a attern of ttern of ttern of ttern of ttern of the the the the the
Composition of Composition of Composition of Composition of Composition of India’ India’ India’ India’ India’s Expor s Expor s Expor s Expor s Exports ts ts ts ts
Source : Economic Survey, 2011-12
Fig. 11.1
2015-16
126 India : People and Economy
Study the data in table 11.2 and answer the following
questions :
Why is the export of agricultural and allied products
declining continuously after 1997-98?
After attaining a peak in 1999-2000, why has the export
of manufacturing goods started decreasing?
Draw bar diagram to show the trends of exports of all
items given in the table. Use pen/pencil of different
colours.
The decline in traditional items is largely due
to the tough international competition. Amongst
the agricultural products, there is a great decline
in the exports of traditional items such as coffee,
spices, tea, pulses, etc. though an increase has
been registered in floricultural products, fresh
fruits, marine products and sugar, etc.
Manufacturing sector alone accounted for
68.0 per cent of India’s total value of export in
2010-11. Engineering goods have shown a
significant growth in the export list. China and
other East Asian countries are our major
competitors. Gems and jewellery contributes a
larger share of India’s foreign trade.
Year Exports Imports   Total Trade Deficit
2000-01 203,571 230,873 434444 -27302
2004-05 375,340 501,065 876405 -125,725
2007-08 655,864 1,012,312 1668176 -356,448
2009-10 845,534 1,363,736 2209270 -518,202
Table 11.1 India’s Foreign Trade
Value in Rs. Crores
Source : http://commerce.nic.in/publications/annual-report - 2010-11
Commodities 1997-98 2003-04 2009-2010 2010-11
Agriculture and allied products 18.93 11.8 10.0 9.9
Ore and Minerals 3.03 3.71 4.9 4.0
Manufactured goods 75.83 75.96 67.4 68.0
Crude and petroleum products 1.01 5.59 16.2 16.8
Other commodities 1.2 2.94 1.5 1.2
Table 11.2 : Composition of India’s Export, 1997-2011
(Percentage share in Exports)
Source : Economic Survey 2011-12
As has already been mentioned, the
composition of commodities in India’s
international trade has been undergoing a
change over the years. The share of agriculture
and allied products has declined whereas
shares of petroleum and crude products and
other commodities have increased. The shares
of ore minerals and manufactured goods have
largely remained constant over the years from
1997-98 to 2003-04. The increase in the share
of petroleum products is due to a rise in
petroleum prices as well as increase in India’s
refining capacity.
Study table 11.3 and select major commodities
exported in 2010-1 1 and draw bar diagram.
Changing Patterns of the Composition of
India’s Import
India faced serious food shortage during 1950s
and 1960s. The major item of import at that
time was foodgrain, capital goods, machinery
and equipments. The balance of payment was
2015-16
International Trade     127
adverse as imports were more than export in
spite of all the efforts of import substitution.
After 1970s, foodgrain import was discontinued
due to the success of green revolution but the
energy crisis of 1973 pushed the prices of
petroleum, and import budget was also pushed
up. Foodgrain import was replaced by fertilisers
and petroleum. Machine and equipment,
special steel, edible oil and chemicals largely
make the import basket. Examine the changing
pattern of imports in Table 11.4 and try to
comprehend the shifts.
Table 11.4  shows that there is a steep rise
in imports of petroleum products. It is used not
only as a fuel but also as an industrial raw
material. It indicates the tempo of rising
industrialisation and better standard of living.
Sporadic price rise in the international market
is another reason for the same. Import of capital
goods maintained a steady increase due to rising
Commodity Group 2009-10 2010-11
Food and allied products 3.7 2.9
Fuel (Coal, POL) 33.2 31.3
Fertilisers 2.3 1.9
Paper board manufacturing and news print 0.5 0.6
Capital goods 15.0 13.1
Others of which 42.6 47.7
Chemicals (5.2) (5.2)
Pearls precious and semi precious stones (5.6) (9.4)
Gold and silver (10.3) (11.5)
Table 11.4 : India Composition of Import 2009-11
(In percentage)
Source : Economic Survey 2011-12
Commodities 2010-11
Agriculture and allied products 113116
Ores and Minerals 46152
Manufactured goods 777424
Mineral fuels and Lubricants 192282
Table 11.3 : Export of Principal Commodities
Rs. Crores
Source :  Economic Survey 2011-12.
demand in the export-oriented industrial and
domestic sectors. Non-electrical machinery,
transport equipment, manufacturers of metals
and machine tools were the main items of
capital goods. Import of food and allied
products declined with a fall in imports of
edible oils. Other major items of India’s import
include pearls and semi precious stones, gold
and silver, metalliferrous ores and metal scrap,
non-ferrous metals, electronic goods, etc. The
details of Indian imports of principal
commodities during 2010-11 have been given
in table 11.5.
