(A) Change in import structure:
- After 1991, the nature of trade changed significantly in India. The import of food grains and other agricultural goods and capital goods declined.
- The share of traditional exports like tea, coffee, jute etc. in total exports declined while that of industrial goods and non-traditional items increased. For example, India started exporting software.
- In 1961, the share of food imports in India’s total merchandise imports was 19.1% which declined to just 3.9% in 2014-15. This shows that India attained self-reliance in producing grains and other food items.
- As India developed, it started generating more more capital and capital intensive goods. So, India’s import of such items decreased significantly. In 1960-61, the share of capital intensive goods in India’s merchandise imports was as high as 31.7% which declined to 9.8% in 2014-15.
- In 1960-61, the import of new items was only 2.2% of the total merchandise. This increased to 46.5% in 2014-15. This shows that as India developed in a variety of sectors it needed more and more new types of items and so India’s imports of new types of items increased.
(B) Change in export structure:
- As India developed, the nature of export also changed.
- In 1960-61, the primary sector export consisted of 44.2% of total export. It reduced to as low as 12.3% in 2014-15. In this, the share of tea and coffee exports declined from 19.3% to 0.2% and that of jute export declined from 21% to 0.2%.
- Similarly, the share of leather products in exports declined from 4.4% in 1960-61 to 1.3%in 2014-15 and that of cloth declined from 10% to 2%.
- Against this, the export of readymade garments increased from 0.1% in 1960-61 to 5.4% in 2014-15.
- The share of manufactured goods in total merchandise exports was 45.3% which increased to 66.7% in 2014-15.
- In 1960-61, India exported only 1.1% of petroleum products. This increased to 18.5% in 1914-15.
Conclusion:
There is a considerable change in the foreign trade pattern since independence. India has developed significantly in all these years and hence both the volume and pattern of import and export trade have also significantly changed.
