India’s Foreign Trade
INDIA’S FOREIGN TRADE
Foreign trade or international trade refers to the trading of goods between countries. Thus, international trade is an extension of internal trade i.e., trade between two different regions within a country. Just like as single region within a country cannot produce everything it needs by itself, one single economy cannot produce every commodity all by itself. This could be due to differences in the availability of natural resources, skills of people, etc. Therefore, it would be advantageous for a country to indulge in trade with other countries, by exporting those commodities which it produces cheaper in exchange for what others can produce at a lower cost.
Foreign trade also facilitates the dissemination of technical knowledge, transmission of ideas, and import of know-how/skills, managerial talents and entrepreneurship. In addition, foreign trade encourages movement of foreign capital. In totality, foreign trade can have a profound impact on the growth of an economy in terms of production, employment, technology, resource utilisation and so on.
The origin of India’s foreign trade can be traced back to the age of the Indus
Valley civilisation. But the growth of foreign trade gained momentum during the
British rule. During that period, India was a supplier of food stuffs and raw materials to England and an importer of manufactured goods. However, organised attempts to promote foreign trade were made only after
Independence, particularly with the onset of economic planning. Indian economic planning completed five decades. During this period, the value, composition and direction of India’s foreign trade have undergone significant changes.
External Sector
6
India’s foreign trade has come a long way since 1950-51. The values of both exports and imports have increased several times over the period (Table 13.1).
The value of exports rose from Rs. 606 crore in 1950-51 to Rs. 1,06465 crore in 1995-96. The value of
Foreign trade or international trade refers to the trading of goods between countries. Thus, international trade is an extension of internal trade i.e., trade between two different regions within a country. Just like as single region within a country cannot produce everything it needs by itself, one single economy cannot produce every commodity all by itself. This could be due to differences in the availability of natural resources, skills of people, etc. Therefore, it would be advantageous for a country to indulge in trade with other countries, by exporting those commodities which it produces cheaper in exchange for what others can produce at a lower cost.
Foreign trade also facilitates the dissemination of technical knowledge, transmission of ideas, and import of know-how/skills, managerial talents and entrepreneurship. In addition, foreign trade encourages movement of foreign capital. In totality, foreign trade can have a profound impact on the growth of an economy in terms of production, employment, technology, resource utilisation and so on.
The origin of India’s foreign trade can be traced back to the age of the Indus
Valley civilisation. But the growth of foreign trade gained momentum during the
British rule. During that period, India was a supplier of food stuffs and raw materials to England and an importer of manufactured goods. However, organised attempts to promote foreign trade were made only after
Independence, particularly with the onset of economic planning. Indian economic planning completed five decades. During this period, the value, composition and direction of India’s foreign trade have undergone significant changes.
External Sector
6
India’s foreign trade has come a long way since 1950-51. The values of both exports and imports have increased several times over the period (Table 13.1).
The value of exports rose from Rs. 606 crore in 1950-51 to Rs. 1,06465 crore in 1995-96. The value of