Based on table 11.5, few activities may be
undertaken:
Arrange the items in ascending or
descending order and write the names of
the first five major items of India’s import
list of 2010-11.
Why does India import edible oil in spite of
being an agriculturally rich country?
Select five most important and five least
important items and represent them by bar
diagram.
Can you identify some items of imports for
which substitutes can be developed in
India?
2015-16
Page 4


Unit IV Unit IV Unit IV Unit IV Unit IV
Chapter 11
INTERNATIONAL
TRADE
You have already studied about the various
aspects of International trade in the book
Fundamentals of Human Geography.
International Trade is mutually beneficial as
no country is self-sufficient. India’s
International trade has undergone a sea change
in recent years in terms of volume, composition
as well as direction. Although India’s
contribution in the world trade is as low as one
per cent of the total volume, yet it plays a
significant role in the world economy.
Let us examine the changing pattern of
India’s International trade. In 1950-51, India’s
external trade was worth Rs.1,214 crore, which
rose to Rs. 22,09,270 crore in 2009-10. Can
you calculate the percentage growth in 2009-10
over 1950-51? There are numerous reasons for
this sharp rise in overseas trade, such as, the
momentum picked up by the manufacturing
sectors, the liberal policies of the government and
the diversification of markets.
The nature of India’s foreign trade has
changed over the years (Table 11.1). Though
there has been an increase in the total volume
of import and export, the value of import
continued to be higher than that of exports.
There has also been an increase in trade deficit
over the last couple of years. This increase in
deficit is attributed to the price rise of crude
petroleum which forms a major component of
India’s import list.
Changing P Changing P Changing P Changing P Changing Pa a a a attern of ttern of ttern of ttern of ttern of the the the the the
Composition of Composition of Composition of Composition of Composition of India’ India’ India’ India’ India’s Expor s Expor s Expor s Expor s Exports ts ts ts ts
Source : Economic Survey, 2011-12
Fig. 11.1
2015-16
126 India : People and Economy
Study the data in table 11.2 and answer the following
questions :
Why is the export of agricultural and allied products
declining continuously after 1997-98?
After attaining a peak in 1999-2000, why has the export
of manufacturing goods started decreasing?
Draw bar diagram to show the trends of exports of all
items given in the table. Use pen/pencil of different
colours.
The decline in traditional items is largely due
to the tough international competition. Amongst
the agricultural products, there is a great decline
in the exports of traditional items such as coffee,
spices, tea, pulses, etc. though an increase has
been registered in floricultural products, fresh
fruits, marine products and sugar, etc.
Manufacturing sector alone accounted for
68.0 per cent of India’s total value of export in
2010-11. Engineering goods have shown a
significant growth in the export list. China and
other East Asian countries are our major
competitors. Gems and jewellery contributes a
larger share of India’s foreign trade.
Year Exports Imports   Total Trade Deficit
2000-01 203,571 230,873 434444 -27302
2004-05 375,340 501,065 876405 -125,725
2007-08 655,864 1,012,312 1668176 -356,448
2009-10 845,534 1,363,736 2209270 -518,202
Table 11.1 India’s Foreign Trade
Value in Rs. Crores
Source : http://commerce.nic.in/publications/annual-report - 2010-11
Commodities 1997-98 2003-04 2009-2010 2010-11
Agriculture and allied products 18.93 11.8 10.0 9.9
Ore and Minerals 3.03 3.71 4.9 4.0
Manufactured goods 75.83 75.96 67.4 68.0
Crude and petroleum products 1.01 5.59 16.2 16.8
Other commodities 1.2 2.94 1.5 1.2
Table 11.2 : Composition of India’s Export, 1997-2011
(Percentage share in Exports)
Source : Economic Survey 2011-12
As has already been mentioned, the
composition of commodities in India’s
international trade has been undergoing a
change over the years. The share of agriculture
and allied products has declined whereas
shares of petroleum and crude products and
other commodities have increased. The shares
of ore minerals and manufactured goods have
largely remained constant over the years from
1997-98 to 2003-04. The increase in the share
of petroleum products is due to a rise in
petroleum prices as well as increase in India’s
refining capacity.
