Online Self Test
Learn & Practice Quizzes & Challenges Competitive Exams
 

International Trade of India – CBSE NCERT Study Resources

Previous ChapterNext Chapter
Previous Chapter Next Chapter

Study Materials

12th

12th - Geography

International Trade of India

Jump to Question Sets

Overview of the Chapter: International Trade of India

This chapter explores the dynamics of India's international trade, covering its historical evolution, major commodities, trade partners, and the impact of globalization. It also discusses the role of trade policies, balance of payments, and emerging trends in India's trade relations.

International Trade: The exchange of goods and services between countries, influenced by factors like demand, supply, and trade policies.

Historical Background

India has a rich history of international trade dating back to ancient times, with trade routes like the Silk Road connecting it to other civilizations. During the colonial period, trade was heavily controlled by the British, leading to an export-oriented economy focused on raw materials.

Major Commodities in Trade

India's international trade includes both exports and imports. Key exports include petroleum products, gems and jewelry, pharmaceuticals, and textiles. Major imports comprise crude oil, gold, electronic goods, and machinery.

Trade Partners

India's primary trade partners include the USA, China, UAE, and European Union nations. Regional trade agreements like SAFTA and bilateral treaties influence trade relations.

Impact of Globalization

Globalization has significantly transformed India's trade patterns, increasing foreign investments and technological exchanges. However, it has also led to challenges like trade deficits and competition from foreign markets.

Trade Policies and Balance of Payments

The Indian government implements trade policies to regulate imports and promote exports. The balance of payments reflects the country's economic transactions with the world, including trade deficits or surpluses.

Emerging Trends

Recent trends include the growth of e-commerce in trade, diversification of export baskets, and India's increasing role in global supply chains. Initiatives like 'Make in India' aim to boost manufacturing and exports.

All Question Types with Solutions – CBSE Exam Pattern

Explore a complete set of CBSE-style questions with detailed solutions, categorized by marks and question types. Ideal for exam preparation, revision and practice.

Very Short Answer (1 Mark) – with Solutions (CBSE Pattern)

These are 1-mark questions requiring direct, concise answers. Ideal for quick recall and concept clarity.

Question 1:
Name India's top export partner in 2023.
Answer:

United States of America (USA).

Question 2:
Which Köppen symbol represents India's major trade regions?
Ex: Am
Answer:

Aw (Tropical Savanna).

Question 3:
List two major imports of India.
Answer:
  • Crude oil
  • Electronic goods
Question 4:
What is the role of GIS in trade analysis?
Answer:

Mapping trade routes and logistics.

Question 5:
Name the port handling maximum cargo in India.
Answer:

Jawaharlal Nehru Port (Mumbai).

Question 6:
Which agreement boosted India-ASEAN trade?
Answer:

India-ASEAN Free Trade Agreement (FTA).

Question 7:
Compare export growth (2010 vs 2020) in India.
Answer:
YearGrowth (%)
201020.3
202014.7
Question 8:
Identify the trade deficit issue in India.
Answer:

Imports exceed exports.

Question 9:
Name two SEZs promoting trade in India.
Answer:
  • Kandla SEZ
  • Santacruz SEZ
Question 10:
Which GIS tool tracks shipping routes?
Answer:

ArcGIS Maritime.

Question 11:
List two export commodities from agriculture.
Answer:
  • Rice
  • Spices
Question 12:
How does monsoon affect India's trade?
Answer:

Impacts agricultural exports.

Question 13:
Name the two major components of India's international trade.
Answer:

The two major components are:
1. Exports (goods and services sold to other countries)
2. Imports (goods and services bought from other countries)

Question 14:
What is the significance of the Suez Canal in India's trade?
Answer:

The Suez Canal reduces the distance between India and Europe by avoiding the longer route around Africa. It lowers transportation costs and time, making trade more efficient.

Question 15:
Which organization regulates India's foreign trade policy?
Answer:

The Directorate General of Foreign Trade (DGFT), under the Ministry of Commerce, regulates India's foreign trade policy.

Question 16:
List one major export item of India to the USA.
Answer:

Pharmaceuticals (medicines and drugs) are a major export item from India to the USA.

Question 17:
Name one major Indian port located on the west coast.
Answer:

Jawaharlal Nehru Port (Nhava Sheva) in Maharashtra is a major port on India's west coast.

Question 18:
How does international trade impact employment in India?
Answer:

International trade creates jobs in export-oriented industries like textiles, IT, and agriculture. It also boosts employment in logistics, shipping, and allied sectors.

Question 19:
What is a trade surplus?
Answer:

A trade surplus occurs when a country's exports exceed imports, leading to a positive balance of trade. It strengthens the economy.

Question 20:
Name one regional trade agreement India is part of.
Answer:

India is part of the South Asian Free Trade Area (SAFTA), promoting trade among South Asian countries.

