Question
Describe the major changes that have occurred in the commodity composition of India's imports during the period between 1960–2001 with examples.
Solution
India's foreign trade has undergone a great change during last 40 years. These are described below:
Positive change:
1. Petroleum and Petroleum Products:
In 1960-61 petroleum and its products accounted for 6.2% of total imports. This percentage rose to 28.7% in 2002-03. Reasons was price rise in petroleum and its products.
2. Chemicals and fertilizers : The import of chemicals also rose from 3.5% in 1961 to 6.9% in 2003. The import was necessary for increasing industrial output.
Negative change :
(i) Capital goods : Import of machineries, electrical machines, tools and equipments have come down in quantitative terms.
(ii) Food and allied products : The share in the import of these products has come down from 19.1% in 1960-61 to 4.6% in 2002-03.
(iii) Clothes and iron and steel : India is no longer imports clothes instead has become a net exporter on a large scale. The same is the story with iron and steel.
(iv) Raw material : Import of minerals, crude rubber, wood timber, ferrous minerals have also come down. The main reason for this reduction is the increase in the domestic production of these minerals.
