Question

Explain the trend in India's imports.

Answer 1

Import trade refers to the purchase of goods and services by one country from another. In other words, it is the inflow of goods and services to the home country from a foreign country.

The trend in India's imports can be explained as follows:

1. Petroleum: Petroleum has always been the most significant import item in India’s trade in the pre as well as post-reform periods. In 1990-92, it had a share of 27% of total imports which currently stands at around 31%.
2. Gold: After petroleum, the second most imported item is gold. It has been observed that there was a significant drop in gold imports during 2013-14. The gold imports declined from 53.3 billion dollars in 2011-12 to 27.5 billion dollars in 2013-14. This was primarily due to a fall in international gold prices and various policy measures taken by the government to curb gold imports.
3. Fertilizers: The share of fertilizers in import expenditure declined from 4.1% in 1990-91 to only 1.3% in 2016-17.
4. Iron and Steel: The share of iron and steel in import expenditure declined from 4.9% to 2.1% in 2016-17.