Class 12th India People and Economy Chapter 8 INTERNATIONAL TRADE Exercise Solution (English Medium)
EXERCISES
1. Choose the right answers of the following from the given options.
(i) Trade between two countries is termed as
(a) Internal trade
(b) External trade
(c) International trade
(d) Local trade
Answer - (c) International trade
Answer - (c) International trade
Note - Internal, as well as local trade happens within the geographical expanse of a country.
External trade refers to the total trade a particular country has with the rest of the world.International trade refers to the trade between two (or more) countries, though bilateral trade has been a better term.
(ii) Which one of the following is a land locked harbour?
(a) Vishakhapatnam
(b) Mumbai
(c) Ennor
(d) Haldia
(iii) Most of India’s foreign trade is carried through
(a) Land and sea
(b) Land and air
Answer - (a) Vishakhapatnam
Note - Vishakhapatnam Port in Andhra Pradesh is a landlocked port behind Dolphin Rock, connected to the sea by a channel cut through solid rock and sand. It is the safest port of the country.
(a) Land and sea
(b) Land and air
(c) Sea and air
(d) Sea
2. Answer the following questions in about 30 words.
(i) Mention the characteristics of India’s foreign trade.
Answer - India’s international trade has undergone a sea change in recent years in terms of volume, composition as well as direction. Although India’s contribution in the world trade is as low as one per cent of the total volume, yet it plays a significant role in the world economy. In 1950-51, India’s external trade was worth Rs.1,214 crore, which rose to Rs. 44,29,762 crores in 2016-17. There are numerous reasons for this sharp rise in overseas trade, such as the momentum picked up by the manufacturing sectors, the liberal policies of the government and the diversification of markets.
Answer - (c) Sea and air
Note - Most of India’s foreign trade is carried through sea and air routes. However, a small portion is also carried through land route to neighbouring countries like Nepal, Bhutan, Bangladesh and Pakistan.
(i) Mention the characteristics of India’s foreign trade.
Answer - India’s international trade has undergone a sea change in recent years in terms of volume, composition as well as direction. Although India’s contribution in the world trade is as low as one per cent of the total volume, yet it plays a significant role in the world economy. In 1950-51, India’s external trade was worth Rs.1,214 crore, which rose to Rs. 44,29,762 crores in 2016-17. There are numerous reasons for this sharp rise in overseas trade, such as the momentum picked up by the manufacturing sectors, the liberal policies of the government and the diversification of markets.
The nature of India’s foreign trade has changed over the years. Though there has been an increase in the total volume of import and export, the value of import continued to be higher than that of exports.
(ii) Distinguish between port and harbour.
Answer - A port is a man-made artificial structure for boats and vessels to dock, whereas harbours are natural locations where docking of sea-going vessels are possible without much altering of the landscape. In addition, ports are commercial in nature where international trade takes place. Harbours are, generally, areas where sea-going vessels are stored/anchored.
(iii) Explain the meaning of hinterland.
Answer - Hinterland refers to the area which is further inland, and usually away from the coast or the banks of major rivers. In general, these regions are richly endowed with natural resources.
The surrounding area connected to a port, through which the produced goods reach abroad in the form of exports and the imported goods from abroad reach the market.
(iv) Name important items which India imports from different countries.
Answer - Important items India imports from different countries are:
1. Fertilizers
2. Petroleum and petroleum products
3. Machine and equipment
4. Special steel
5. Edible oil
6. Chemicals
7. Electronic goods
Answer - Important items India imports from different countries are:
1. Fertilizers
2. Petroleum and petroleum products
3. Machine and equipment
4. Special steel
5. Edible oil
6. Chemicals
7. Electronic goods
(v) Name the ports of India located on the east coast.
Answer - The ports located in the East Coast of India are:
1. Kolkata Port
2. Haldia Port
3. Paradwip Port
4. Vishakhapatnam Port
5. Chennai Port
6. Ennore Port
7. Tuticorin port
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| Western and Eastern Coastal Ports in India |
3. Answer the following questions in about 150 words.
(i) Describe the composition of export and import trade of India.
Answer - Composition of India’s trade with the rest of the world has never remained a constant. Though the composition of trade has undergone changes, the volume of imports continued to be higher than that of exports.
