Question

State with reasons whether you agree or disagree with the following statement.

Over the last 75 years, India’s foreign trade has undergone a complete change in terms of composition and direction.

Options

• Agree

• Disagree

Answer 1

I Disagree with the given statement.

Explanation:

Over the last 70 years, India’s foreign trade has undergone a complete change in terms of composition and direction.

The main features of the composition of India’s foreign trade are as follows:

1. Increasing share of Gross National Income: In 1990-91, the share of India’s foreign trade (import-export) in gross national income was 17.55%. It increased to 25% during 2006-07 and to 48.8% during 2016-17.
2. Increase in volume and value of trade: Since 1990-91, the volume and value of India’s foreign trade has gone up. India now exports and imports goods which are several times more in value and volume.
3. Change in the composition of exports: Since Independence, the composition of export trade of India has undergone a change. Prior to Independence, India used to export primary products like jute, cotton, tea, oil-seeds, leather, foodgrains, cashew nuts and mineral products. With the passage of time, manufactured items like readymade garments, gems and jewellery, electronic goods, especially computer hardware and software occupy a prime place in India’s exports.
4. Change in the composition of imports: Prior to independence, India used to import consumer goods like medicines, cloth, motor vehicles, electrical goods etc. A part from petrol and petroleum, India is now importing mainly capital goods like high-tech machinery chemicals, fertilizers, steel etc.
5. Oceanic trade: Most of India’s trade is by sea. India has trade relations with its neighbouring countries like Nepal, Afghanistan, Myanmar, Sri Lanka etc. The share of India’s oceanic trade is around 68%.
6. Development of new ports: For its foreign trade, India depended mostly on Mumbai, Kolkata and Chennai ports. Therefore, these ports were overburdened. Recently, India has developed new ports at Kandla, Cochin, Vishakhapatnam, Nhava Sheva etc. to reduce the burden on the exsiting ports.