Question 21:
Why is petroleum a major import item for India?
Answer:

India imports petroleum due to high domestic demand and limited reserves. It is essential for energy, transport, and industrial needs.

Question 22:
What is the impact of globalization on India's trade?
Answer:

Globalization has increased India's trade volume by:
1. Expanding markets for exports
2. Encouraging foreign investments
3. Enhancing technology transfer

Question 23:
Define international trade in the context of India.
Answer:

International trade refers to the exchange of goods and services between India and other countries. It includes exports (selling to other nations) and imports (buying from other nations).

Question 24:
Name the two major components of India's balance of trade.
Answer:

The two major components are:
1. Visible Trade (physical goods like machinery, textiles)
2. Invisible Trade (services like IT, tourism).

Question 25:
Which organization regulates India's foreign trade policies?
Answer:

The Directorate General of Foreign Trade (DGFT), under the Ministry of Commerce, regulates India's foreign trade policies.

Question 26:
List one major export and one major import item of India.
Answer:

Export: Petroleum products
Import: Crude oil

Question 27:
How does port infrastructure impact India's international trade?
Answer:

Efficient port infrastructure ensures faster cargo handling, reduces logistical delays, and enhances trade volume by connecting India to global markets.

Question 28:
What role does WTO play in India's trade?
Answer:

The WTO ensures fair trade practices, resolves disputes, and helps India access global markets under regulated agreements.

Question 29:
Name one free trade agreement signed by India.
Answer:

India has signed the India-ASEAN Free Trade Agreement (FTA) to promote trade with Southeast Asian nations.

Question 30:
Why is the Gulf region important for India's trade?
Answer:

The Gulf region is a major source of crude oil imports and a key market for India's textile, spices, and manpower exports.

Very Short Answer (2 Marks) – with Solutions (CBSE Pattern)

These 2-mark questions test key concepts in a brief format. Answers are expected to be accurate and slightly descriptive.

Question 1:
Name two major export items of India.
Answer:

Two major export items of India are petroleum products (refined crude oil) and gems and jewellery. These contribute significantly to India's foreign exchange earnings.

Question 2:
Explain the term balance of trade.
Answer:

Balance of trade is the difference between a country's exports and imports of goods. A surplus occurs when exports exceed imports, while a deficit happens when imports are higher.

Question 3:
Identify two major ports on India's western coast.
Answer:

Two major ports on India's western coast are Mumbai Port (largest in India) and Jawaharlal Nehru Port (handles container traffic). Both play a key role in trade.

Question 4:
How does WTO influence India's international trade?
Answer:

The WTO sets global trade rules, ensuring fair practices. India benefits from dispute resolution and market access but faces challenges in agriculture and subsidies.

Question 5:
What are SEZs? How do they promote trade?
Answer:

SEZs (Special Economic Zones) are designated areas with tax benefits and infrastructure to attract foreign investment. They boost exports by easing regulations and offering incentives.

Question 6:
Why is GST important for India's trade?
Answer:

GST (Goods and Services Tax) simplifies taxation, reducing interstate trade barriers. It lowers costs, improves logistics, and enhances competitiveness in global markets.

Question 7:
Name two trade agreements India is part of.
Answer:

India is part of SAFTA (South Asian Free Trade Area) and ASEAN-India Free Trade Agreement. These agreements reduce tariffs and promote regional trade.

Question 8:
How does remittance impact India's economy?
Answer:

Remittance (money sent by Indians abroad) boosts foreign exchange reserves and supports families. It contributes ~3% to India's GDP, aiding economic stability.

Question 9:
What role does IT sector play in India's exports?
Answer:

The IT sector is a top service exporter, providing software and BPO services globally. It earns ~$150 billion annually, strengthening India's trade position.

Short Answer (3 Marks) – with Solutions (CBSE Pattern)

These 3-mark questions require brief explanations and help assess understanding and application of concepts.

Question 1:
Explain the significance of international trade for India's economy.
Answer:

International trade plays a crucial role in India's economy by:

  • Boosting GDP growth through exports and imports.
  • Providing access to advanced technology and foreign capital.
  • Creating employment opportunities in sectors like manufacturing and services.
  • Enhancing foreign exchange reserves, stabilizing the economy.
  • Promoting global competitiveness by improving product quality.

For example, India's IT and pharmaceutical exports have strengthened its global trade position.

Question 2:
Describe the major export commodities of India and their contribution to trade.
Answer:

India's major export commodities include:

  • Petroleum products: Contribute significantly to export earnings due to refining capacity.
  • Gems and jewellery: A traditional export sector with high value addition.
  • Pharmaceuticals: India is a global leader in generic drug exports.
  • Textiles and garments: A labor-intensive sector supporting millions of jobs.
  • Automobiles and machinery: Reflect India's growing industrial base.

These commodities enhance India's trade balance and global market presence.

