INTERNATIONAL TRADE
International trade is a crucial aspect of global economics, facilitating mutual benefits among nations due to interdependence. India's international trade dynamics have witnessed significant transformations in recent years, encompassing changes in volume, composition, and trade partners. Despite India's trade volume constituting only about one per cent of the global total, its role in the world economy remains substantial.
Let's analyze the growth in India's international trade from 1950-51 to 2016-17. In 1950-51, India's external trade was valued at Rs. 1,214 crore, which surged to Rs. 44,29,762 crore in 2016-17.
This remarkable growth can be attributed to several factors such as the expansion of manufacturing sectors, the implementation of liberal government policies, and the exploration of diverse international markets.
Over the years, the nature of India's foreign trade has evolved, as indicated by changes in import-export dynamics. While both import and export volumes have increased, imports have consistently surpassed exports in terms of value. This shift highlights the need for strategic trade policies to balance trade deficits and enhance competitiveness in global markets.
1. Changing Pattern of India's Exports and Imports
India's international trade landscape has witnessed notable shifts in the composition of exports and imports over the years.
Changing Pattern of India’s Exports
- The composition of India's exports has evolved significantly, with a decline in the share of agriculture and allied products. Conversely, there has been an increase in the shares of petroleum and crude products along with other commodities.
- While ore minerals and manufactured goods have maintained relatively constant shares, traditional agricultural items like coffee and cashews have faced tough international competition.
- However, there has been growth in the export of floricultural products, fresh fruits, marine products, and sugar.
- The manufacturing sector has played a pivotal role, constituting 73.6% of India’s total export value in 2016-17.
- Engineering goods, in particular, have shown significant growth in exports, although India faces stiff competition from China and other East Asian countries. Gems and jewellery also contribute significantly to India’s foreign trade.
Changing Patterns of India’s Imports
- India's import composition has also undergone substantial changes. Historically, food grain was a major import item, but it has been replaced by fertilizers and petroleum due to the success of the Green Revolution and the energy crisis of 1973.
- Capital goods, machinery, special steel, edible oil, and chemicals now dominate India's import basket.
- A sharp rise in petroleum product imports, driven by industrialization and improving standards of living. Import of capital goods has steadily increased to meet demand in export-oriented industries and the domestic sector.
- Other major imports include pearls, semi-precious stones, gold, silver, metalliferous ores, metal scrap, non-ferrous metals, and electronic goods.
Direction of Trade
- India has trade relations with numerous countries and major trading blocs globally. The country aims to double its share in international trade in the coming years.
- To achieve this, India has adopted measures such as import liberalization, reduced import duties, delicensing, and transitioning from process to product patents.
- While most of India’s foreign trade occurs via sea and air routes, there is also trade through land routes with neighbouring countries like Nepal, Bhutan, Bangladesh, and Pakistan.
2. Sea Ports as Gateways of International Trade
India's extensive coastline and historical seafaring traditions have led to the development of ports as crucial gateways for international trade.
- Kandla Port: Located at the head of the Gulf of Kutch, Kandla has emerged as a major port serving the western and northwestern parts of India. It plays a significant role in handling petroleum products, fertilizers, and large quantities of cargo.
- Mumbai Port: Situated on India's west coast, Mumbai Port is the country's largest and busiest port. It serves as a pivotal hub for trade with countries in the Middle East, Mediterranean, North Africa, North America, and Europe. Its hinterland includes states like Maharashtra, Gujarat, Madhya Pradesh, Uttar Pradesh, and parts of Rajasthan.
- Jawaharlal Nehru Port (Nhava Sheva): Developed as a satellite port to ease pressure on Mumbai Port, Nhava Sheva has become India's largest container port, focusing on handling containerized cargo efficiently.
- Marmagao Port: Located in Goa, Marmagao Port gained importance for iron ore exports to Japan after remodelling in 1961. The Konkan railway has extended its hinterland reach to Karnataka, Goa, and southern Maharashtra.
- New Mangalore Port: Serving Karnataka's export needs, New Mangalore Port handles various goods such as iron ore, fertilizers, petroleum products, edible oils, coffee, tea, and more.
- Kochi Port: Known as the 'Queen of the Arabian Sea,' Kochi Port in Kerala caters to the needs of southern Karnataka, southwestern Tamil Nadu, and serves as a strategic link on the Suez-Colombo route.
