Exports and imports are the basis of foreign trade. Today we have discussed essential things about the foreign trade of India.
Foreign Trade of India
In India, having business with other countries is nothing new. Even in BC, India was used to trading with other countries. The Periplus of the Erythraean Sea is a text on trade between countries, including India, written by an unnamed sailor from Alexandria around AD 100.
Europeans have been trading with the rulers of India via the sea route since 1498. Spices including pepper, ginger, cinnamon, cardamom, nutmeg, mace, and cloves were the most famous exports.
Between 1947 and 1991, the Indian economy’s foreign trade mainly closed. Imports were exposed to severe tariffs. FDI (foreign direct investment) was restricted. On the other hand, foreign trade improved considerably after 1991’s liberalization.
Exports and Imports
India now exports over 7500 commodities to about 190 countries and buys approximately 6000 commodities from about 140 nations. Exports and imports aren’t confined to just commodities (merchandise). Service is yet another essential export/import item. To simplify things, consider the following summary of India’s foreign trade:
- Export of goods
- Export of services
- Import of goods
- Import of services
India’s Export Trade: What You Need to Know
Petroleum products, precious stones, medication formulations and biologicals, gold, and other precious metals are commonly exported. The value of India’s merchandise exports is less than its merchandise imports.
However, India’s Export Trade balance improved from 2009 to 2014, the vast majority of the gain in the latter period being due to a more than 50% fall in petroleum prices in 2016-17.
India’s Imports: What You Should Know
The following are the top import items:
- crude petroleum, gold, petroleum products, coal, coke, and briquettes.
- The value of India’s service exports is more significant than its service imports. India desires a net service surplus as a result of this.
- On the other hand, India’s net services surplus has continuously dropped with GDP. India’s service surplus now covers about half of the merchandise balance.
What importance does foreign trade have in India?
Each country’s economy relies heavily on foreign trade. Foreign trade helps a country’s use of natural resources and export surplus production, thus adding significantly to a country’s GDP.
What do you know about India’s international trade?
India’s foreign trade includes all imports and exports to and from the country. The Ministry of Commerce and Industry manages it at the federal level.
What is the source of India’s unfavorable foreign trade?
India’s ongoing trade deficit is because it imports much more than it exports. The growing trade imbalance is likely due to the rising price of crude oil and rapid economic development, which means that export trade must now catch up to demand.
In recent years, the foreign trade of India has become an essential part of Indian government strategies. Every government wants to expand exports because it benefits the producer and the government. Excise duties (import-export charges and taxes) are a significant part of the government’s overall revenue collection.