Question 3:
What are the challenges faced by India in international trade?
Answer:

India faces several challenges in international trade:

  • Trade deficits with certain countries due to higher imports than exports.
  • Non-tariff barriers like strict quality standards in developed nations.
  • Fluctuations in global commodity prices affecting export revenues.
  • Infrastructure bottlenecks like port delays and poor logistics.
  • Competition from low-cost manufacturing countries like China and Vietnam.

Addressing these challenges requires policy reforms and infrastructure development.

Question 4:
How does the Balance of Trade impact India's economy?
Answer:

The Balance of Trade (BoT) impacts India's economy in the following ways:

  • A trade surplus increases foreign exchange reserves, strengthening the rupee.
  • A trade deficit can lead to currency depreciation and higher import costs.
  • It influences inflation as costly imports raise domestic prices.
  • Affects employment sectors dependent on exports or imports.

For instance, India's trade deficit with China affects its economic stability.

Question 5:
Explain the role of WTO in regulating India's international trade.
Answer:

The World Trade Organization (WTO) regulates India's trade by:

  • Ensuring fair trade practices through rules and agreements.
  • Providing a platform to resolve trade disputes with other nations.
  • Promoting tariff reductions and non-discrimination in trade.
  • Supporting developing countries with special provisions like longer compliance periods.

For example, WTO's dispute settlement mechanism has helped India challenge unfair trade barriers.

Question 6:
What are the effects of globalization on India's international trade?
Answer:

Globalization has transformed India's international trade through:

  • Increased trade volume due to liberalized policies and market access.
  • Growth in service exports like IT and BPO, boosting the economy.
  • Greater foreign direct investment (FDI) in sectors like retail and manufacturing.
  • Exposure to global competition, improving product quality and innovation.

For instance, globalization has made India a hub for software exports and outsourcing.

Question 7:
Explain the significance of ports in India's international trade.
Answer:

Ports play a crucial role in India's international trade as they serve as gateways for the movement of goods and services. Major ports like Mumbai, Chennai, and Kolkata handle large volumes of cargo, facilitating exports and imports.

They reduce transportation costs and enhance connectivity with global markets. Additionally, ports support economic activities like shipping, logistics, and industrial development in coastal regions.

Question 8:
How does balance of trade impact India's economy?
Answer:

Balance of trade refers to the difference between a country's exports and imports. A positive balance (surplus) boosts foreign exchange reserves and strengthens the economy.

A negative balance (deficit) may lead to dependency on foreign goods and currency depreciation. India often faces a trade deficit due to high imports of crude oil and electronics, affecting economic stability.

Question 9:
Describe the role of WTO in regulating India's international trade.
Answer:

The World Trade Organization (WTO) ensures fair trade practices by setting global trade rules. It helps India resolve trade disputes and access international markets without discrimination.

WTO agreements also promote transparency and reduce trade barriers, benefiting India's export sectors like textiles and agriculture. However, compliance with WTO norms can sometimes challenge domestic policies.

Question 10:
What are the major export commodities of India?
Answer:

India's major export commodities include:

  • Petroleum products (refined crude oil)
  • Gems and jewellery (high-value handicrafts)
  • Pharmaceuticals (generic medicines)
  • Textiles (cotton and silk garments)
These exports contribute significantly to foreign exchange earnings and employment generation.

Question 11:
How does globalization influence India's trade patterns?
Answer:

Globalization has expanded India's trade by integrating its economy with the world. It has increased foreign investments, technology transfer, and market access.

However, it also exposes India to global competition, affecting local industries. Sectors like IT and services have flourished, while traditional sectors face challenges due to cheaper imports.

Question 12:
Explain the concept of trade blocs with reference to India's participation.
Answer:

Trade blocs are groups of countries that promote trade among members by reducing tariffs. India is part of blocs like SAARC and ASEAN, enhancing regional cooperation.

These blocs help India access new markets, improve diplomatic ties, and boost economic growth. However, trade imbalances within blocs can sometimes create challenges.

Long Answer (5 Marks) – with Solutions (CBSE Pattern)

These 5-mark questions are descriptive and require detailed, structured answers with proper explanation and examples.

Question 1:
Compare India's merchandise trade and service trade using a table. Analyze how climate zones (Köppen) influence export patterns.
Answer:
Definition (Köppen)

Merchandise trade involves physical goods, while service trade includes intangible exports like IT. India's tropical (Aw) and arid (BSh) zones impact agricultural exports.


Table: 5+ features
FeatureMerchandise TradeService Trade
Share in GDP (2023)15%40%
Growth Rate7%12%
Top ExportPetroleum (BWh zones)IT (Bengaluru)
Climate VulnerabilityHigh (monsoon-dependent)Low
Employment50 million10 million

Regional Impact
  • Aw zones dominate tea exports
  • BSh regions face water stress
Question 2:
Explain how GIS mapping optimizes India's trade routes. Include a table comparing port efficiencies under different Köppen climates.
Answer:
Definition (Köppen)

GIS mapping analyzes spatial data to reduce logistics costs. Our textbook shows Am (monsoon) climates challenge port operations.


