CHAPTER

11 International Trade
Introduction:
International trade, economic transactions that are made between countries. Among the items most commonly sold are
consumer goods, such as televisions and clothing; large goods, such as machinery; and consumables and food.

1. Changing Patterns of the Composition of India’s Exports:

1. In recent years, changes have been recorded in the
consolidation of goods in India's international trade. There is
a decline in the share of agricultural and related products and
shares of petroleum and waste products and other
commodities have increased. The share of petroleum
products has increased significantly due to rising fuel prices
and an increase in the refining capacity of India.
2. Significant reductions are registered in the export of
traditional products such as coffee, spices, tea, pulses, etc. due
to difficult international competition. Although the increase is
registered in flower products, fresh fruit, seafood and sugar
products, etc. But the manufacturing sector alone accounted for 68% of total exports to India in 2010-11.
3. India's biggest rivals are China and other East Asian countries. Apart from this, jewels and jewelry are some of the major
contributors to Indian trade.

2. Changing Patterns of the Composition of India’s Import

1. During the 1950s and 1960s, India experienced a severe food
shortage, so the country had to buy grain, bulk goods,
machinery and equipment on a large scale.
2. Payment balance was poor as imports were more than
exported without all attempts to repatriate imports.
3. After the 1970s, the success of the green revolution halted
the importation of cereals. But the power crisis of 1973
replaced grain exports for fertilizer and petroleum as
petroleum prices rose.
4. In addition, other imported goods were machinery and
equipment, special metals, edible oil and chemicals.
5. According to the Economic Survey 2011-12, petroleum
products have registered rapid growth in imports.
6. It is a product of the petrochemical industry and is also used as oil. Rising means a period of industrial growth and improved
living standards.
7. Occasional price hikes in international markets may be another reason for the rise.
8. The importation of large goods such as non-electrical equipment, transportation, metallurgy and machinery equipment is
registering for continued growth. This increase may be due to increased demand in the industrial and domestic sectors
focused on exports.
9. Imports of food and related products are registered for declines due to the sudden decline in imports of edible oil from other
countries.
10. Pearls and precious stones, gold and silver, iron ore and iron ore, stainless steel, electrical goods, etc. are some of the
precious metals bought in India.
 3. Direction of Trade
1. India is a trading partner with many countries and major
trading centers in the world.
2. India aims to double its share of international trade over the
next 5 years. To achieve this goal, India has begun taking
appropriate steps that include international liberation, the
reduction of import duties, the revocation of licenses and the
transition from system to product patents.
3. India has set an example by the percentage of Asia and
ASEAN (Association of Southeast Asian Nations) in total
global trade increased. It was 33.3% in 2000-01 and
increased to 57.3% in 2011-12. In contrast, the European and
American share has dropped from 42.5% to 30.8%. This has helped India survive the crisis in Europe and America.
4. With the development of the Indian trading system, the Indian trade share with various countries has also changed. In 2003-
04, the USA became India's largest trading partner. The UAE has now ousted the USA as India's largest trading partner in
2010-11.
5. After the UAE, China is the second largest trading partner with India continuing this position from 2008-09 to 2010-11. The
US dropped to third place.
6. India's foreign trade is mainly done by sea and airways. Foreign trade on the national route is restricted to neighboring
countries such as Nepal, Bhutan, Bangladesh and Pakistan.

4. Sea ports such as Gateways of International Trade

1. India has a long history of international trade through seaports
as it has a long coastline and is open to the sea from three sides.
Water provides smooth and cheap transport without
interruption.
2. India has developed many ports along its coast. These holes are
named after the suffix ‘pattern’ which means hole. It is
interesting to note that India has more seaports on the West
Coast than its East Coast.
3. After the arrival of European traders and the British
occupation, Indian ports emerged as the gateways to
international trade.
4. There are some parts that have a great impact and some have a
limited area of influence.

Large and Small Ports:

1. Currently, India has 12 major and 185 small or medium ports.
In major ports, the Central Government is responsible for
determining the policies and regulating their operations and
small ports, the Regional Government is responsible for the
same functions mentioned above.
2. Larger traffic ports are hosted by larger ports, e.g., about 71%
of India's maritime traffic was handled by 12 major ports
between 2008-09.
3. The British used these ports to export India's natural
resources; especially in their rural areas but the practice was
discontinued after 1947.
4. India lost two of its most important ports, the Karachi port to Pakistan and the Chittagong port to Bangladesh (formerly
East-Pakistan). But India successfully recovered from this loss by opening many new ports, for example, Kandla in the West
and the Diamond port near Kolkata on the Hugli River in the East.
5. Today, large numbers of domestic and international trade are handled by these Indian ports. Most ports are equipped with
modem infrastructure.
6. Previously, government institutions were expected to be responsible for the development and development of Indian ports.
 However, there is a need to increase employment and make these ports the size of the world's ports. Therefore, private
entrepreneurs have been invited to develop ports in the country.
7. The carrying capacity of Indian ports increased from 20 million tons in 1951 to more than 600 billion tons at present.
8. Important Ports

