Class 12 Geography Notes Chapter 11 (International trade) – India - People and Economy Book

Detailed Notes with MCQs of Chapter 11, 'International Trade', from your 'India - People and Economy' textbook. This is a crucial chapter, not just for your board exams but also for understanding India's position in the global economy, which is frequently tested in government exams.

We'll break down India's international trade patterns, its historical evolution, the major commodities involved, and the infrastructure that supports it, particularly the ports.

Chapter 11: International Trade - Detailed Notes for Exam Preparation

1. Introduction: What is International Trade?

• International trade refers to the exchange of goods and services between countries.
• It's vital for a country's economy as no nation is entirely self-sufficient in all resources or goods.
• Significance for India:
  • Earns foreign exchange (needed to pay for imports).
  • Allows specialization and efficient resource utilization.
  • Provides access to goods and technologies not available domestically.
  • Stimulates economic growth and creates employment.
  • Acts as an engine of growth, especially post-liberalization.

2. Historical Perspective of India's Trade:

• Ancient/Medieval: India had extensive trade links (spices, textiles, gems) with Mesopotamia, Rome, Southeast Asia, China, etc., primarily via sea and land routes (like the Silk Road).
• Colonial Era (British Rule): India became a supplier of raw materials (cotton, jute, indigo, tea, ores) to Britain and a market for British manufactured goods. Trade was heavily skewed in Britain's favour, leading to the drain of wealth. The Suez Canal's opening (1869) intensified this trade pattern.
• Post-Independence (Initial Phase): Focus on import substitution to build domestic industries. Strict regulations, high tariffs, and quantitative restrictions on imports. Trade volume was relatively low.
• Post-Liberalization (1991 onwards): Economic reforms led to trade liberalization (reduced tariffs, simplified procedures). This resulted in a significant increase in the volume, value, and diversification of India's foreign trade.

3. Changing Pattern of India's Foreign Trade:

• A. Volume of Trade:
  • India's total foreign trade (exports + imports) has increased manifold, especially after 1991.
  • While the value has increased significantly, India's share in world trade remains relatively small (around 2%), though it is growing.
• B. Composition of Trade (What India Trades):
  • Shift in Exports:
    • Past: Dominated by primary products (agricultural goods like tea, coffee, spices; ores and minerals).
    • Present: Significant shift towards manufactured goods. Key exports include:
      • Engineering goods (machinery, transport equipment)
      • Gems and Jewellery
      • Petroleum products (refined)
      • Chemicals and related products
      • Textiles and ready-made garments
      • Pharmaceuticals
      • Software services (though services aren't goods, they are a major part of India's international economic transactions).
    • Agriculture's share in exports has declined relatively, though items like rice, marine products, and sugar remain important.
  • Shift in Imports:
    • Past (Post-Independence): Food grains (due to shortages), capital goods, machinery.
    • Present: Dominated by:
      • Petroleum, Oil, and Lubricants (POL): Consistently the largest import item due to domestic production constraints and high energy demand. Makes India vulnerable to global oil price fluctuations.
      • Capital goods (machinery, transport equipment needed for industrial and infrastructure development).
      • Electronic goods.
      • Pearls, precious and semi-precious stones (often processed and re-exported as gems and jewellery).
      • Chemicals.
      • Coal, coke, and briquettes.
      • Iron and Steel.
• C. Direction of Trade (Who India Trades With):
  • Shift in Partners:
    • Past: UK and other Commonwealth countries were major partners.
    • Present: Trade has diversified significantly. Major trading partners include:
      • Asia and ASEAN: Regionally, this is the largest trading bloc for India (includes China, UAE, Singapore, etc.). China is often the largest single country partner, especially for imports.
      • Europe: EU countries (Germany, Belgium, UK, France, Netherlands).
      • North America: USA (a major export destination and import source).
  • Increased engagement with regional trade blocs like ASEAN, SAARC, and bilateral trade agreements.

4. Balance of Trade (BoT):

• BoT = Value of Exports - Value of Imports (for merchandise/goods).
• Favourable BoT (Trade Surplus): Exports > Imports.
• Unfavourable BoT (Trade Deficit): Imports > Exports.
• India's BoT: India has generally experienced a negative or unfavourable Balance of Trade since independence, primarily due to the high value of imports, especially POL. The trade deficit widened significantly after the oil price shocks of the 1970s and continues to be a concern.