Study table 11.3 and select major commodities
exported in 2010-1 1 and draw bar diagram.
Changing Patterns of the Composition of
India’s Import
India faced serious food shortage during 1950s
and 1960s. The major item of import at that
time was foodgrain, capital goods, machinery
and equipments. The balance of payment was
2015-16
International Trade     127
adverse as imports were more than export in
spite of all the efforts of import substitution.
After 1970s, foodgrain import was discontinued
due to the success of green revolution but the
energy crisis of 1973 pushed the prices of
petroleum, and import budget was also pushed
up. Foodgrain import was replaced by fertilisers
and petroleum. Machine and equipment,
special steel, edible oil and chemicals largely
make the import basket. Examine the changing
pattern of imports in Table 11.4 and try to
comprehend the shifts.
Table 11.4  shows that there is a steep rise
in imports of petroleum products. It is used not
only as a fuel but also as an industrial raw
material. It indicates the tempo of rising
industrialisation and better standard of living.
Sporadic price rise in the international market
is another reason for the same. Import of capital
goods maintained a steady increase due to rising
Commodity Group 2009-10 2010-11
Food and allied products 3.7 2.9
Fuel (Coal, POL) 33.2 31.3
Fertilisers 2.3 1.9
Paper board manufacturing and news print 0.5 0.6
Capital goods 15.0 13.1
Others of which 42.6 47.7
Chemicals (5.2) (5.2)
Pearls precious and semi precious stones (5.6) (9.4)
Gold and silver (10.3) (11.5)
Table 11.4 : India Composition of Import 2009-11
(In percentage)
Source : Economic Survey 2011-12
Commodities 2010-11
Agriculture and allied products 113116
Ores and Minerals 46152
Manufactured goods 777424
Mineral fuels and Lubricants 192282
Table 11.3 : Export of Principal Commodities
Rs. Crores
Source :  Economic Survey 2011-12.
demand in the export-oriented industrial and
domestic sectors. Non-electrical machinery,
transport equipment, manufacturers of metals
and machine tools were the main items of
capital goods. Import of food and allied
products declined with a fall in imports of
edible oils. Other major items of India’s import
include pearls and semi precious stones, gold
and silver, metalliferrous ores and metal scrap,
non-ferrous metals, electronic goods, etc. The
details of Indian imports of principal
commodities during 2010-11 have been given
in table 11.5.
Based on table 11.5, few activities may be
undertaken:
Arrange the items in ascending or
descending order and write the names of
the first five major items of India’s import
list of 2010-11.
Why does India import edible oil in spite of
being an agriculturally rich country?
Select five most important and five least
important items and represent them by bar
diagram.
Can you identify some items of imports for
which substitutes can be developed in
India?
2015-16
128 India : People and Economy
Source : Economic Survey 2005-06 and 2011-12
Direction of Trade
India  has trade relations with most of the
countries and major trading blocks of the
world.
Region-wise and sub-region-wise trade
during the period 2010-11 has been given in
table 11.6.
India is a success story in terms of
diversification of export and import markets.
The share of Asia and ASEAN in total trade
increased from 33.3 per cent in 2000-01 to 57.3
per cent in the first half of 2011-12, while that
of Europe and America fell from 42.5 per cent
to 30.8 per cent respectively. This has helped
India weather the global crisis emanating from
Europe and America.
(Source : Economic Survey 2011-12)
An interesting development in the direction
of India’s trade is that the USA which was in
first position in 2003-04 has been relegated to
third position in 2010-11, with the UAE
becoming India’s largest trading partner,
followed by China. This position continued from
2008-09 to 2010-11.
Draw a multiple bar diagram to represent the major
trading partners.
Most of India’s foreign trade is carried
through sea and air routes. However, a small
portion is also carried through land route to
neighbouring countries like Nepal, Bhutan,
Bangladesh and Pakistan.