Table: 5+ features
PortClimateCargo HandlingDowntimeConnectivity
MumbaiAw60MT15 days/yrHigh
ChennaiBSh45MT8 days/yrMedium
KolkataAm30MT25 days/yrLow

Regional Impact
  • GIS reduced Chennai's congestion by 20%
  • Monsoon delays cost ₹500cr annually
Question 3:
Analyze India's pharmaceutical exports through the lens of Köppen climate zones. Create a table showing regional production advantages.
Answer:
Definition (Köppen)

India's pharma exports rank 3rd globally. Cwa (humid subtropical) zones like Himachal favor API production.


Table: 5+ features
RegionClimateMajor ProductsExport ValueClimate Risks
HyderabadBShVaccines$12bnHeatwaves
BengaluruAwBiologics$8bnFloods
HimachalCwaAPIs$5bnLandslides

Climate Change Link
  • 2022 Hyderabad production dropped 7% due to droughts
  • Cold chain logistics vulnerable in Cwa
Question 4:
Evaluate how FTAs impact India's textile trade across different Köppen regions. Present data in a comparative table.
Answer:
Definition (Köppen)

Free Trade Agreements boost textile exports. BWh (hot desert) zones like Gujarat dominate synthetic fabrics.


Table: 5+ features
StateClimateFTA BenefitsExport GrowthWater Stress
Tamil NaduAwUK FTA18%High
GujaratBWhUAE FTA25%Critical
PunjabCwaAustralia FTA12%Medium

Regional Impact
  • Surat's dyeing units face BWh heat stress
  • Aw regions benefit from cotton exports
Question 5:
Compare India's merchandise trade and service trade using a table. Analyze how this impacts employment in IT hubs like Bengaluru.
Answer:
Definition (Köppen)

Merchandise trade involves physical goods (e.g., petroleum, gems), while service trade includes IT, tourism, etc.


Table: 5+ features
FeatureMerchandise TradeService Trade
Share in GDP (2023)15%55%
Growth Rate4.2%9.1%
Top ExportPetroleumIT Services
EmploymentLow-skilledHigh-skilled
Climate Risk (Köppen Aw)Port delaysMinimal

Regional Impact

Our textbook shows Bengaluru's IT hubs employ 2 million, but monsoon floods (Köppen Aw) disrupt infrastructure.

Question 6:
Explain how SEZs (Special Economic Zones) boost India's trade. Include a table comparing SEZs in Gujarat (Köppen BSh) and Tamil Nadu (Köppen Aw).
Answer:
Definition (Köppen)

SEZs are tax-free zones attracting FDI, like Gujarat's Kandla SEZ.


Table: 5+ features
FeatureGujarat (BSh)Tamil Nadu (Aw)
Major SEZKandlaChennai
Key IndustryPetrochemicalsAutomobiles
Climate ChallengeDroughtsCyclones
FDI (2023)$12B$18B
Employment500,0001.2M

Climate Change Link

We studied how Tamil Nadu's cyclones (Köppen Aw) damage ports, while Gujarat's droughts (BSh) raise water costs.

Question 7:
Analyze India's tea exports decline using a table comparing Assam (Köppen Cwa) and Kerala (Köppen Am). Discuss climate change effects.
Answer:
Definition (Köppen)

Tea exports fell by 8% (2023) due to erratic rainfall in Assam (Köppen Cwa).


Table: 5+ features
FeatureAssam (Cwa)Kerala (Am)
Production (MT)680M240M
Rainfall Change-12%+18%
Pest AttacksHighLow
Export Share52%15%
GIS DataFlood-proneLandslides

Climate Change Link

Our textbook links Assam's droughts (Cwa) to yield drops, while Kerala's heavy rains (Am) cause landslides.

Question 8:
Evaluate how digital trade (e.g., UPI) impacts India's balance of payments. Compare with China's Alipay using a table.
Answer:
Definition (Köppen)

Digital trade includes UPI transactions, which grew by 120% (2023), reducing cash dependency.


Table: 5+ features
FeatureIndia (UPI)China (Alipay)
Users (2023)300M1.2B
Cross-border UseLimitedGlobal
Climate Risk (Köppen)Aw (monsoons)Cwa (typhoons)
GDP Contribution1.5%3.2%
GIS DataUrban-centricRural-penetrated

Regional Impact

We studied how UPI boosts SMEs in Mumbai (Köppen Aw), but monsoons disrupt internet connectivity.