5. Sea Ports: Gateways of International Trade:

• Ports handle the bulk (around 95% by volume) of India's foreign trade.
• India has a long coastline (approx. 7517 km) with 12 major ports and numerous minor ports. Major ports are under central government jurisdiction, minor ports under state governments.
• Major Ports on the West Coast (North to South):
  • Kandla (Deendayal Port), Gujarat: Tidal port. Developed after partition to compensate for the loss of Karachi port. Handles POL, food grains, salt, textiles, edible oils. Serves landlocked northern and western states. Now has a large SEZ.
  • Mumbai, Maharashtra: Largest natural harbour. Busiest port. Handles general cargo, POL, dry cargo. Highly congested. Serves a vast hinterland covering Maharashtra, MP, Gujarat, Rajasthan, Delhi.
  • Jawaharlal Nehru Port Trust (JNPT), Nhava Sheva, Maharashtra: Developed to relieve pressure on Mumbai port. India's largest container port. Technologically advanced.
  • Marmagao, Goa: Natural harbour. Major iron ore exporting port (from Goa and Karnataka mines). Also handles coal, fertilizers, POL.
  • New Mangalore, Karnataka: Handles iron ore (Kudremukh mines), POL, fertilizers, edible oils, granite.
  • Kochchi (Kochi), Kerala: Natural harbour located near Vembanad Kayal (lagoon). "Queen of the Arabian Sea". Handles spices, tea, coffee, POL, fertilizers. Has India's largest container transhipment terminal (Vallarpadam).
• Major Ports on the East Coast (South to North):
  • Tuticorin (V.O. Chidambaranar Port), Tamil Nadu: Artificial deep-sea harbour. Handles coal, salt, edible oils, petroleum products, fertilizers. Trades mainly with Sri Lanka.
  • Chennai, Tamil Nadu: Oldest artificial harbour on the East Coast. Ranks second in cargo volume after Mumbai (often competes closely with JNPT/Kandla). Handles POL, fertilizers, iron ore, general cargo, containers. Faces congestion.
  • Ennore (Kamarajar Port), Tamil Nadu: Developed north of Chennai to relieve its congestion. India's first corporatized major port. Handles coal (mainly for Tamil Nadu power plants), POL, chemicals.
  • Vishakhapatnam, Andhra Pradesh: Deepest landlocked and well-protected port. Handles iron ore (exports to Japan), coal, POL, general cargo. Has shipbuilding and repair facilities.
  • Paradip, Odisha: Deep-water, artificial harbour. Primarily handles iron ore (from Odisha/Jharkhand mines), coal, crude oil.
  • Haldia & Kolkata, West Bengal: Kolkata is a riverine port on the Hooghly River, located far inland (128 km from the sea). Faces problems of siltation, requires constant dredging. Haldia was developed downstream to relieve pressure on Kolkata and handle bulk cargo like POL, coal, fertilizers, containers which larger ships cannot take up to Kolkata. Serves a vast hinterland including West Bengal, Bihar, Jharkhand, UP, Uttarakhand, and North-Eastern states.

6. Airports in International Trade:

• Air transport plays a crucial role in handling high-value, low-bulk, or perishable goods (e.g., gems, electronics, pharmaceuticals, flowers).
• It is faster but more expensive than sea transport.
• Major International Airports handling significant cargo: Delhi (IGI), Mumbai (CSMIA), Chennai, Kolkata (NSCBI), Bengaluru (Kempegowda), Hyderabad (Rajiv Gandhi).

7. Conclusion:

• International trade is indispensable for India's economic development.
• The country has witnessed significant changes in the volume, composition, and direction of its trade, especially post-liberalization.
• Managing the trade deficit (especially due to oil imports) and improving port and logistics infrastructure remain key challenges and priorities.

Multiple Choice Questions (MCQs):

1. Which of the following commodities has consistently been the largest item in India's import basket in recent decades?
   (A) Food Grains
   (B) Machinery
   (C) Petroleum, Oil, and Lubricants (POL)
   (D) Gold and Silver

2. The port developed as a satellite port to relieve pressure on Mumbai Port and which is now India's largest container port is:
   (A) Kandla Port
   (B) Jawaharlal Nehru Port (Nhava Sheva)
   (C) Marmagao Port
   (D) New Mangalore Port

3. Which major port on the East Coast is known for being India's deepest landlocked and well-protected port?
   (A) Chennai
   (B) Tuticorin
   (C) Paradip
   (D) Vishakhapatnam

4. India's foreign trade significantly increased in volume, value, and diversification primarily after:
   (A) Independence in 1947
   (B) The Green Revolution in the 1960s
   (C) The opening of the Suez Canal in 1869
   (D) The economic liberalization policies of 1991

5. Which of the following best describes the general trend of India's Balance of Trade (BoT) for merchandise goods since independence?
   (A) Consistent Trade Surplus
   (B) Generally Balanced Trade
   (C) Consistent Trade Deficit
   (D) Highly Fluctuating between Surplus and Deficit

6. Kolkata Port is unique among India's major ports because it is a:
   (A) Tidal Port
   (B) Natural Harbour
   (C) Riverine Port
   (D) Corporatized Port

7. The direction of India's foreign trade has shifted significantly. Which region/bloc currently accounts for the largest share of India's total trade?
   (A) North America (USA, Canada)
   (B) Europe (EU)
   (C) Asia and ASEAN
   (D) Africa

8. Which major port was developed primarily to handle the export of iron ore from the Kudremukh mines?
   (A) Kochchi
   (B) New Mangalore
   (C) Marmagao
   (D) Kandla

9. The composition of India's exports has changed over time, with a relative decline in the share of agricultural products and an increase in the share of:
   (A) Ores and Minerals
   (B) Plantation Crops only
   (C) Manufactured Goods (like engineering goods, gems, chemicals)
   (D) Handicrafts

10. Which port on the West Coast is known as a tidal port and was developed after partition to compensate for the loss of Karachi port?
    (A) Mumbai
    (B) Kandla (Deendayal Port)
    (C) Marmagao
    (D) Kochchi

Answer Key:

1. (C)
2. (B)
3. (D)
4. (D)
5. (C)
6. (C)
7. (C)
8. (B)
9. (C)
10. (B)

Make sure you revise these points thoroughly. Pay special attention to the changing composition and direction of trade, the reasons for the trade deficit, and the specific characteristics and locations of the major sea ports. Good luck with your preparation!