Commodities 2010-11
Fertilisers and fertilizer manufacturing 31533
Edible oils 29860
Pulp and waste paper 5208
Paper board and manufactures 9614
Non-ferrous metals 212153
Iron and steel 47275
Petroleum crude and products 482282
Pearls, precious and semi 1575596
precious stones
Medicinal and Pharma products 11114
Chemical products 13278
Table 11.5 : Import of Principal
Commodities
(in Crore rupees)
Source : Economic Survey 2011-12
Region Imports
2009-10 2010-11
Europe 263471 323857
(a) EU countries (27) 181937 202779
Africa 97871 118612
North America 139480 100602
Latin America 48942 64576
Asia and ASEAN 829224 1029881
Table 11.6 Direction of India’s Import trade
(in crore rupees)
Source : Department of Commerce based on DCCI&S
provisional data, Economic Survey 2011-12.
India aims to double its share in the
international trade within the next five years. It
has already started adopting suitable measures
such as import liberalisation, reduction in
import duties, de-licensing and change from
process to product patents.
Country 2003-04 Country 2010-11
U.S.A. 10.3 U.A.E. 10.81
U.K. 3.7 China 10.16
Belgium 3.7 U.S.A. 7.35
Germany 3.5 Saudi Arabia 4.13
Japan 2.7 Switzerland 4.10
Switzerland 3.3 Hong Kong 3.18
Hong Kong 2.8 Germany 3.00
U.A.E. 6.2 Singapore 2.81
China 6.4 Indonesia 2.60
Singapore 3.4 Belgium 2.40
Malaysia 1.7 Korea 2.35
 Total 47.7 Total 52.89
Table 11.7 India’s Major Trading
Partners’ Percentage share in total
trade (Export + Import)
2015-16
Page 5


Unit IV Unit IV Unit IV Unit IV Unit IV
Chapter 11
INTERNATIONAL
TRADE
You have already studied about the various
aspects of International trade in the book
Fundamentals of Human Geography.
International Trade is mutually beneficial as
no country is self-sufficient. India’s
International trade has undergone a sea change
in recent years in terms of volume, composition
as well as direction. Although India’s
contribution in the world trade is as low as one
per cent of the total volume, yet it plays a
significant role in the world economy.
Let us examine the changing pattern of
India’s International trade. In 1950-51, India’s
external trade was worth Rs.1,214 crore, which
rose to Rs. 22,09,270 crore in 2009-10. Can
you calculate the percentage growth in 2009-10
over 1950-51? There are numerous reasons for
this sharp rise in overseas trade, such as, the
momentum picked up by the manufacturing
sectors, the liberal policies of the government and
the diversification of markets.
The nature of India’s foreign trade has
changed over the years (Table 11.1). Though
there has been an increase in the total volume
of import and export, the value of import
continued to be higher than that of exports.
There has also been an increase in trade deficit
over the last couple of years. This increase in
deficit is attributed to the price rise of crude
petroleum which forms a major component of
India’s import list.
Changing P Changing P Changing P Changing P Changing Pa a a a attern of ttern of ttern of ttern of ttern of the the the the the
Composition of Composition of Composition of Composition of Composition of India’ India’ India’ India’ India’s Expor s Expor s Expor s Expor s Exports ts ts ts ts
Source : Economic Survey, 2011-12
Fig. 11.1
2015-16
126 India : People and Economy
Study the data in table 11.2 and answer the following
questions :
Why is the export of agricultural and allied products
declining continuously after 1997-98?
After attaining a peak in 1999-2000, why has the export
of manufacturing goods started decreasing?
Draw bar diagram to show the trends of exports of all
items given in the table. Use pen/pencil of different
colours.
The decline in traditional items is largely due
to the tough international competition. Amongst
the agricultural products, there is a great decline
in the exports of traditional items such as coffee,
spices, tea, pulses, etc. though an increase has
been registered in floricultural products, fresh
fruits, marine products and sugar, etc.
Manufacturing sector alone accounted for
68.0 per cent of India’s total value of export in
2010-11. Engineering goods have shown a
significant growth in the export list. China and
other East Asian countries are our major
competitors. Gems and jewellery contributes a
larger share of India’s foreign trade.