Question 9:
Compare India's merchandise trade and service trade using a table. Analyze how climate change affects India's trade composition.
Answer:
Definition (Köppen): Merchandise trade involves physical goods (e.g., petroleum, gems), while service trade includes IT, tourism (Aw climate).
Table: 5+ features
FeatureMerchandiseServices
Share in 202365%35%
Growth Rate4.2%9.1%
Top ExportPetroleumIT/BPO
Climate RiskHigh (monsoon delays)Low
EmploymentManufacturingSkilled labor

Regional Impact: Coastal states (Gujarat, Maharashtra) dominate merchandise, while Karnataka leads in services.
Climate Change Link: Erratic monsoons (Amw) disrupt agro-exports (e.g., rice), increasing reliance on services.
Question 10:
Explain India's trade deficit with China using a table. How does GIS data help analyze this imbalance?
Answer:
Definition (Köppen): Trade deficit occurs when imports (e.g., electronics, Cfa climate goods) exceed exports (BSh textiles).
Table: 5+ features
AspectIndia-China Trade (2023)
Deficit Amount$75 billion
Top ImportElectronics
Top ExportIron ore
Growth Trend+12% yearly
Key PortsMumbai, Chennai

Regional Impact: Northern states (Punjab) face industrial decline due to cheap Chinese imports.
GIS Data Link: We studied GIS maps showing import routes (e.g., Kolkata port congestion) and export clusters (textile hubs in Tamil Nadu).
Question 11:
Create a table comparing SEZs and ports in India’s trade. Discuss their Köppen climate vulnerabilities.
Answer:
Definition (Köppen): SEZs (e.g., Noida, BWh climate) boost exports, while ports (e.g., JNPT, Am) handle logistics.
Table: 5+ features
FeatureSEZsPorts
Number270+12 major
Contribution30% exports95% trade volume
ExampleSEZ BangaloreMundra Port
Climate RiskHeatwaves (BSh)Cyclones (Aw)
InvestmentPrivatePublic-private

Regional Impact: Gujarat’s SEZs face water scarcity (BWh), while Odisha’s ports battle cyclones.
Climate Change Link: Rising sea levels threaten Chennai port (As), forcing SEZ relocation inland.
Question 12:
Analyze India’s pharmaceutical exports using a table. How do WTO regulations impact this sector under climate stress?
Answer:
Definition (Köppen): Pharmaceutical exports (e.g., vaccines, Cwg climate-dependent) rank 3rd globally.
Table: 5+ features
FeaturePharma Exports (2023)
Value$25 billion
Top MarketUSA
Growth8.5%
Climate RiskHumidity (Am)
WTO ComplianceTRIPS Agreement

Regional Impact: Hyderabad (Cwa) hosts 40% units; monsoons disrupt supply chains.
WTO Link: Our textbook shows stricter patents (WTO) raise costs, while heatwaves (BSh) demand cold-chain investments.
Question 13:
Explain how GIS data optimizes India's export corridors. Include a table comparing road, rail, and maritime routes.
Answer:
Definition (Köppen)

GIS data maps spatial trade patterns, while export corridors are dedicated routes for goods. We studied how GIS reduces logistics costs by 18% (NCERT 2023).


Table: 5+ features
FeatureRoadRailMaritime
Cost (₹/km)12.508.203.75
Speed (days, Delhi-Mumbai)2.51.84.0
GIS OptimizationTraffic analysisRoute electrificationPort congestion mapping
Cargo TypePerishablesBulk commoditiesContainers
Climate RiskFloods (Aw climate)Heat bucklingCyclones (Am climate)

Regional Impact
  • Delhi-Mumbai corridor uses GIS to avoid flood zones.
  • Chennai port GIS reduces turnaround time by 6 hours.

Climate Change Link

GIS predicts monsoon disruptions, rerouting trucks. Rising sea levels threaten 23% of port infrastructure by 2030.

Question 14:
Analyze India's FTA strategy with ASEAN and EU using a table. Discuss how Köppen zones influence agricultural trade.
Answer:
Definition (Köppen)

FTAs (Free Trade Agreements) reduce tariffs, while Köppen zones classify climate regions. Our textbook shows ASEAN FTA boosted spices trade by 22%.


Table: 5+ features
FeatureASEAN FTAEU FTA (proposed)
Key ExportsSpices (Köppen Aw)Pharma (Temperature-controlled)
Tariff Reduction85% goods90% proposed
Trade Volume (2023)$98 billion$65 billion (pre-FTA)
Climate ConstraintsMonsoon delaysAlpine transport costs
GIS ApplicationsPort efficiency mapsCold chain monitoring

Regional Impact
  • Kerala (Am climate) benefits from ASEAN rubber demand.
  • Punjab (BSh climate) faces EU wheat quality standards.

Climate Change Link

Erratic rainfall in Aw zones threatens pepper yields. EU carbon taxes may impact India's coal-based exports.

Question 15:
Compare SEZ and EEZ contributions to India's trade. Use a table with 5+ parameters and link to monsoon variability.
Answer:
Definition (Köppen)

SEZs (Special Economic Zones) are land-based trade hubs, while EEZs (Exclusive Economic Zones) cover maritime resources. NCERT notes SEZs contribute 30% of exports.


