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Foreign Trade of India

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Estimated time: 19 minutes
CBSE: Class 12
Maharashtra State Board: Class 12

Meaning

  • Trade between different countries of the world is called foreign trade
  • Also known as international trade or external trade
Maharashtra State Board: Class 12
CISCE: Class 12

Definition: Foreign Trade

According to Wasserman and Hultman, “International Trade consists of transaction between residents of different countries.”

CBSE: Class 12

India's Foreign Trade Under British Rule

  • British colonial policies shaped the structure of India's foreign trade.
  • India was used as a supplier of raw materials and a market for finished goods.

Exports (from India):

  • Raw silk, cotton, wool, sugar, indigo, jute (primary/raw products)

Imports (into India):

  • Finished consumer goods and capital goods (from Britain)

Outcome:

  • India had an export surplus (exported more than it imported in value of primary goods).
  • But this led to domestic scarcity of essential raw materials.
  • Resulted in a drain of wealth from India to Britain.
CBSE: Class 12

The Suez Canal — Role in Trade

  • The Suez Canal is a strategic waterway.
  • It reduced transport costs between Britain and India.
  • Increased British access to the Indian market.
CBSE: Class 12

Activity 1: List of Major Exports and Imports During British Rule

Exports from India Imports into India
Raw cotton Cotton textiles (machine-made cloth)
Raw jute Iron and steel products
Silk Machinery
Indigo Railway equipment
Tea Capital goods
Coffee Consumer goods
Sugar Chemicals
Rice Manufactured goods
Wheat Luxury goods
Opium Paper products
CBSE: Class 12

Activity 2: Comparison of Pre-Independence and Present-Day Foreign Trade

Aspect Pre-Independence (British Rule) Present-Day India
Major Exports Raw cotton, jute, tea, coffee, indigo, silk, rice, wheat Petroleum products, engineering goods, pharmaceuticals, gems & jewellery, textiles, chemicals, software services, automobiles
Major Imports Machine-made textiles, machinery, iron & steel, capital goods, consumer goods Crude oil, gold, electronics, machinery, chemicals, coal, fertilizers, electronic components
Purpose of Trade To serve British economic interests To promote India's economic growth and development
Trading Partners Mainly Great Britain, China, Persia (Iran), Ceylon (Sri Lanka) USA, China, UAE, Singapore, Saudi Arabia, Netherlands, Germany, Bangladesh and many other countries
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Major Ports Handling India's Foreign Trade Today

  • Mumbai Port (Maharashtra)
  • Jawaharlal Nehru Port (Nhava Sheva), Maharashtra
  • Mundra Port (Gujarat)
  • Kandla (Deendayal) Port, Gujarat
  • Chennai Port (Tamil Nadu)
  • Visakhapatnam Port (Andhra Pradesh)
  • Paradip Port (Odisha)
  • Kochi Port (Kerala)
  • Kolkata-Haldia Port (West Bengal)
  • Mormugao Port (Goa)

These ports handle a major share of India's exports and imports today.

CBSE: Class 12

Key Points: Foreign Trade of India

  • Foreign trade = trade between residents of different countries; also called international or external trade.
  • India's foreign trade under colonial rule was shaped by British economic interests.
  • India exported primary products (jute, cotton, silk, indigo) and imported finished goods.
  • Despite an export surplus, India faced domestic scarcity and a net drain of wealth.
  • The Suez Canal played a key role by reducing transport costs and increasing British market access to India.
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