- Kolkata Port: Located on the Hugli River, Kolkata Port was developed during the British era. While it has lost some significance, it still serves regions like West Bengal, Bihar, Uttar Pradesh, Jharkhand, Sikkim, and northeastern states. It also extends facilities to neighbouring landlocked countries like Nepal and Bhutan.
- Haldia Port: Constructed downstream from Kolkata, Haldia Port handles bulk cargo such as iron ore, coal, petroleum products, jute, and cotton products.
- Paradip Port: Situated in Odisha's Mahanadi delta, Paradip Port specialises in handling large-scale iron ore exports and serves the hinterland regions of Odisha, Chhattisgarh, and Jharkhand.
- Visakhapatnam Port: A crucial port in Andhra Pradesh, Visakhapatnam handles iron ore, petroleum, and general cargo, serving the hinterlands of Andhra Pradesh and Telangana.
- Chennai Port: One of the oldest ports on the east coast, Chennai Port serves Tamil Nadu and Puducherry, while Ennore Port, developed north of Chennai, serves as an additional relief port.
- Tuticorin Port: Developed to reduce pressure on Chennai Port, Tuticorin deals with a diverse range of cargo and serves Tamil Nadu's trade needs.
These ports collectively contribute significantly to India's maritime trade, handling diverse cargo and fostering economic growth across various regions.
3. Major Airports in India
Air transport plays a crucial role in international trade due to its speed and efficiency, especially for high-value or perishable goods. However, it is generally not suitable for heavy or bulky commodities due to cost considerations.
- Ahmedabad Airport Serving the city of Ahmedabad in Gujarat, this airport is a key hub in western India.
- Bengaluru Airport Located in Karnataka, Bengaluru Airport is a major aviation centre and a gateway to southern India.
- Chennai Airport Situated in Tamil Nadu, Chennai Airport is an important international and domestic terminal in South India.
- Delhi Airport Indira Gandhi International Airport in Delhi is one of the busiest airports in India, serving as a major international and domestic hub.
- Goa Airport Also known as Dabolim Airport, it serves the coastal state of Goa, a popular tourist destination.
- Guwahati Airport Located in Assam, Guwahati Airport connects northeastern India with other parts of the country.
- Hyderabad Airport Rajiv Gandhi International Airport in Hyderabad is a prominent airport in southern India with extensive domestic and international connections.
- Kolkata Airport Netaji Subhas Chandra Bose International Airport in Kolkata serves the eastern region of India.
- Mumbai Airport Chhatrapati Shivaji Maharaj International Airport in Mumbai is a major international gateway and one of the busiest airports in India.
- Thiruvananthapuram Airport Located in Kerala, this airport serves the capital city and is an important link to the southern state.
- Srinagar Airport Also known as Sheikh ul-Alam International Airport, it serves the picturesque region of Srinagar in Jammu and Kashmir.
- Jaipur Airport Serving the city of Jaipur in Rajasthan, this airport caters to domestic and international flights.
- Calicut Airport Located in Kerala, Calicut Airport is a significant airport in the Malabar region.
- Nagpur Airport Dr. Babasaheb Ambedkar International Airport in Nagpur serves central India.
- Coimbatore Airport Situated in Tamil Nadu, Coimbatore Airport connects the city with various domestic and international destinations.
- Cochin Airport Cochin International Airport in Kerala is a major aviation centre in southern India.
- Lucknow Airport Chaudhary Charan Singh International Airport in Lucknow is an important airport in northern India.
- Pune Airport Lohegaon Airport in Pune serves the city and surrounding areas in Maharashtra.
- Chandigarh Airport Chandigarh International Airport serves the union territory of Chandigarh and nearby regions.
- Mangaluru Airport Located in Karnataka, Mangaluru Airport connects the coastal city with various destinations.
- Visakhapatnam Airport Also known as Vizag Airport, it serves the port city of Visakhapatnam in Andhra Pradesh.
- Indore Airport Devi Ahilya Bai Holkar Airport in Indore is a significant airport in Madhya Pradesh.
- Patna Airport Jay Prakash Narayan International Airport in Patna serves Bihar and neighbouring areas.
- Bhubaneswar Airport Biju Patnaik International Airport in Bhubaneswar is an important airport in Odisha.
- Kannur Airport Located in Kerala, Kannur International Airport is a relatively new airport serving northern Kerala.
