NCERT Solutions for Class 12 Geography India: People and Economy Chapter 8: International Trade

Chapter at a glance

Exercise Questions

Question 1 (i)

Trade between two countries is termed as
(a) Internal trade (b) External trade (c) International trade (d) Local trade

Answer

Trade between two or more countries (across national boundaries) is termed international trade.

3. International trade

Question 1 (ii)

Which one of the following is a land locked harbour?
(a) Vishakhapatnam (b) Mumbai (c) Kamarajar (Ennore) (d) Haldia

Answer

Visakhapatnam is a land-locked harbour, connected to the sea by a channel cut through solid rock and sand; it is the deepest land-locked and well-protected port on the east coast.

1. Vishakhapatnam

Question 1 (iii)

Most of India’s foreign trade is carried through
(a) Land and sea (b) Land and air (c) Sea and air (d) Sea

Answer

The textbook states that most of India’s foreign trade is carried through sea and air routes (by far the largest share by volume by sea); only a small portion goes by land to neighbouring countries like Nepal, Bhutan, Bangladesh and Pakistan.

3. Sea and air

Question 2 (i)

Mention the characteristics of India’s foreign trade.

Answer

1. The volume and value of India’s foreign trade have increased enormously since independence, especially after liberalisation (1991).
2. India’s share in world trade is small (about 2%).
3. Imports exceed exports – India has a negative (unfavourable) balance of trade, mainly due to large imports of crude petroleum, gold and electronics.
4. Composition has changed – exports have shifted from agricultural and allied products and raw materials to manufactured goods (engineering goods, chemicals, pharmaceuticals, gems and jewellery, petroleum products) and services (IT).
5. Direction has diversified – trade with Asian countries (China, UAE, Saudi Arabia, Singapore), the USA and EU.
6. Most trade is carried by sea through major ports.

India’s foreign trade has grown greatly in volume and value, especially after 1991, though its world share is small (~2%); imports exceed exports (negative balance) due to crude oil, gold and electronics; exports have shifted from agricultural goods to manufactures and services; trade partners have diversified (USA, China, UAE, EU); and most trade goes by sea.

Question 2 (ii)

Distinguish between port and harbour.

Answer

A port usually has a harbour, but every harbour may not be a port.

A harbour is a natural or artificial sheltered body of water where ships can anchor safely, while a port is a place on the coast with facilities for loading and unloading cargo and passengers and links to the hinterland; a port usually includes a harbour, but not every harbour is a port.

Question 2 (iii)

Explain the meaning of hinterland.

Answer

Hinterland is the area (land) served by a port — the region from which a port receives goods for export and to which it distributes imported goods. It is connected to the port by roads, railways and waterways. E.g. the hinterland of Kolkata–Haldia port covers the Ganga–Brahmaputra basin, including West Bengal, Bihar, Jharkhand, eastern UP and the north-east; the hinterland of a port determines its importance.

Hinterland is the area served by a port — the land region from which it collects exports and to which it distributes imports, linked by transport; e.g. the Kolkata–Haldia port serves the Ganga–Brahmaputra basin and the north-east.

Question 2 (iv)

Name important items which India imports from different countries.

Answer

Petroleum, crude oil and products (Iraq, Saudi Arabia, UAE, Russia, USA), gold, pearls, precious and semi-precious stones (Switzerland, UAE, South Africa), electronic goods and telecom equipment (China, South Korea, Taiwan), machinery and transport equipment (China, Germany, Japan, USA), chemicals and fertilisers (China, Russia, Saudi Arabia, Morocco), edible oils (Indonesia, Malaysia, Argentina, Ukraine), coal (Australia, Indonesia), pulses, iron and steel, non-ferrous metals.

India imports crude petroleum and products (from West Asia, Russia), gold and precious stones (Switzerland, UAE), electronic goods (China, South Korea), machinery (China, Germany, Japan, USA), chemicals and fertilisers, edible oils (Indonesia, Malaysia), coal (Australia, Indonesia), pulses, iron and steel and non-ferrous metals.

Question 2 (v)

Name the ports of India located on the east coast.

Answer

Major ports on the east coast (north to south): Kolkata (Syama Prasad Mookerjee port) – Haldia, Paradip (Odisha), Visakhapatnam (Andhra Pradesh), Chennai, Kamarajar (Ennore) and V.O. Chidambaranar (Tuticorin) (Tamil Nadu). (Minor ports include Kakinada, Machilipatnam, Gopalpur, Puducherry, Karaikal.)