Table: 5+ features
FeatureSEZEEZ
Area Coverage2.3 million hectares2.01 million km²
Key ExportsElectronics (e.g., Sri City)Fisheries (Köppen Am)
Employment1.8 million jobs4 million fishers
Monsoon ImpactPower outagesFishing bans
GIS UsageIndustrial clusteringFish migration maps

Regional Impact
  • Gujarat SEZs face heatwaves (BWh climate).
  • Kerala EEZ suffers from monsoon-driven oil spills.

Climate Change Link

Monsoon shifts disrupt SEZ power supply. Ocean acidification in EEZs reduces shrimp exports by 9% (2022 data).

Question 16:
Compare India's merchandise trade and service trade using a table. Analyze how this impacts GDP growth.
Answer:
Definition (Köppen)

Merchandise trade involves physical goods, while service trade includes intangible exports like IT and tourism. Our textbook shows India's service trade contributes 40% to total exports.


Table: 5+ features
FeatureMerchandise TradeService Trade
Share in Exports (2023)60%40%
Growth Rate5.2%9.1%
Major SectorPetroleum, GemsIT, Tourism
Employment ImpactLow-skilledHigh-skilled
Climate VulnerabilityHigh (Aw climate)Low

Regional Impact
  • Service trade boosts urban GDP (e.g., Bengaluru)
  • Merchandise trade supports rural industries (e.g., Surat diamonds)
Question 17:
Explain how port-led development under Sagarmala impacts India's trade balance. Include a Köppen climate analysis.
Answer:
Definition (Köppen)

Port-led development focuses on coastal infrastructure to boost trade. Major ports like Mumbai (Am climate) handle 70% of cargo.


Table: 5+ features
PortClimate (Köppen)Cargo Capacity (MT)Key ExportConnectivitySagarmala Project
JNPTAm100ElectronicsDedicated Freight CorridorYes
ParadipAw80Iron OreEast Coast RailwayYes

Regional Impact
  • Reduces logistics costs by 20% (NCERT data)
  • Boosts exports in Gujarat (e.g., Mundra Port)

Climate Change Link

Rising sea levels (Aw coastal zones) threaten port infrastructure.

Question 18:
Analyze India's FTA strategy with ASEAN and EU using a comparative table. Discuss trade diversification effects.
Answer:
Definition (Köppen)

Free Trade Agreements (FTAs) reduce tariffs to promote trade. India-ASEAN trade reached $110bn in 2023.


Table: 5+ features
FeatureASEAN FTAEU FTA
Key ExportPharmaceuticalsIT Services
Tariff Reduction90%65%
Geographic FocusTropical (Am)Temperate (Cfb)
Dispute Cases128
Diversification Index0.70.5

Regional Impact
  • ASEAN FTA benefits South India (e.g., Chennai auto hubs)
  • EU FTA boosts services in Delhi-NCR

Climate Change Link

Monsoon variability (Am) affects agro-exports to ASEAN.

Question 19:
Evaluate how e-commerce exports and traditional exports differ in India's trade. Use GIS data examples.
Answer:
Definition (Köppen)

E-commerce exports use digital platforms (e.g., Amazon), while traditional exports rely on physical channels. GIS data shows 65% e-commerce growth in 2023.


Table: 5+ features
FeatureE-commerce ExportsTraditional Exports
Growth Rate25%7%
Major HubBengaluru (GIS cluster)Kandla Port
Climate RiskLow (Cwb)High (BSh)
EmploymentTech youthLabor-intensive
Export Value$8bn$300bn

Regional Impact
  • E-commerce boosts SME participation (e.g., Jaipur handicrafts)
  • Traditional exports dominate Gujarat (BSh climate)

Climate Change Link

Droughts (BSh) disrupt traditional agro-exports.

Question 20:
Explain India's trade deficit with China using GIS data. How does Köppen climate influence this deficit?
Answer:
Definition (Köppen): Trade deficit occurs when imports exceed exports. China is India’s top import partner (GIS data shows 15% trade gap).
Table: 5+ features
FactorIndia’s Export to ChinaIndia’s Import from China
Value (2023)$21B$98B
Major ItemsIron oreElectronics
Climate DependencyMonsoon (Aw)Factory output (Cwa)
Transport CostHigh (Himalayas)Low (shipping)
Policy BarrierTariffsSubsidies

Regional Impact: Northern states face higher logistics costs due to mountainous terrain.
Climate Change Link: Droughts (BSh) reduce iron ore production, worsening deficits.
Question 21:
Analyze India’s ASEAN trade relations with a focus on marine products. How does Köppen climate zone affect this trade?
Answer:
Definition (Köppen): ASEAN is India’s 4th-largest trade partner, with marine products being key exports (e.g., shrimp to Thailand).
Table: 5+ features
AspectIndia’s ExportASEAN Demand
Value (2023)$5.8B12% growth
Top ProductFrozen shrimpProcessed food
Climate RiskCyclone (Am)Stable (Af)
Ports UsedChennai, KochiSingapore
RegulationMPEDA standardsASEAN tariffs

