Gujarat BoardEnglish MediumSTD 12 CommerceEconomicsFOREIGN TRADE3 Marks
Question
Discuss in detail the change in import-export structure after $1991 .$
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Answer
$(A)$ Change in import structure:
After $1991,$ the nature of trade changed significantly in India. The import of food grains and other agricultural goods and capital goods declined.
The share of traditional exports like tea, coffee, jute etc. in total exports declined while that of industrial goods and non-traditional items increased. For example, India started exporting software.
In $1961,$ the share of food imports in India’s total merchandise imports was $19.1\%$ which declined to just $3.9\%$ in $2014-15.$ This shows that India attained self-reliance in producing grains and other food items.
As India developed, it started generating more more capital and capital intensive goods. So, India’s import of such items decreased significantly. In $1960-61,$ the share of capital intensive goods in India’s merchandise imports was as high as $31.7\%$ which declined to $9.8\%$ in $2014-15.$
In $1960-61,$ the import of new items was only $2.2\%$ of the total merchandise. This increased to $46.5\%$ in $2014-15.$ This shows that as India developed in a variety of sectors it needed more and more new types of items and so India’s imports of new types of items increased.
$(B)$ Change in export structure:
As India developed, the nature of export also changed.
In $1960-61,$ the primary sector export consisted of $44.2\%$ of total export. It reduced to as low as $12.3\%$ in $2014-15.$ In this, the share of tea and coffee exports declined from $19.3\%$ to $0.2\%$ and that of jute export declined from $21\%$ to $0.2\%.$
Similarly, the share of leather products in exports declined from $4.4\%$ in $1960-61$ to $1.3\%$ in $2014-15$ and that of cloth declined from $10\%$ to $2\%.$
Against this, the export of readymade garments increased from $0.1\%$ in $1960-61$ to $5.4\%$ in $2014-15.$
The share of manufactured goods in total merchandise exports was $45.3\%$ which increased to $66.7\%$ in $2014-15.$
In $1960-61,$ India exported only $1.1\%$ of petroleum products. This increased to $18.5\%$ in $1914-15.$
Conclusion:
There is a considerable change in the foreign trade pattern since independence. India has developed significantly in all these years and hence both the volume and pattern of import and export trade have also significantly changed.
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