Page 291 - DECO502_INDIAN_ECONOMIC_POLICY_ENGLISH

Unit 22: Sectoral Performance III - Foreign Trade and Balance of Payments

Table 1 : Expansion of India’s Foreign Trade after 1869 Notes
(Rupees in crore)
Period Exports (annual average) Imports (annual average)

1864–65 to 1868–69 55.86 31.70
1894–95 to 1898–99 107.53 73.67
1924–25 to 1928–29 353.51 251.02
Source : Dhires Bhattacharya, A Concise History of the Indian Economy 1750-1950 (1979), Prentice-Hall
of India, New Delhi.
During the British regime, the international trade policy of India had a clear and perceptible orientation.
This was to promote exports of raw materials from mining and agronomy to the mills and
manufactories in Great Britain, and the import of their finished products like cotton textiles (nearly
half of total exports) and engineering goods in to the vast Indian colony. To this end, the Government
of both the UK and India continually adjusted all economic machineries like export and import tariffs,
customs and excise duties and protection and liberalization.

Post Independence Thrusts
A profile of our international trade is indicated in Table 2
Table 2 : Foreign Trade : Balance of Trade
(`` `` ` in crore)
Year Exports Imports Total value of trade Balance of trade

1950–1951 606 608 1,214 –2
1960–1961 642 1,122 1,764 –480
1970–1971 1,535 1,634 3,169 –9
1980–1981 6,711 12,549 19,260 –838
1990–1991 32,553 43,198 75,751 –10,645
1997–1998 1,30,100 1,54,176 2,84,276 –24,076
1998–1999 1,39,752 1,78,332 3,18,084 –38,580
1999–2000 1,59,561 2,15,236 3,74,797 –55,675
2000–2001 2,03,571 2,30,873 4,34,444 –27,302
2001–2002 2,09,018 2,45,200 4,54,218 –36,182
2002–2003 2,55,137 2,97,206 5,52,343 –42,067
2003–2004 2,93,367 3,59,108 6,52,475 –65,741
Source : Economic Survey 2004–05.
Table 2 shows interesting ups and downs in total value of trade. While it had shot up in 1990–91, we have
not looked back—the figures rising from ` 75,751 crore in 1990–91 to ` 652,475 crore in 2003–04. While this
looks okay on a graph, in actual fact the figure should have quadrupled by now if we had taken care of the
contents of our export basket and if the growth of the GDP would have been around 10%.
It will be interesting to enumerate some of the broad features of the growth curve in our international
trade:
Imports

This shows a galloping rise during the last four decades, as indicated in Table 22.3. The rise has not
only been galloping from year to year and from decade to decade, there has also been wide and

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