Regional Impact: Coastal states like Kerala benefit, but cyclones disrupt supply chains.
Climate Change Link: Rising sea temperatures (Aw→Am shift) reduce fish stocks, impacting exports.
Question 22:
Compare India’s pharmaceutical exports to the USA and Africa. How does Köppen climate shape demand patterns?
Answer:
Definition (Köppen): Pharmaceutical exports include generics (e.g., vaccines), with USA (Cfa) and Africa (BSh) as key markets.
Table: 5+ features
ParameterUSAAfrica
Export Value (2023)$7.3B$3.5B
Top ProductOncology drugsAntimalarials
Climate InfluenceLow (regulated)High (disease-prone)
LogisticsAir freightRoad transport
RegulationFDA approvalsWHO prequalification

Regional Impact: Gujarat’s pharma hubs face higher costs for African shipments.
Climate Change Link: Africa’s warming (BSh→BWh) increases malaria, boosting demand for Indian drugs.
Question 23:
Compare India's merchandise trade and services trade using a table. Analyze how climate change affects India's export of spices.
Answer:
Definition (Köppen)

Merchandise trade involves physical goods, while services trade includes intangible exports like IT and tourism. Our textbook shows India's merchandise trade dominates but services grow faster.


Table: 5+ features
FeatureMerchandise TradeServices Trade
Share in 202365%35%
Growth Rate4.2%9.1%
Top ExportPetroleumIT Services
Climate VulnerabilityHigh (e.g., crops)Low
EmploymentManufacturingSkilled labor

Regional Impact
  • Spice exports (Kerala) face yield drops due to Aw climate shifts
  • IT hubs (Bengaluru) remain stable with Cwb climate
Question 24:
Explain how GIS data improves India's trade logistics. Include a table comparing port efficiencies under different Köppen climates.
Answer:
Definition (Köppen)

GIS data helps optimize routes by analyzing terrain and weather. We studied how JNPT (Mumbai) uses it to reduce delays.


Table: 5+ features
PortClimate (Köppen)Cargo Handled (MT)Delay DaysGIS Usage
KandlaBWh1103.2Medium
ChennaiAw985.1High
KolkataAm657.4Low

Regional Impact
  • Chennai reduced cyclone losses by 22% with GIS
  • Kolkata struggles with monsoon siltation (Am)
Question 25:
Create a table contrasting India's trade with EU and ASEAN. Discuss how monsoon variability impacts agricultural exports.
Answer:
Definition (Köppen)

The EU trades manufactured goods, while ASEAN focuses on raw materials. Our textbook highlights EU as India's top partner (€88bn in 2022).


Table: 5+ features
FeatureEU TradeASEAN Trade
Key ExportPharmaRice
Climate RiskLowHigh (monsoon)
Trade Volume€88bn$78bn
Growth Rate3.4%8.2%

Climate Change Link
  • Rice exports drop 12% in Am zones during weak monsoons
  • Basmati (Punjab) faces Cwg heat stress
Question 26:
Analyze India's textile trade using a table with 5+ climatic factors. Evaluate how Köppen zones affect cotton production.
Answer:
Definition (Köppen)

Textile trade contributes 12% to exports. Cotton grows best in BSh (Gujarat) and Aw (Maharashtra) climates.


Table: 5+ features
FactorGujarat (BSh)Tamil Nadu (Aw)
Yield (kg/ha)510480
Rainfall DependencyLowHigh
Export Share38%22%
Climate RiskDroughtFloods

Regional Impact
  • Gujarat's BSh cotton faces 15% yield drop from heatwaves
  • Tamil Nadu's Aw crop benefits from irrigation
Question 27:
Explain the significance of international trade for India's economy, highlighting its role in employment generation and GDP growth. Support your answer with relevant examples.
Answer:

International trade plays a crucial role in India's economy by contributing to employment generation and GDP growth. It allows India to export surplus goods and import essential commodities, fostering economic stability.

Here’s how it impacts India:

  • Employment Generation: Sectors like textiles, IT services, and agriculture rely heavily on exports, creating millions of jobs. For example, the textile industry employs over 45 million people.
  • GDP Growth: Trade contributes around 40% to India’s GDP. Exports of software services and pharmaceuticals bring significant foreign exchange, boosting economic growth.

Additionally, trade partnerships like those with the USA and EU enhance market access, further strengthening India’s global economic presence.

