International Trade

2.1 Core concepts

• International trade is mutually beneficial since no country is self-sufficient; India's share in world trade is about 1 per cent of the total volume, yet it plays a significant role in the world economy. (NCERT Ch. 8, §Intro, p. 86)
• India's external trade rose from Rs. 1,214 crore in 1950-51 to Rs. 77,19,796 crore in 2020-21 — an enormous expansion driven by the momentum of the manufacturing sector, liberal government policies, and diversification of markets. (NCERT p. 86)
• The nature of India's foreign trade has changed: although the total volume of both imports and exports has grown, the value of imports has consistently exceeded the value of exports, generating a widening trade deficit. (NCERT Table 8.1, p. 87)
• Trade balance (Rs. crore): −1,25,725 (2004-05) → −5,18,202 (2009-10) → −8,10,423 (2013-14) → −7,25,082 (2016-17) → −14,25,753 (2021-22) — a near-doubling between 2016-17 and 2021-22. (NCERT Table 8.1, p. 87)
• Composition of exports (2015-16 → 2021-22, % share, Table 8.2):
• Agriculture and allied products: 12.6% → 11.9% (declined)
• Ore and minerals: 1.6% → 2.0% (roughly constant)
• Manufactured goods: 72.9% → 67.8% (declined but still dominant)
• Crude and petroleum products: 11.9% → 16.4% (rose)
• Other commodities: 1.1% → 1.9% (rose). (NCERT p. 87)
• Manufacturing alone accounted for 67.8% of India's total export value in 2021-22. Engineering goods have shown significant growth; China and other East Asian countries are India's major competitors. Gems and jewellery contribute a larger share of India's foreign trade. (NCERT §Composition of Exports, p. 87)
• Decline in traditional export items (like cashew) is due to tough international competition; however, floricultural products, fresh fruits, marine products and sugar have registered increases. (NCERT p. 87)
• Composition of imports — historical shift: India faced serious food shortage in the 1950s-60s, so the major items of import were foodgrain, capital goods, machinery and equipment. After 1970s, foodgrain import was discontinued due to the success of the Green Revolution, but the energy crisis of 1973 pushed petroleum prices up and the import budget along with it; foodgrain was replaced by fertilisers and petroleum in the import basket. (NCERT §Composition of Imports, pp. 87-88)
• Current import basket includes machine and equipment, special steel, edible oil, chemicals, pearls and precious/semi-precious stones, gold and silver, non-ferrous metals.
• Composition of imports (2015-16 → 2021-22, % share, Table 8.4):
• Food and allied products: 5.1% → 4.4% (declined)
• Fuel (Coal, POL): 25.4% → 31.6% (rose sharply)
• Fertilisers: 2.1% → 2.3% (modest rise)
• Paper board manufacturing and newsprint: 0.8% → 0.7% (declined)
• Capital goods: 13.0% → 10.1% (steady decline)
• Others: 38.1% → 38.5% (roughly constant). (NCERT p. 88)
• Principal import commodities (2021-22, in crore rupees): Petroleum, oil and lubricants Rs. 12,07,803 crore (largest); non-ferrous metals Rs. 4,99,766 crore; chemical products Rs. 3,08,882 crore; pearls and precious stones Rs. 2,31,279 crore; edible oils Rs. 1,41,532 crore; fertilisers Rs. 1,05,796 crore; iron and steel Rs. 94,053 crore; medicinal and pharma products Rs. 67,545 crore; pulp and waste paper Rs. 11,934 crore. (NCERT Table 8.5, p. 89)
• Direction of trade (Imports, in crore rupees, Table 8.6): Asia and ASEAN dominate at Rs. 29,18,577 crore (2021-22), followed by Europe (Rs. 6,40,577), North America (Rs. 3,78,041), Africa (Rs. 3,68,156), Latin America (Rs. 1,61,995). (NCERT p. 89)
• Most of India's foreign trade is carried through sea and air routes; a small portion is also carried through the land route to neighbouring countries — Nepal, Bhutan, Bangladesh and Pakistan. (NCERT §Direction of Trade, p. 89)
• India aims to double its share in international trade within five years through import liberalisation, reduction in import duties, delicensing, and change from process to product patents. (NCERT p. 89)
• Sea ports as gateways: India is surrounded by sea on three sides and has a long coastline; the country has a long tradition of sea-faring, with many ports having the suffix pattan meaning "port." The west coast has more ports than the east coast. (NCERT §Sea Ports, p. 89)