The other ports of India and its hinterlands are as follows:

1. Kandla Port:

1. This port is located at the head of the Gulf of Kachchh. The main objectives of this large port are to meet the needs of
the Western and North-West ports of the country and to reduce pressure on the port of Mumbai.
2. This port is mainly designed to accommodate large quantities of fuel as well as petroleum products and fertilizers.
3. To reduce pressure on Kandla port, a coastal port called Vadinar has been built.
4. Due to confusion in boundary design, the adjacent area of one port may extend to another.

2. Mumbai Port:

1. This is a natural port and a major port in India.

2. The port's location is close to conventional routes from the Middle East, the Mediterranean countries, North Africa,
North America and Europe, where much of the world's overseas trade takes place.
3. The port has been expanded to cover a large area of 20 km and 6-10 km wide with 54 rooms and has the largest oil base
in the country.
4. The main ports of the port are Madhya Pradesh, Maharashtra, Gujarat, Uttar Pradesh and other parts of Rajasthan.

3. Jawaharlal Nehru Port:

 1. This satellite station is located at Nhava Sheva. Designed to reduce pressure on the port of Mumbai.
2. It is the largest port in India.

4. Mormogao Port:

1. Located at the mouth of the Zuari River which is a natural harbor in Goa. It gained momentum after its restructuring in
1961 to handle the export of iron-ore to Japan.
2. The construction of the Konkan railway line expanded its external territory, e.g., Karnataka, Goa, Southern Maharashtra
including their country.

5. The new port of Mangalore:

1. It is widely used to export iron-ore and iron concentrates, and other substances such as fertilizers, petroleum products,
edible oils, coffee, tea, wood pulp, yam, granite, molasses, etc.
2 . It is located in Karnataka which is largely in the west.

6. Kochchi Port:

1. The airport is best known as the ‘Queen of the Arabian Sea’.

2. It is a natural port and is located at the head of Vembanad Kayal.
3. Kochchi Harbour is close to the Suez-Colombo route.
4. Provides the needs of Kerala, Southern-Karnataka, and South-Western Tamil Nadu.
7. Kolkata Port:

1. Located on the Hugli River 128 km inland from the Bay of Bengal. The port was founded by the British as it was the
capital of British India.
2. The port has lost its value due to diversion in other ports such as Visakhapatnam, Paradip and the satellite port, Haldia.
3. It also faces the problem of the accumulation of mud in the Hugli River, which prevents contact with the sea.
4. West includes Uttar Pradesh, Bihar,
5. Jharkhand, West Bengal, Sikkim and North-Eastern Provinces.
6. It also provides port services to neighboring countries such as Nepal and Bhutan.

8. Haldia Port:

1. Located 105 km downstream from Kolkata.

2. Designed to reduce congestion in Kolkata harbor.
3. Handles bulk materials such as iron-ore, coal, petroleum, petroleum and fertilizer products, jute, jute products, cotton,
cotton thread, etc.

9. Paradip Port:

1. The port is located in the Mahanadi area and is 100 km from Cuttack.
2. It has the advantage of having a very deep port, so it is very suitable for handling very large vessels.
3. It mainly deals with iron-ore shipping on a large scale.
4. Odisha, Chhattisgarh and Jharkhand form their own hinterland.
10. Visakhapatnam Port:

1. It is a locked harbor located in Andhra Pradesh.

2. Attached to the sea by a canal cut through solid rock and sand.
3. Managing various commodities such as iron-ore, petroleum and general goods the outer port has been established.
4. Andhra Pradesh is the main port of the port.

11. Chennai Port:

1. Chennai artificial harbor is one of the oldest ports on the east coast. Built in 1859.
2. Due to the shallow water near the coast, it is not suitable for large vessels.
3. Tamil Nadu and Pondicherry formed its hinterland.

12. Ennore Port:

1. The newly developed port is located 25 km north of Chennai.

2. Designed to reduce pressure in Chennai harbor.
13. Tuticorin Port:

1. Another port built to ease the pressure of the Chennai port.

2. The port carries a large amounts of raw materials such as coal, salt, grain, edible oil, sugar, chemicals and petroleum
products.

Airports:

Air transport plays an important role in international trade.

The benefits are as follows:
1. Air transport is very useful for managing high value or perishable goods over long distances.
2. It takes less time to move goods.