Year Exports Imports   Total Trade Deficit
2000-01 203,571 230,873 434444 -27302
2004-05 375,340 501,065 876405 -125,725
2007-08 655,864 1,012,312 1668176 -356,448
2009-10 845,534 1,363,736 2209270 -518,202
Table 11.1 India’s Foreign Trade
Value in Rs. Crores
Source : http://commerce.nic.in/publications/annual-report - 2010-11
Commodities 1997-98 2003-04 2009-2010 2010-11
Agriculture and allied products 18.93 11.8 10.0 9.9
Ore and Minerals 3.03 3.71 4.9 4.0
Manufactured goods 75.83 75.96 67.4 68.0
Crude and petroleum products 1.01 5.59 16.2 16.8
Other commodities 1.2 2.94 1.5 1.2
Table 11.2 : Composition of India’s Export, 1997-2011
(Percentage share in Exports)
Source : Economic Survey 2011-12
As has already been mentioned, the
composition of commodities in India’s
international trade has been undergoing a
change over the years. The share of agriculture
and allied products has declined whereas
shares of petroleum and crude products and
other commodities have increased. The shares
of ore minerals and manufactured goods have
largely remained constant over the years from
1997-98 to 2003-04. The increase in the share
of petroleum products is due to a rise in
petroleum prices as well as increase in India’s
refining capacity.
Study table 11.3 and select major commodities
exported in 2010-1 1 and draw bar diagram.
Changing Patterns of the Composition of
India’s Import
India faced serious food shortage during 1950s
and 1960s. The major item of import at that
time was foodgrain, capital goods, machinery
and equipments. The balance of payment was
2015-16
International Trade     127
adverse as imports were more than export in
spite of all the efforts of import substitution.
After 1970s, foodgrain import was discontinued
due to the success of green revolution but the
energy crisis of 1973 pushed the prices of
petroleum, and import budget was also pushed
up. Foodgrain import was replaced by fertilisers
and petroleum. Machine and equipment,
special steel, edible oil and chemicals largely
make the import basket. Examine the changing
pattern of imports in Table 11.4 and try to
comprehend the shifts.
Table 11.4  shows that there is a steep rise
in imports of petroleum products. It is used not
only as a fuel but also as an industrial raw
material. It indicates the tempo of rising
industrialisation and better standard of living.
Sporadic price rise in the international market
is another reason for the same. Import of capital
goods maintained a steady increase due to rising
Commodity Group 2009-10 2010-11
Food and allied products 3.7 2.9
Fuel (Coal, POL) 33.2 31.3
Fertilisers 2.3 1.9
Paper board manufacturing and news print 0.5 0.6
Capital goods 15.0 13.1
Others of which 42.6 47.7
Chemicals (5.2) (5.2)
Pearls precious and semi precious stones (5.6) (9.4)
Gold and silver (10.3) (11.5)
Table 11.4 : India Composition of Import 2009-11
(In percentage)
Source : Economic Survey 2011-12
Commodities 2010-11
Agriculture and allied products 113116
Ores and Minerals 46152
Manufactured goods 777424
Mineral fuels and Lubricants 192282
Table 11.3 : Export of Principal Commodities
Rs. Crores
Source :  Economic Survey 2011-12.
demand in the export-oriented industrial and
domestic sectors. Non-electrical machinery,
transport equipment, manufacturers of metals
and machine tools were the main items of
capital goods. Import of food and allied
products declined with a fall in imports of
edible oils. Other major items of India’s import
include pearls and semi precious stones, gold
and silver, metalliferrous ores and metal scrap,
non-ferrous metals, electronic goods, etc. The
details of Indian imports of principal
commodities during 2010-11 have been given
in table 11.5.
Based on table 11.5, few activities may be
undertaken:
Arrange the items in ascending or
descending order and write the names of
the first five major items of India’s import
list of 2010-11.
Why does India import edible oil in spite of
being an agriculturally rich country?
Select five most important and five least
important items and represent them by bar
diagram.
Can you identify some items of imports for
which substitutes can be developed in
India?
2015-16
128 India : People and Economy
Source : Economic Survey 2005-06 and 2011-12
Direction of Trade
India  has trade relations with most of the
countries and major trading blocks of the
world.
Region-wise and sub-region-wise trade
during the period 2010-11 has been given in
table 11.6.
India is a success story in terms of
diversification of export and import markets.
The share of Asia and ASEAN in total trade
increased from 33.3 per cent in 2000-01 to 57.3
per cent in the first half of 2011-12, while that
of Europe and America fell from 42.5 per cent
to 30.8 per cent respectively. This has helped
India weather the global crisis emanating from
Europe and America.
(Source : Economic Survey 2011-12)
An interesting development in the direction
of India’s trade is that the USA which was in
first position in 2003-04 has been relegated to
third position in 2010-11, with the UAE
becoming India’s largest trading partner,
followed by China. This position continued from
2008-09 to 2010-11.
Draw a multiple bar diagram to represent the major
trading partners.
