Direction of foreign trade means the relations of a nation with various countries of the world.
- In order to develop trade relation with other countries ¡n various directions a country needs to fulfill following requirements:
- The country should have capability to undertake production of large variety of goods.
- Develop good political and diplomatic relations with many countries.
- Readiness to undertake several diplomatic engagements with other nations.
- Ability and technology for setting up proper sales facilities and trade mechanisms.
- Produce surplus quantities which can be exported.
(A) Pattern (direction) of import:
1. Our trade relations with England developed quite strong after the British started ruling India. This tradition continued even after independence. In 1960-61, 19% of our total merchandise imports were from England. However, the situation changed 2007 wherein India imported less than 2% things from England. ‘
2. After independence, we were quite dependent on America for our imports. In 1960-61, our imports from USA constituted 29% of our total merchandise imports. This fell to less than 8% after 2007.
3. With time, Indian industries started developing. So, we were in heavy need of petroleum based products. As a result, our merchandise imports from OPEC i.e. Organization of Petroleum Exporting Countries increased.
4. India had friendly relations with Russia and our imports from Russia were high after independence. This declined since 1980s after the economic crisis in Russia.
5. Over, time our trade with traditional partners started declining gradually and started increasing with other developing countries, especially with developing countries of East Asia, Central Asia and Africa. •
6. Our imports from other developing countries were about 11.8% of our total merchandise imports in 1960-61. This increased to 32% in 2007-08 and further to 59% in 2014-15.
(B) Pattern (direction) of export:
1. In the same pattern in 1960-61, India’s exports to England constituted 26.8% of the total merchandise exports which reduced to as low as 4% after 2007-08.
2. During the same period, India’s exports to USA declined from 16% of the total merchandise exports to 12.7% and that to Russia from 4.5% to 0.6%.
3. Contrary of this, our merchandise exports to OPEC constituted 4.1% of our total merchandise exports in 1960-61 which gradually increased over years. After 2007-08 it increased to over 16% and during the same period merchandise exports to developing countries increased from 14.8% to 42.6% of the total merchandise exports.
4. From our total merchandise exports, those to Asian countries were countries were almost 50% in 2014-15.
5. Thus, India has made several successful attempts to diversify her trade with different countries that too in different directions.