In terms of export commodities. The share of agriculture and allied products has declined, whereas, shares of petroleum and crude products and other commodities have increased. The shares of ore minerals and manufactured goods have largely remained constant since 2009-10. Tougher international competition has resulted in the decline of export of traditional items. Manufacturing sector wins in terms of total value of export, accounting for about 73.6%. Engineering goods have shown significant growth too.
In terms of import commodities. The earlier foodgrain import was replaced by fertilisers and petroleum. Machine and equipment, special steel, edible oil and chemicals constitute the largest share in India’s import basket. Petroleum has seen a steep rise in import as it is used not just as a fuel but also a raw material in many industries. Pearls and semi-precious stones, gold and silver, metalliferous ores and metal scrap, non-ferrous metals, electronic goods, etc. forms the other major import commodities.
India keeps a net imbalance in terms of foreign trade in commodities, however India’s potential lies in the service sector. India has never been able to fully industrialize its economy, from primary activities (in the 50’s) India’s economy has directly jumped to become a service-dominated economy (by the 1990’s). India has a net positive balance in the in the international exchange of services, which more than offsets the negative balance in commodities.
(i) Describe the composition of export and import trade of India.
Answer - Composition of India’s trade with the rest of the world has never remained a constant. Though the composition of trade has undergone changes, the volume of imports continued to be higher than that of exports.
In terms of export commodities. The share of agriculture and allied products has declined, whereas, shares of petroleum and crude products and other commodities have increased. The shares of ore minerals and manufactured goods have largely remained constant since 2009-10. Tougher international competition has resulted in the decline of export of traditional items. Manufacturing sector wins in terms of total value of export, accounting for about 73.6%. Engineering goods have shown significant growth too.
In terms of import commodities. The earlier foodgrain import was replaced by fertilisers and petroleum. Machine and equipment, special steel, edible oil and chemicals constitute the largest share in India’s import basket. Petroleum has seen a steep rise in import as it is used not just as a fuel but also a raw material in many industries. Pearls and semi-precious stones, gold and silver, metalliferous ores and metal scrap, non-ferrous metals, electronic goods, etc. forms the other major import commodities.
India keeps a net imbalance in terms of foreign trade in commodities, however India’s potential lies in the service sector. India has never been able to fully industrialize its economy, from primary activities (in the 50’s) India’s economy has directly jumped to become a service-dominated economy (by the 1990’s). India has a net positive balance in the in the international exchange of services, which more than offsets the negative balance in commodities.
(ii) Write a note on the changing nature of the international trade of India.
Answer - Changing Patterns of the Composition of India’s Export - The composition of commodities in India’s international trade has been undergoing a change over the years. The share of agriculture and allied products has declined, whereas shares of petroleum and crude products and other commodities have increased. The shares of ore minerals and manufactured goods have largely remained constant over the years from 2009-10 to 2010-11and 2015-16 to 2016-17. The decline in traditional items is largely due to the tough international competition. Amongst the agricultural products, there is a decline in the export of traditional items, such as coffee, cashew, etc., though an increase has been registered in floricultural products, fresh fruits, marine products and sugar, etc. Manufacturing sector alone accounted for 73.6 per cent of India’s total value of export in 2016-17. Engineering goods have shown a significant growth in the export. China and other East Asian countries are our major competitors. Gems and jewellery contributes a larger share of India’s foreign trade.
Changing Patterns of the Composition of India’s Import - India faced serious food shortage during 1950s and 1960s. The major item of import at that time was foodgrain, capital goods, machinery and equipment. The balance of payment was adverse as imports were more than export in spite of all the efforts of import substitution. After 1970s, foodgrain import was discontinued due to the success of green revolution but the energy crisis of 1973 pushed the prices of petroleum, and import budget was also pushed up. Foodgrain import was replaced by fertilisers and petroleum. Machine and equipment, special steel, edible oil and chemicals largely make the import basket.
There is a steep rise in the import of petroleum products. It is used not only as a fuel but also as an industrial raw material. It indicates the tempo of rising industrialization and better standard of living. Sporadic price rise in the international market is another reason for the same. Import of capital goods maintained a steady increase due to rising demand in the export-oriented industrial and domestic
sectors. Non-electrical machinery, transport equipment, manufacturers of metals and machine tools were the main items of capital goods. Import of food and allied products declined with a fall in imports of edible oils. Other major items of India’s import include pearls and semi-precious stones, gold and
silver, metalliferous ores and metal scrap, non-ferrous metals, electronic goods, etc.