Most of India’s foreign trade is carried
through sea and air routes. However, a small
portion is also carried through land route to
neighbouring countries like Nepal, Bhutan,
Bangladesh and Pakistan.
Commodities 2010-11
Fertilisers and fertilizer manufacturing 31533
Edible oils 29860
Pulp and waste paper 5208
Paper board and manufactures 9614
Non-ferrous metals 212153
Iron and steel 47275
Petroleum crude and products 482282
Pearls, precious and semi 1575596
precious stones
Medicinal and Pharma products 11114
Chemical products 13278
Table 11.5 : Import of Principal
Commodities
(in Crore rupees)
Source : Economic Survey 2011-12
Region Imports
2009-10 2010-11
Europe 263471 323857
(a) EU countries (27) 181937 202779
Africa 97871 118612
North America 139480 100602
Latin America 48942 64576
Asia and ASEAN 829224 1029881
Table 11.6 Direction of India’s Import trade
(in crore rupees)
Source : Department of Commerce based on DCCI&S
provisional data, Economic Survey 2011-12.
India aims to double its share in the
international trade within the next five years. It
has already started adopting suitable measures
such as import liberalisation, reduction in
import duties, de-licensing and change from
process to product patents.
Country 2003-04 Country 2010-11
U.S.A. 10.3 U.A.E. 10.81
U.K. 3.7 China 10.16
Belgium 3.7 U.S.A. 7.35
Germany 3.5 Saudi Arabia 4.13
Japan 2.7 Switzerland 4.10
Switzerland 3.3 Hong Kong 3.18
Hong Kong 2.8 Germany 3.00
U.A.E. 6.2 Singapore 2.81
China 6.4 Indonesia 2.60
Singapore 3.4 Belgium 2.40
Malaysia 1.7 Korea 2.35
 Total 47.7 Total 52.89
Table 11.7 India’s Major Trading
Partners’ Percentage share in total
trade (Export + Import)
2015-16
International Trade     129
Sea P Sea P Sea P Sea P Sea Por or or or orts as Ga ts as Ga ts as Ga ts as Ga ts as Gate te te te tew w w w wa a a a ay y y y ys of s of s of s of s of
Interna Interna Interna Interna International T tional T tional T tional T tional Tr r r r rade ade ade ade ade
India is surrounded by sea from three sides and
is bestowed  with a long coastline. Water
provides a smooth surface for very cheap
transport provided there is no turbulence. India
traders and colonisation of the country by the
British. This led to the variation in the size and
quality of ports. There are some ports which
have very vast area of influence and some have
limited area of influence. At present, India has
12 major ports and 185 minor or intermediate
ports. In case of the major ports, central
government decides the policy and plays
regulatory functions. The minor ports are there
whose policy and functions are regulated by
state governments. The major ports handle
larger share of the total traffic. The 12 major
ports handled about 71 per cent of the country’s
oceanic traffic in 2008-09.
The British used the ports as suction
points of the resources from their hinterlands.
The extension of railways towards the interior
facilitated the linking of the local markets to
regional markets, regional markets to national
markets and national markets to the
international markets. This trend continued till
1947. It was expected that the country’s
independence will reverse the process, but the
partition of the country snatched away two very
important ports i.e. Karachi port went to
Pakistan and Chittagong port to the erstwhile
east-Pakistan and now Bangladesh. To
compensate the losses, many new ports like the
Kandla in the west and the Diamond Harbour
near Kolkata on river Hugli in the east were
developed.
Despite this major setback, Indian ports
continued to grow after the Independence.
Today Indian ports are handling large volumes
of domestic as well as overseas trade. Most of
the ports are equipped with modern
infrastructure. Previously the development and
modernisation was the responsibility of the
government agencies, but considering the
increase in function and need to bring these
ports at par with the international ports, private
entrepreneurs have been invited for the
modernisation of ports in India.
The capacity of Indian ports increased from
20 million tonnes of cargo handling in 1951 to
more than 586 million tonnes in 2008-09.
Fig. 11.3 : Unloading of goods on port
has a long tradition of sea faring and developed
many ports with place name suffixed with
pattan meaning port. An interesting fact about
ports in India is that its west coast has more
seaports than its east coast.
Can you find out the reasons for the
variations in the location of ports along the
two coasts?
Though ports have been in use since
ancient times, the emergence of ports as
gateways of international trade became
important after the coming of the European
2015-16
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