1. Size of India’s Foreign Trade: Size of foreign trade means the total value and volume of merchandise imports and export of a country.
- If the payments made towards imports and revenues generated from export rises and the share of country’s trade in world trade rises, then it is concluded that the size of the country’s foreign trade had increased.
- After independence in the initial years due to low development the size of imports remained large and owing to lower capacity to export india’s exports remained lower.
- To sustain international competition, after 1991 the demand for technology, petrol, etc. remained very high but along with this exports increased significantly.
- The percentage share of trade in India’s GDP was 19% in the year 2001, which increased to 38.3% in 2014.
2. Nature of India’s Foreign Trade: Nature of trade means a picture of the items of merchandise imports and exports.
- In the decade between 1950 and 1960, in a less developed country like india, food grain imports and developmental imports were high. Whereas exports of primary goods like tea, coffee, jute, ores and minerals etc. were much higher.
- When a country like India starts developing more, in the decades of seventies and eighties imports of food grains tends to fall and exports of primary goods tends to fall and that of industrial goods tends to rise.
- After 1991, the nature of exports and imports changed significantly in India. Imports of food grains, other agricultural goods and capital goods declined in total imports. Whereas the export of traditional goods declined and that of industrial goods and non-traditional items increased.
- In 2014-15, India attained self-reliance in grains and other food items. India’s merchandise imports was reduced to 9.8 % while due to diversification in the development process import of new goods increased to 46.5 %.
- The nature of exports has also changed. India’s merchandise exports of primary goods reduced to 12.3% in 2014-15. Likewise export of leather products declined to 1.3%, that of textile goods to 2 %, ready-made garments increased to 5.4 %, manufactured products increased to 66.7 % and petroleum products increased to 18.5 % during the same period.
3. Direction of India’s Foreign Trade:
- Direction of foreign trade means the trade relation of a nation with various countries of the world.
- Before independence large proportion of our trade was with England.
