Chapter 11

International Trade

FACTS THAT MATTER

•International trade is mutually beneficial as no country is self-sufficient. There nave heen drastic changes in India's International trade in recent years in terms of volume composition as well as direction. India's contribution in the world trade is one per cent of the total volume, yet it plays a significant role in the world economy.

•In 1950-51, India's external trade was worth 1,214 crore, which rose to 44,29,762 crore in 2016-1(. 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. There has been an increase in trade deficit over the last couple of years. This increase in delcit is attributed to the price rise of crude petroleum which forms a major component of India's import list.

Changing Pattern of the Composition of India's Export

•The export of agricultural and allied products has been declining continuously after 1997-98 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 accounted for 73.6 per cent of India's total value of export in 2016-17. Engineering goods have shown a significant growth in the export list. Textile sector could not achieve much in spite of the liberal measures taken by the government. Gems and jewellery contributes a larger share of India's foreign trade.

Changing Pattern of the Composition of India's Import

•India faced serious food shortage in 1950s & 1960s. Foodgrains along with capital goods, machinery and equipments was the major items of imports. Balance of payments was unfavourable due to imports exceeding exports.

•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.

•Import of capital goods maintained a steady increase due to rising 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.

Direction of trade

•India has trade relations with most of the countries & major trading blocks. Trade with Asia and ASEAN Countries increased from 1029881 (2010-11) to 1544520 (2016- 17) crore rupees.

•India aims to double its share in the international trade within the next five years. India las started adopting suitable measures such as import liberalisation, reduction in import duties, de-licensing and change from process to product patents.

•Most of India's foreign trade is carried through sea and air routes. However, a small portion 1s also carried through land route to neighbouring countries like Nepal, Bhutan, Bangladesh and Pakistan.

Sea Ports as Gateways of International Trade

•India is surrounded by sea from three sides and is bestowed with a long coastline. At present, India has 12 major ports and 200 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 handle about 75 per cent of the country's oceanic traffic.

•The British used ports as suction points of the resources from their hinterlands. Extension of railways into the interior helped in linking to the ports.

•After partition of the country the two very important ports Karachi port and Chittagong Port had gone to Pakistan formerly West Pakistan and Bangladesh formerly East Pakistan) respectively. To compensate the losses, many new ports like the Kandla in the west and the Diamond Harbour near Kolkata on the river Hugli in the east were developed.

•Most of the ports are equipped with modern infrastructure and handle large volume of traffic. 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 837 million tonnes in 2016.

•Some of the important Indian ports are Kandla Port, Mumbai port, Jawaharlal Nehru Port, Marmagao Port, New Mangalore Port, Haldia Port, Chennai Port, Ennore Port, Kochchi Port, Kolkata Port, Vishakhapatnam port, Tuticorin Port and Paradwip Port.

Airports

•Air transport plays an important role in the international trade. It has the advantage of taking the least time for carriage and handling high volume of perishable goods over long distances. Not suitable for commercial trade of heavy and bulky commodities.

•There were 25 major airports functioning in the Country (2016-17). They are Ahmedabad, Amritsar, Bengaluru, Chennai, Delhi, Goa, Guwahati, Hyderabad,

Cochin, Kolkata, Mumbai, Thiruvananthapuram Srinagar, Jaipur, Calicut, Indore, Nagpur, Patna, Coimbatore, Bhubaneswar, Kannur, Mangalluru, Lucknow, Pune Chandigarh and Vishakhapatnam.

We hope CBSE/MP Board Class 12th "Geography Part B " Chapter 11 "INTERNATIONAL TRADE" will help you.

Written By - HIMANSHU SHARMA