Disadvantage is as follows:
1. Air travel is very expensive.
2. Not suitable for the transport of heavy and bulky items.
Therefore, having these disadvantages of air transport is not preferred / less in international trade compared to sea routes.
Currently, there are 12 international airports. That's right; Ahmedabad, Amritsar, Bengaluru, Chennai, Delhi, Goa, Guwahati,
Hyderabad, Kochchi, Kolkata, Mumbai and Thiruvananthapuram. Apart from these, there are 112 domestic airports in India.

Questions For Practice

1. What is the carrying capacity of 3. What is India's share in world 5. Which port is called the ‘Queen of
Indian port goods (millions of tons)? trade? the Arabian Sea’?
(a) 100 (b) 300 (a) 1% (b) 2% (a) Mangalore (b) Kochchi
(c) 500 (d) 700 (c) 3% (d) 4% (c) Mumbai (d) Kandla
4. What are the major shipments from 6. When was the Jawaharlal Nehru
2. India has ______ large ports?
New Mangalore ports? port trust built?
(a) 6 (b) 8
(a) Coal (b) Iron ore (a) 1939 (b) 1979
(c) 10 (d) 12 (c) Copper (d) Micah (c) 1989 (d) 1969
7. Most of India's foreign trade is made (a) Internal trade 23. Which country is the largest trading
up of the following? (b) External trade partner of India?
(a) Land and sea (c) International trade (a) Britain (b) China
(b) Earth and air (d) Local trade (c) the USA (d) Pakistan
(c) Sea and wind (d) The sea 16. What is the total number of major 24. Name the new port of India which is
8. Trade between the two countries is ports in India? developed to relieve Mumbai Port?
called? (a) 10 (b) 11 (a) Jawaharlal Nehru Port
(a) Internal trade (c) 12 (d) 14 (b) Kandla
(b) Foreign trade 17. Most of India’s foreign trade is (c) Kolkata
(c) International trade carried through: (d) Visakhapatnam
(d) Local trading (a) Land and sea (b) Land and air 25. What was the reason for the decline
9. What is the status of the Nava Shave (c) Sea and air (d) Sea of import of food grains?
port? 18. What is the trade between two (a) Green revolution
(a) Gujarat (b) Goa countries called? (b) Decline in population
(c) Maharashtra (d) Karnataka (a) Local trade (c) Decrease in the birth rate
10. Which country is India's largest (b) Internal trade (d) Import duty
trading partner? (c) External trade 26. Which one of the following is India’s
(a) Britain (b) China (d) International trade largest trading partner (2004-05)?
(c) USA (d) Pakistan (a) UK (b) China
19. Which element of India’s
11. What is the major export from New International trade has changed? (c) Germany (d) USA
Mangalore ports? (a) Amount 27. What is India’s share in world
(a) Coal (b) Iron ore (b) Composition trade?
(c) Copper (d) Mica (c) Direction (a) 1% (b) 2%
(d) All the above (c) 3% (d) 4%
12. What is the value of adverse balance
of trade in India in 2011? 20. Which one of the following is a land 28. Which one of the following is a
(a) 405,989 Crore locked Harbour? landlocked harbor?
(b) 540,818 Crore (a) Vishakhapatnam (a) Visakhapatnam
(c) 103,976 Crore (b) Haldia (b) Haldia
(d) 450,112 Crore (c) Ennore (c) Ennore (d) Mumbai
(d) Mumbai
13. When was Chennai port built? 29. Which element of India’s
(a) 1839 (b) 1849 21. Which one of the Indian Sea Ports International trade has changed?
(c) 1859 (d) 1869 provides facilities to the land-locked (a) Amount
14. Which of the following is not an neighboring countries? (b) Composition
(a) Nhava Sheva (c) Direction
important item which India exports
(b) Kandla (d) All the above
to other countries?
(a) Manufactured goods (c) Kolkata 30. What is the trade between two
(d) Visakhapatnam
(b) Readymade garments countries called?
(c) Cotton yarn 22. What is the cargo handling capacity (a) Local trade
(d) Machinery of Indian ports (million tonnes)? (b) Internal trade
(a) 100 (b) 300 (c) External trade
15. Trade between two countries is
termed as? (c) 500 (d) 700 (d) International trade

Solutions
1. (c) 4. (b) 7. (c) 10. (c) 13. (c) 16. (c) 19. (d) 22. (c) 25. (a) 28. (a)
2. (d) 5. (b) 8. (c) 11. (b) 14. (d) 17. (c) 20. (a) 23. (c) 26. (d) 29. (d)
3. (a) 6. (c) 9. (c) 12. (b) 15. (c) 18. (c) 21. (c) 24. (a) 27. (a) 30. (c)