Explain the volume of India's foreign trade after independence.long answer
Foreign trade primarily involves the amount of goods that are exported (to other countries) and goods that are imported by the home country (from foreign countries). In India, this import and export of goods forms an essential part of the overall economic activities. This can be derived from the fact that the share of foreign trade in India's GDP increased from 14.6 percent in 1990-91 to 24.1 percent in 2003-04. This trend of exports and imports has been continuously increasing since then.
The following table shows the major trends in India's foreign trade.
India's Exports and Imports: 2004-05 to 2011-12
Source: NCERT Page-270,Table 11.2
From the above table, the following facts can be derived.
a. Since 2004-05, a continuous rise has been in both the amounts of exports and imports. As we can see that in 2004-05, the total value of exports were Rs.3,75,340 crores. However, this amount increased to Rs. 11,42,649 crores in 2010-11. Similarly, the amount of imports in 2004-05 were Rs 5,01,065 crores which increased to Rs 16,83,467 crores in 2010-11. Thus, from this we can infer that a tremendous and impressive growth was experienced in India since 2004.
b. Despite the tremendous increase in both exports and imports, an increasing trend of trade balance was also seen during the same period. This trade balance depicts the excess of exports over imports. As we can see that trade balance was negative in all the years and was continuously rising, we can thus, infer two important facts:
i. The value of imports was always more than exports.
ii. The rate of increase in imports was always higher than the rate of increase in exports.
Hence, it can be concluded that both imports and exports have experienced a phenomenal growth during the last few years. However, the total value of exports has been lower than the imports (as inferred from the negative trade balance from the last seven years).