• Partition cost India two important ports — Karachi (to Pakistan) and Chittagong (to East Pakistan/Bangladesh). To compensate, new ports — Kandla in the west and Diamond Harbour near Kolkata on river Hugli in the east — were developed. (NCERT p. 90)
• India has 12 major ports (central-government regulated) and about 200 minor or intermediate ports (state-government regulated). Major ports handle the larger share of total traffic. (NCERT p. 90)
• Port capacity has grown from 20 million tonnes in 1951 to more than 837 million tonnes in 2016. Private entrepreneurs have been invited for modernisation. (NCERT p. 90)
• West-coast major ports (with key facts and hinterlands):
• Deendayal (Kandla) Port — at the head of Gulf of Kachchh; built post-Partition to relieve Mumbai and serve western/north-western India; designed for petroleum, petroleum products and fertilisers; offshore terminal at Vadinar. (p. 90)
• Mumbai Port — a natural harbour and the biggest port of the country; close to Middle East, Mediterranean, North Africa, North America and Europe routes; 20 km long, 6-10 km wide, 54 berths, country's largest oil terminal; hinterland: MP, Maharashtra, Gujarat, UP and parts of Rajasthan. (p. 90)
• Jawaharlal Nehru Port at Nhava Sheva — a satellite port of Mumbai; largest container port in India. (p. 90)
• Mormugao Port — at entrance of Zuari estuary; natural harbour in Goa; remodelled in 1961 to handle iron-ore exports to Japan; Konkan Railway extended hinterland; hinterland: Karnataka, Goa, southern Maharashtra. (p. 90)
• New Mangalore Port — Karnataka; iron-ore and iron-concentrates, fertilisers, petroleum, edible oils, coffee, tea, wood pulp, yarn, granite stone, molasses. Hinterland: Karnataka. (p. 90)
• Cochin Port — at head of Vembanad Kayal; "Queen of the Arabian Sea"; natural harbour; close to Suez-Colombo route; serves Kerala, southern Karnataka and south-western Tamil Nadu. (p. 92)
• East-coast major ports (with key facts and hinterlands):
• Shyama Prasad Mookerjee (Kolkata) Port — on the Hugli river, 128 km inland from Bay of Bengal; British-era port; lost significance because of diversion of exports to Visakhapatnam, Paradwip and its satellite Haldia, and due to silt accumulation in the Hugli; hinterland: UP, Bihar, Jharkhand, West Bengal, Sikkim, NE states; serves land-locked Nepal and Bhutan. (p. 92)
• Haldia Port — 105 km downstream of Kolkata; satellite to relieve Kolkata congestion; handles iron-ore, coal, petroleum and products, fertilisers, jute, cotton yarn. (p. 92)
• Paradwip Port — in Mahanadi delta, about 100 km from Cuttack; has the deepest harbour suited to very large vessels; built mainly for large-scale iron-ore export; hinterland: Odisha, Chhattisgarh, Jharkhand. (p. 92)
• Visakhapatnam Port — Andhra Pradesh; a land-locked harbour, connected to the sea by a channel cut through solid rock and sand; outer harbour developed for iron-ore, petroleum and general cargo; hinterland: Andhra Pradesh and Telangana. (p. 92)
• Chennai Port — one of the oldest east-coast ports; artificial harbour built in 1859; shallow waters near the coast make it less suitable for large ships; hinterland: Tamil Nadu and Puducherry. (p. 92)
• Kamarajar (Ennore) Port — newly developed, 25 km north of Chennai, to relieve Chennai. (p. 92)
• V.O. Chidambaranar (Tuticorin) Port — also developed to relieve Chennai; handles coal, salt, foodgrains, edible oils, sugar, chemicals, petroleum products. (p. 92)
• Airports: 25 major airports were functioning per the Annual Report 2016-17 — including Ahmedabad, Bengaluru, Chennai, Delhi, Goa, Guwahati, Hyderabad, Kolkata, Mumbai, Thiruvananthapuram, Srinagar, Jaipur, Calicut, Nagpur, Coimbatore, Cochin, Lucknow, Pune, Chandigarh, Mangaluru, Visakhapatnam, Indore, Patna, Bhubaneswar and Kannur.
• UDAN scheme (since 2017): a total number of 73 unserved/underserved airports including 9 heliports and 2 water aerodromes have been operationalised. (NCERT §Airports, p. 92)
• Air transport has the advantage of carrying high-value or perishable goods over long distances in the least time, but is costly and unsuitable for heavy/bulky cargo — hence its smaller share than sea routes in international trade. (NCERT p. 92)

