CAPF-AC (Assistant Commandant) Exam Study Material :
Indian Economy - India’s Foreign Trade
India’s Foreign Trade
Composition of Foreign Trade
Composition of trade refers to items of exports and imports.
After independence, there has been as substantial change in the composition of
India’s international trade. Following observations highlight the principal
changes with regard to export and import items of India’s international trade:
Decline in Percentage Share of Agriculture Exports: There
has been a significant decline in percentage share of agriculture items in
total exports. It happened owing to the facts:
(i) that India started using its farm products as raw material for its
domestic industry, and
(ii) that a substantial rise in India’s population has raised domestic
requirement of farm products.
Decline in Percentage Share of Conventional Items:
Conventional items of India’s exports include jute, tea, food grains and
minerals. These items constituted the bulk of India’s exports at the time of
independence. But with planned development programmes in place, domestic demand
for the conventional items has tended to rise. Accordingly, their share in total
exports has tended to fall.
Increase in Percentage Share of Manufactured Goods:
Percentage share of manufactured goods in total exports has tended to rise. This
points to the fact that planned development programmes (launched after
independence have started yielding results.
These changes in the composition of India’s foreign trade
suggest that Indian economy is no longer a static and backward economy,
surviving on the performance and prosperity of primary sector. It is showing
significant signs of structural transformation. There has been a perceptible
transformation from the predominance of primary sector to that of secondary and
tertiary sectors of the economy in the context of composition of exports.
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