Question

The composition of commodities in India’s international trade has been undergoing a change over the years. Substantiate the statement with suitable arguments.

Answer 1

1. The share of agriculture and allied products has declined, whereas shares of petroleum and crude products and other commodities have increased.
2. The shares of ore minerals and manufactured goods have largely remained constant over the years from 2009-10 to 2010-11 and 2015-16 to 2016-17.
3. The decline in traditional items is largely due to the tough international competition. Amongst the agricultural products, there is a decline in the export of traditional items, such as coffee, cashew, etc., though an increase has been registered in floricultural products, fresh fruits, marine products and sugar, etc.
4. Manufacturing sector alone accounted for 73.6 percent of India’s total value of exports in 2016-17. Engineering goods have shown a significant growth in exports.
5. After the 1970s, foodgrain imports 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.
6. Foodgrain import was replaced by fertilizers and petroleum. Machine and equipment, special steel, edible oil and chemicals largely make the import basket.