East-coast ports: Kolkata–Haldia, Paradip, Visakhapatnam, Chennai, Kamarajar (Ennore) and V.O. Chidambaranar (Tuticorin).

Question 3 (i)

Describe the composition of export and import trade of India.

Answer

Composition of exports: 1. Changing pattern – the share of agriculture and allied products (tea, coffee, spices, cotton, cashew, marine products) has declined, while the share of manufactured goods, petroleum products and crude has increased. 2. Major export items (recent): engineering goods (machinery, automobiles and parts, iron and steel) — the largest category; petroleum products (refined fuels — from Jamnagar etc.); gems and jewellery; chemicals and pharmaceuticals (generic medicines); textiles and readymade garments; electronic goods (mobile phones); agricultural products (rice, spices, marine products); ores and minerals. 3. Services – IT and software services, business services and tourism are major foreign exchange earners. 4. The decline in traditional items is due to increasing international competition.

Composition of imports: 1. In the 1950s–60s, India imported foodgrains, capital goods, machinery and equipment. After the Green Revolution, foodgrain imports declined. 2. Fertilisers and petroleum replaced foodgrains as major imports after the 1970s; machinery and equipment, special steel, edible oil and chemicals constitute the import basket. 3. Major import items (recent): petroleum, crude and products (the largest share — about a quarter or more of imports), pearls, precious and semi-precious stones and gold, electronic goods, machinery, chemicals, fertilisers, edible oils, coal and coke, non-ferrous metals. 4. Rising imports of capital goods reflect industrial development; rising crude imports reflect growing energy needs; gold imports reflect cultural demand.

Balance of trade – imports exceed exports, giving a negative balance of trade; the gap is partly met by services exports and remittances.

India’s exports have shifted from agricultural and allied products (tea, coffee, spices, cotton) to engineering goods, petroleum products, gems and jewellery, chemicals and pharmaceuticals, textiles and electronics, plus large services (IT) exports. Imports, once dominated by foodgrains and machinery, are now led by crude petroleum, gold and precious stones, electronic goods, machinery, chemicals, fertilisers, edible oils and coal; imports exceed exports, giving a negative trade balance.

Question 3 (ii)

Write a note on the changing nature of the international trade of India.

Answer

1. Growth in volume and value – India’s international trade has increased tremendously since independence. Total trade (exports + imports) grew from a few hundred crore rupees in 1950–51 to tens of lakh crore rupees today; the reasons include the momentum in manufacturing sectors, liberal policies of the government and diversification of markets.
2. Liberalisation (1991) – opening up of the economy, reduction of tariffs, membership of the WTO, and encouragement to exports led to rapid growth of trade.
3. Changing composition of exports – the share of agricultural and allied products and ores has declined, while manufactured goods (engineering goods, chemicals, pharmaceuticals), petroleum products and gems and jewellery have increased. There has been a large rise in services exports (IT, software) — India is a global software hub.
4. Changing composition of imports – from foodgrains and machinery to petroleum, gold, electronics, fertilisers, capital goods.
5. Changing direction – earlier trade was mainly with the UK and Western countries; now India trades with almost all countries; Asia (China, UAE, Saudi Arabia, Singapore, Hong Kong) has become the main trading region; the USA is a major export destination; China is the largest source of imports; trade with ASEAN, Africa and Latin America is increasing.
6. Trade deficit – imports have grown faster than exports, leading to a persistent trade deficit, due to rising crude oil prices and demand for electronics and gold.
7. Regional trade agreements – SAFTA, ASEAN–India FTA, agreements with UAE, Australia; push for “Make in India” and export promotion.
8. Ports and logistics – modernisation of ports (Sagarmala), containerisation, more air cargo.

India’s international trade has grown enormously in volume and value, especially after liberalisation and WTO membership. Exports have shifted from agricultural goods and ores to manufactures, petroleum products, gems and jewellery and IT services; imports from foodgrains to crude oil, gold, electronics and capital goods. Direction has shifted from the UK and the West to Asia (China, UAE, Singapore) and the USA; a persistent trade deficit exists; and trade agreements and port modernisation support growth.

Topic checklist

• ☒ Meaning and characteristics of India’s trade (Q 1 (i), 1 (iii), 2 (i))
• ☒ Composition and direction (Q 2 (iv), 3 (i), 3 (ii))
• ☒ Ports, harbours and hinterland (Q 1 (ii), 2 (ii), 2 (iii), 2 (v))

Total questions answered: 10 of 10