Chapter – 8

International Trade

In this post we have given the detailed notes of class 12 Geography Book 2 Chapter 8 (International Trade) in English. These notes are useful for the students who are going to appear in class 12 board exams.

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Chapter 8: International Trade

Introduction

• International trade is the exchange of goods and services between countries.  
• No country is self-sufficient, so international trade is mutually beneficial.  
• India’s international trade has undergone significant changes in volume, composition, and direction in recent years.  
• India’s contribution to world trade is relatively small (around 1%), but it plays a vital role in the global economy.  

Changing Pattern of India’s International Trade

• In 1950-51, India’s international trade was valued at Rs. 1,214 crore.  
• By 2020-21, this value had increased to Rs. 77,19,796 crore, representing a massive growth rate.  
• This growth can be attributed to factors like the expansion of the manufacturing sector, liberal government policies, and market diversification.  
• The value of imports has generally been higher than exports, resulting in a trade deficit.  

Changing Composition of India’s Exports

• The composition of India’s exports has been changing over the years.  
• The share of agriculture and allied products has decreased.  
• Traditional agricultural exports like cashew have declined, while exports of floricultural products, fresh fruits, marine products, and sugar have increased.  
• The share of manufactured goods has also decreased.  
• The share of crude petroleum and petroleum products has increased.  
• The share of ores and minerals has remained largely constant.  
• The decline in traditional exports is due to increased international competition.  
• The manufacturing sector accounted for 67.8% of India’s total export value in 2021-22.  
• Engineering goods have shown significant export growth, but India faces competition from China and other East Asian countries.  
• Gems and jewellery continue to be a major contributor to India’s exports.  

Changing Composition of India’s Imports

• In the 1950s and 1960s, India faced food shortages, and foodgrain was a major import item, along with capital goods, machinery, and equipment.  
• The balance of payments was unfavourable due to higher imports than exports.  
• After the 1970s, foodgrain imports decreased due to the Green Revolution, but the energy crisis of 1973 led to increased imports of petroleum and fertilizers.  
• The import basket now includes petroleum products, fertilizers, edible oils, chemicals, machinery, and equipment.  
• The rise in petroleum product imports reflects its use as both fuel and industrial raw material, indicating industrialization and a better standard of living.  
• India imports edible oil despite being agriculturally rich due to factors like domestic demand, international market prices, and specific oil requirements.  

Direction of Trade

• India has trade relations with most countries and major trading blocs.  
• The majority of India’s trade is with Asia and ASEAN countries.  
• Other important trading partners include Europe, Africa, North America, and Latin America.  
• India aims to double its share in international trade in the coming years.  
• Measures like import liberalization, reduction in import duties, and changes in patent regulations are being adopted to achieve this goal.  

Sea Ports as Gateways of International Trade

• India has a long coastline and a long tradition of seafaring.  
• The west coast of India has more ports than the east coast.  
• The importance of ports for international trade increased with the arrival of European traders and British colonization.  
• India has 12 major ports and 200 minor or intermediate ports.  
• Major ports are under the regulation of the central government, while minor ports are regulated by state governments.  
• The British used ports to extract resources from the hinterlands.  
• The expansion of railways connected local, regional, and national markets to international markets through ports.  
• After independence, India lost two major ports (Karachi and Chittagong) due to partition.  
• New ports like Kandla and Diamond Harbour were developed to compensate for these losses.  
• Indian ports have continued to grow and modernize after independence.  
• Private entrepreneurs are now involved in the modernization of ports.  
• The capacity of Indian ports has increased significantly since 1951.  

Major Ports and Their Hinterlands

• Deendayal Port (Kandla): Caters to western and northwestern India, handles petroleum, petroleum products, and fertilizers.  
• Mumbai Port: Natural harbor and India’s biggest port, handles a large share of overseas trade.  
• Jawaharlal Nehru Port (Nhava Sheva): Satellite port to relieve pressure on Mumbai port, India’s largest container port.  
• Marmagao Port: Natural harbor in Goa, important for iron-ore exports.  
• New Mangalore Port: Handles iron-ore, iron-concentrates, fertilizers, petroleum products, and other cargo.  
• Kochchi Port: Natural harbor, strategically located near the Suez-Colombo route.  
• Kolkata Port: Located on the Hugli river, has lost some significance due to competition from other ports and silt accumulation.  
• Haldia Port: Satellite port to reduce congestion at Kolkata port, handles bulk cargo.  
• Paradwip Port: Deepest harbor in India, handles large-scale export of iron-ore.  
• Visakhapatnam Port: Land-locked harbor, handles iron-ore, petroleum, and general cargo.  
• Chennai Port: One of the oldest ports on the east coast, an artificial harbor.  
• Ennore Port: Newly developed port in Tamil Nadu to relieve pressure on Chennai port.  
• Tuticorin Port: Handles a variety of cargo, including coal, salt, food grains, edible oils, and petroleum products.  

Airports

• Air transport is important for high-value and perishable goods, but it is costly and less suitable for heavy or bulky cargo.  
• India has several major airports, including Delhi, Mumbai, Chennai, Kolkata, Bengaluru, Hyderabad, and others.  
• The UDAN scheme has been operationalizing unserved and underserved airports, including heliports and water aerodromes.  

Additional Topics and Details

• Balance of Trade: The balance of trade is the difference between the value of a country’s exports and imports of goods and services. A trade deficit occurs when imports exceed exports, while a trade surplus occurs when exports exceed imports.  
• Free Trade vs. Protectionism: Free trade refers to the unrestricted exchange of goods and services between countries, while protectionism involves measures like tariffs and quotas to protect domestic industries from foreign competition.
• World Trade Organization (WTO): The WTO is an intergovernmental organization that regulates international trade and encourages the reduction of trade barriers.
• Foreign Exchange Reserves: Foreign exchange reserves are assets held by a country’s central bank in foreign currencies, used to support the country’s currency and balance of payments.
• Impact of Globalization: Globalization has led to increased interconnectedness and interdependence of economies, impacting international trade patterns and policies.
• Role of Technology: Technological advancements have facilitated international trade by reducing transportation costs, improving communication, and enabling e-commerce.
• Environmental Concerns: International trade can have environmental impacts, such as pollution from transportation and the exploitation of natural resources.
• Sustainable Trade: Sustainable trade aims to balance economic growth with social and environmental considerations, promoting fair labour practices and environmental protection.

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