INTERNATIONAL TRADE LESSON 11
INTRODUCTION
International Trade is mutually beneficial as no country is selfsufficient
India’s contribution in world trade is as low as 1%
India’s external trade in 1950-51 was Rs. 1,214 crore
External Trade rose to Rs. 44,29,762 crore
Reasons for rise in trade:
• Momentum picked by manufacturing sector
• Liberal government policies
• Diversification of markets
Value of India’s imports is higher than of exports
CHANGING PATTERN of THE COMPOSITION of INDIA’S EXPORTS
Share of agricultural products like coffee, cashew has declined in int’l trade due to international competition
Share of petroleum & crude products has increased Share of ore minerals & manufactured goods have remain constant
India’s main competitors: China & E-Asian countries
Manufacturing sector accounted for 73% (approx.)of India’s total value of export in 2016-17
Engineering goods have shown growth in the export
A larger share of India’s foreign trade is contributed by Jewellery & gems
CHANGING PATTERN OF THE
COMPOSITION OF INDIA’S IMPORTS
During 1950-1960 India imported food grain , capital goods & machinery
BOP was low, because imports were more than exports
Due to green revolution food grain import declined & in 1970s it was
replaced by petrol & fertilizers
There was a rise in petroleum import due to rise in industrialization & better standard of living
Petroleum is used as fuel & industrial raw material
Regular price rise in int’l market is also reason for higher petroleum import
Import of capital goods like transport equipment, machine tools etc.
has increased steadily
Other major imports: Gold, non-ferrous metals, electronic goods
DIRECTION OF TRADE
India has trade relation with most of the countries also with trade blocks of the world
In 2016-17 India traded the highest with ASEAN & other Asian countries
India aims to double its share in int’l trade in next five years
Measures to double int’l trade :
▪ Import liberalization
▪ Reduction in import duties
▪ Delicensing
Most of India’s trade takes place through air & sea routes
Small portion of trade takes place through land routes to neighboring countries
SEA PORTS-GATEWAYS TO INT’L TRADE
India surrounded by sea on 3 sides, also has long coastline
Water provides smooth surface for very cheap transport
India has more ports on west coast than on east coast:
▪ West coast is submergent , east coast is emergent
▪ West rivers from estuaries while east rivers form delta
▪ Difficult to develop good ports & harbors on east coast
▪ East coast is smooth & unfit for ports, West Coast is suitable
At present there are 12 major ports & about 200 minor ports
Major ports are regulated by central govt. while minor ports are
regulated by state govt.
Major ports have larger share of traffic
British used ports to transfer raw materials from Britain
After partition Karachi Port & Chittagong Port went to Pakistan & Bangladesh respectively
Kandla Port & Diamond Harbor were built to compensate losses
Ports are well equipped with modern infrastructure
Private entrepreneurs are been invited to modernize ports
INDIAN PORTS
- KANDLA PORT:
▪ Situated at head of Gulf of Kucchh in Gujarat
▪ Developed to support needs of western & N-W parts of
country also to reduce pressure from Mumbai port
▪ Specially designed to receive large quantities of petrol &
petroleum products , fertilizer
▪ Vadinar developed to reduce pressure of Kandla port - MUMBAI PORT
▪ Natural harbor, biggest port of the country
▪ Situated closer to routes from Middle east,
Mediterranean countries, N-America & Europe
▪ 20 km long , 6-10 km wide
▪ Has largest oil terminal in India
▪ Main hinterland:- MP, Maharashtra, Gujarat - JAWAHARLAL NEHRU PORT
▪ Situated at Nhava Sheva
▪ Developed as satellite port, to relieve pressure on
Mumbai port
▪ Largest container port in India - MARMAGAO PORT
▪ Situated in Goa at the entrance of Zuari estuary, is a
natural harbor
▪ Gained significance after remodeling to handle large
iron exports to Japan
▪ Construction of Konkan Railway extended its hinterland
▪ Main Hinterlands:- Karnataka, Goa, S-Maharashtra - NEW MANGALORE PORT
▪ Situated in Karnataka
▪ Caters need of export of iron ore
▪ Handles Fertilizers , petrol products, tea etc.
▪ Hinterland: Karnataka - KOCCHI PORT
▪ Situated at the head of Vemabanad kayal, Kerala
known as queen of Arabian sea
▪ It is a natural harbor
▪ Advantageous as located close to Suez Colombo route
▪ Fulfill the needs of Kerala, Karnataka & Tamil Nadu - KOLKATA PORT
▪ Located on Hugli river , West Bengal
▪ Developed by British
▪ Has lost its significance because of diversion of exports to
other ports- Vishakhapatnam & Paradwip
▪ There is problem of silt accumulation in Hugli river
▪ Extends port facilities to Nepal & Bhutan - HALDIA PORT
▪ Located 105km downstream from Kolkata
▪ Constructed to reduce congestion at Kolkata port
▪ Handle cargo like iron ore, coal, petroleum etc. - PARADWIP PORT
▪ Situated in Mahanadi delta, Odisha
▪ Has deepest harbor to handle very large vessels
▪ Developed to handle large scale export of iron ore
▪ Hinterland: Odisha, Jharkhand, Chhattisgarh - VISHAKAPATNAM PORT
▪ Situated in Andhra Pradesh
▪ Land locked harbor
▪ Outer harbor developed for handling Iron ore &
petroleum
▪ Hinterland: Andhra Pradesh & Telangana - CHENNAI PORT
▪ One of the oldest port of e-coast
▪ Artificial harbor built in 1859
▪ Not suitable for large ships because of shallow water
near coast
▪ Hinterland: Tamil Nadu, Puducherry - ENNORE PORT
▪ Newly developed port in Tamil Nadu
▪ Constructed to relieve pressure of Chennai port - TUTICORIN PORT
▪ Developed to relieve pressure of Chennai port
▪ Deals with cargo including coal, salt, sugar etc.
AIRPORTS
Air transport is important in int’l trade
Takes least time for carriage & handling high value perishable goods over long distance
Costly not suitable for bulky goods
Comparatively participates less in int’l trade than sea routes
There are 25 major airports
Example: Bengaluru, Ahmedabad, Mumbai ,Delhi