Question

Describe the composition of the export and import trade of India.

Answer 1

Composition of Export trade in India: The composition of commodities in India’s international trade has been undergoing change over years. The share of agriculture and allied products have 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 the rise in petroleum price as well as India’s refining capacity. The decline in traditional products is largely due to competition from the international market. 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.

The manufacturing sector alone accounted for 68 percent of India’s total value of export in 2010-11. Engineering goods have shown significant growth in the export list. China and other East Asian countries are our major competitors. Gems and jewelry contribute a larger portion of India’s foreign trade.

Composition of Import trade in India: Machine and equipment, special steel, edible oil, and chemicals largely make the import basket. There has been 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 industrialization and a 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 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.