Trade in Brazil and India

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Trade in Brazil and India 

Contribution of trade in GDP

Export, Import and Balance of Trade (Value in US $)
  India Brazil 
Year Exports Imports  Exports Imports
2009-10 178751.4 288372.9 152994.7  127647.3
2010-11 251136 369770  197356.4 180458.8
2011-12 304623.53  489181.3  256038.7 226243.4
2012-13 214099.8 361271.9 242579.8 223149.1
  • Brazil mostly imports machinery, chemicals, fertilizers, wheat, heavy vehicles, mineral oil, and lubricants while exports iron ore, coffee, cocoa, cotton, sugar, tobacco, oranges, and bananas. Germany, the United States, Canada, Italy, Argentina, Saudi Arabia, and India are important trading partners. About 25% of GDP is derived from trade.
  • India mostly imports petroleum, machinery, pearls and other precious stones, gold and silver, paper, medicines, and textiles while largely exports tea, mangoes, coffee, spices, leather and leather goods, cotton, and silk. India's top trading partners include the United Kingdom, United States, Germany, Japan, China, and Russia and others. 
  • Indian firms established industrial centres throughout Brazil and invested heavily. Indian firms have made investments in IT, pharmaceuticals, energy, agribusiness, mining, engineering, and automobiles.
  • Brazil's presence in India is small but significant. Brazilian firms have invested in India's automobile, information technology, mining, energy, biofuels, and footwear sectors.

 

Text

Do you know? 

Brazil has been the largest producer of coffee for the last 150 years. The plant, belongs originally to Ethiopia. It was first brought to Brazil by some French settlers who established in the state of Pará in the early 18th century. Coffee farms are called fazendas. 

Text

Do you know?

Taxes are an important part of the economy and trade of any country. India has now switched to the GST (Goods and Service Tax) which aims towards one tax all over the country on various commodities and services. Brazil too has adopted the system from 1984. Like India, in Brazil too GST has various slabs.

Example

Read the adjoining table and answer the following questions.

Export, Import and Balance of Trade (Value in US $)
  India Brazil 
Year Exports Imports  Exports Imports
2009-10 178751.4 288372.9 152994.7  127647.3
2010-11 251136 369770  197356.4 180458.8
2011-12 304623.53  489181.3  256038.7 226243.4
2012-13 214099.8 361271.9 242579.8 223149.1

a) What is balance of trade?
b) Tell the types of balance of trades.
c)  In which country export exceeds import in all the years?
d) Brazil’s balance of trade belong to which type?
e) India‘s balance of trade belong to which type?

a. The balance of trade is the difference between export and import between a given period of time. It is an important component of the Balance of Payment. It measures the economic strength of the country's economy

The balance of Trade = Export-Import

b. The balance of trade is the difference between export and import between a given period of time. The balance of trade can be of three types:

  • Favourable balance/Surplus: It is the situation where exports are greater than imports. It is always good for a country to maintain a favourable BOT.
  • Unfavourable balance/Deficit: It is the situation where imports are greater than exports. For every developing country, the BOT would be largely unfavourable with imports greater than exports.
  • Equilibrium balance: It is the situation where imports are equal to exports. It is very difficult for any country to maintain equilibrium in BOT.

c. Exports exceed imports in all the years in Brazil. Brazil is always maintaining a favourable BOT where exports are greater than imports. It is always good for a country to maintain a favourable BOT.

d. Brazil’s BOT belongs to the favourable balance/surplus BOT category. It is the situation where exports are greater than imports. It is always good for a country to maintain a favourable BOT.

e. India’s BOT belongs to the unfavourable balance/deficit category. It is the situation where imports are greater than exports. For every developing country, the BOT would be largely unfavourable with imports greater than exports.

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