Question 28:
Analyze the impact of globalization on India's international trade patterns, focusing on changes in export-import composition and trade partnerships.
Answer:

Globalization has transformed India's trade patterns in the following ways:

  • Export-Import Composition: Earlier, India primarily exported agricultural goods and imported machinery. Now, IT services, pharmaceuticals, and automobiles dominate exports, while crude oil and electronic goods are major imports.
  • Trade Partnerships: India has diversified partnerships beyond traditional allies like Russia to include the USA, EU, and ASEAN nations, boosting trade volumes.

This shift reflects India's integration into the global supply chain, enhancing economic competitiveness.

Question 29:
Analyze the challenges faced by India in international trade, focusing on trade deficits and competition from global markets. Suggest one measure to address these challenges.
Answer:

India faces several challenges in international trade, including trade deficits and global competition.

Trade Deficits: India often imports more than it exports, especially in sectors like crude oil and electronics, leading to a negative balance of trade. For instance, in 2023, India’s trade deficit widened due to high energy imports.

Global Competition: Countries like China and Vietnam offer cheaper manufacturing, making it hard for Indian products to compete. The textile industry, for example, struggles against Bangladesh’s low-cost production.

Suggested Measure: India should focus on export diversification by promoting high-value sectors like renewable energy and pharmaceuticals to reduce dependency on imports and enhance competitiveness.

Question 30:
Explain the significance of international trade for India's economy, highlighting its impact on employment, GDP, and foreign exchange reserves. Support your answer with relevant examples.
Answer:

International trade plays a crucial role in India's economy by fostering economic growth, generating employment, and enhancing foreign exchange reserves. Below is a detailed explanation of its significance:

1. Employment Generation: International trade creates job opportunities in various sectors such as manufacturing, agriculture, and services. For example, the textile industry employs millions of workers due to exports to countries like the USA and EU.

2. Contribution to GDP: Trade contributes significantly to India's Gross Domestic Product (GDP). The export of IT services, pharmaceuticals, and automobiles boosts economic output. For instance, India's IT sector alone contributes around 8% to GDP.

3. Foreign Exchange Reserves: Exports help India earn foreign currency, strengthening its foreign exchange reserves. This stabilizes the economy and supports imports of essential goods like crude oil. For example, India's forex reserves crossed $600 billion in 2021 due to robust exports.

4. Technological Advancement: Trade exposes Indian industries to global competition, encouraging innovation and adoption of advanced technologies. The automobile sector, for instance, has improved quality standards to meet international demands.

5. Diversification of Economy: By trading with multiple countries, India reduces dependency on a single market. For example, trade agreements with ASEAN nations have diversified India's export destinations.

In conclusion, international trade is vital for India's economic development, providing employment, boosting GDP, and ensuring financial stability through foreign exchange earnings.

Case-based Questions (4 Marks) – with Solutions (CBSE Pattern)

These 4-mark case-based questions assess analytical skills through real-life scenarios. Answers must be based on the case study provided.

Question 1:
Analyze India's balance of trade trends from 2015-2023 using the given data table. How does this reflect the composition of trade shift from primary to manufactured goods?
Answer:
Case Deconstruction

Our textbook shows India's trade deficit widened from $118 billion (2015) to $267 billion (2023), with manufactured goods constituting 78% of exports in 2023 versus 65% in 2015.

YearTrade Deficit ($bn)Manufactured Exports (%)Primary Goods Exports (%)
20151186522
20232677812
Theoretical Application
  • GIS data confirms SEZ growth correlates with manufacturing exports
  • Petroleum imports (24% of total) drive deficits despite service surplus
Question 2:
Compare India's export competitiveness in pharmaceuticals vs. textiles using Köppen climate zones (Aw, BSh) and labor cost factors. Support with two examples.
Answer:
Case Deconstruction

Pharma thrives in Aw (tropical wet-dry) zones like Hyderabad with skilled labor, while textiles dominate BSh (semi-arid) regions like Tiruppur using low-cost labor.

FactorPharmaceuticalsTextiles
Climate DependencyAw (AC-dependent)BSh (natural ventilation)
Labor Cost (% of output)18%32%
Critical Evaluation
  • Example: Sun Pharma (high R&D) vs. Arvind Mills (volume-based)
  • Textiles face ASEAN competition despite MFA advantages
Question 3:
Evaluate how trade agreements (RCEP vs. FTA with UAE) impact India's geographic specialization in gemstones and petroleum products.
Answer:
Case Deconstruction

UAE FTA (2022) boosted polished diamond exports by 37%, while RCEP withdrawal protected domestic petroleum refineries from ASEAN competition.

AgreementKey ExportGrowth Rate (2022-23)
UAE FTACut Diamonds+37%
Non-RCEPPetroleum Products+12%
Theoretical Application
  • Surat's diamond cluster benefits from Dubai's trade hub status
  • Jamnagar refineries leverage geographic proximity to Gulf crude
Question 4:
Assess the spatial pattern of India's IT service exports using GIS heatmaps showing Bengaluru (Cwa) vs. Pune (Csa) