Foreign trade of india

Foreign Trade: 8 Salient Features of Foreign Trade of India – Explained!

Some of the salient features of foreign trade of India are:
1. Negative or Unfavourable Trade
2. Diversity in Exports
3. Worldwide Trade
4. Change in Imports
5. Maritime Trade
6. Trade through a few Selected Ports Only
7. Insignificant Place of India in the World Overseas Trade 
8. State Trading!

1. Negative or Unfavourable Trade:

India had to import various items like heavy machinery, agricultural implements, mineral oil and metals on a large scale after Independence for economic growth.

But our exports could not keep pace with our imports which left us with negative or unfavourable trade.

2. Diversity in Exports:

Previously, India used to export its traditional commodities only which included tea, jute, cotton textile, leather, etc. But great diversity has been observed in India’s export commodities during the last few years. India now exports over 7,500 commodities. Since 1991, India has emerged as a major exporter of computer software and that too to some of the advanced countries like the USA and Japan.

3. Worldwide Trade:

India had trade links with Britain and a few selected countries only before Independence. But now India has trade links with almost all the regions of the world. India exports its goods to as many as 190 countries and imports from 140 countries.

4. Change in Imports:

Earlier we used to import food-grains and manufactured goods only. But now oil is the largest single commodity imported by India. Both the imports as well as exports of pearls and precious stones have increased considerably during the last few years. Our other important commodities of import are iron and steel, fertilizers, edible oils and paper.

5. Maritime Trade:

About 95 per cent of our foreign trade is done through sea routes. Trade through land routes is possible with neighbouring countries only. But unfortunately, all our neighbouring countries including China, Nepal, and Myanmar are cut off from India by lofty mountain ranges which makes trade by land routes rather difficult. We can have easy access through land routes with Pakistan only but the trade suffered heavily due to political differences between the two countries.

6. Trade through a few Selected Ports Only:

We have only 12 major ports along the coast of India which handle about 90 per cent overseas trade of India. Very small amount of foreign trade is handled by the remaining medium and small ports.

7. Insignificant Place of India in the World Overseas Trade:

Although India has about 16 per cent of the world’s population, her share in the world overseas trade is less than one per cent. This shows the insignificant place of India in the world’s overseas trade. This is, however, partly due to very large internal trade, vast dimensions of the country provide a solid base for inter-state trade within the country. Europe is divided into a large number of smaller countries and the international trade is quite high (trade counted twice, first time as exports and second times as imports).

8. State Trading:

Most of India’s overseas trade is done in public sector by state agencies and very little trade is done by individuals.