2.2 Definitions to memorise

2.3 Diagrams / processes to remember

• Fig. 8.1 (p. 86) — Extent of gap between exports and imports, 2013-14 to 2021-22 (Economic Survey 2022-23): A line graph in which the import line consistently sits above the export line, with the vertical gap widening towards 2021-22 — the visual proof of India's chronic trade deficit.
• Table 8.1 (p. 87) — India's Foreign Trade values: Exports, imports and trade balance for 2004-05, 2009-10, 2013-14, 2016-17 and 2021-22. The 2021-22 trade deficit of −Rs. 14,25,753 crore is the most-tested figure.
• Table 8.2 (p. 87) — Composition of India's Exports: % share by commodity group across four years — used in statement-based MCQs (manufacturing declined; crude petroleum products rose).
• Table 8.3 (p. 88) — Export of Principal Commodities (2021-22): Manufactured goods Rs. 21,32,296 crore is the dominant item by value.
• Table 8.4 (p. 88) — Composition of India's Imports: Fuel rose from 25.4% to 31.6%; capital goods fell from 13.0% to 10.1%.
• Table 8.5 (p. 89) — Principal Import Commodities: POL Rs. 12,07,803 crore is the biggest single import.
• Table 8.6 (p. 89) — Direction of India's Import trade: Asia & ASEAN dominate; expected in matching/ranking MCQs.
• Fig. 8.4 (p. 91) — India: Major Ports and Sea Routes: Map showing all 12 major ports (Deendayal, Mumbai, JNPT, Mormugao, New Mangalore, Cochin, Tuticorin, Chennai, Kamarajar, Visakhapatnam, Paradwip, Haldia, Shyama Prasad Mookerjee/Kolkata) and key sea-route distances. Map-based identification is high-yield.
• Fig. 8.5 (p. 93) — India: Air Routes: Shows convergence of national/international air routes at Delhi, Mumbai, Kolkata and Chennai — the four metropolitan air hubs.
• Trade-balance flow: Exports < Imports → Negative balance → Funded by foreign exchange reserves, capital inflows and remittances → Push to "double share in 5 years" via liberalisation and reduction of import duties.
• Port classification flow: 12 major (central) vs 200 minor (state) → west coast more numerous → some natural (Mumbai, Mormugao, Cochin), some artificial (Chennai), one land-locked (Visakhapatnam), satellites (JNPT, Haldia, Ennore) → modernisation via private sector.

2.4 Common confusions / NTA trap points

• Mumbai vs Jawaharlal Nehru Port: Mumbai is the biggest and a natural harbour; Nhava Sheva (JNPT) is the largest container port — students often swap them.
• Visakhapatnam is the land-locked harbour (channel through rock and sand), not Mumbai or Haldia — Exercise 1(ii) directly tests this.
• Chennai is an artificial harbour built in 1859 with shallow waters; it is not suitable for very large ships — Paradwip has the deepest harbour.
• The Green Revolution allowed India to stop importing foodgrain after the 1970s, but the 1973 energy crisis then pushed petroleum and fertilisers into the import basket — common assertion-reason trap.
• Manufacturing's share in exports has declined from 72.9% (2015-16) to 67.8% (2021-22); students wrongly assume it has risen because total exports rose.
• Crude petroleum products in exports rose from 11.9% to 16.4% — not declined; this catches students out who associate India with petroleum import only.
• Major ports are regulated by the central government (12 in number); minor/intermediate by state governments (~200) — easy to flip.
• Cochin lies near the Suez-Colombo route, not the Cape of Good Hope route; Mormugao gained significance for iron-ore exports to Japan, remodelled in 1961.
• The two ports lost at Partition are Karachi (Pakistan) and Chittagong (Bangladesh) — not "Karachi and Lahore" or "Chittagong and Dhaka."
• Kolkata Port serves land-locked Nepal and Bhutan — geographically counter-intuitive since Kolkata is far from those countries.
• POL is India's largest single import (Rs. 12,07,803 crore in 2021-22); gold/diamonds and edible oils come later — distractors often list edible oil first.
• The UDAN scheme operationalised 73 airports, 9 heliports and 2 water aerodromes — not 100 airports as some distractors suggest.

2.5 Key data table (NCERT figures only)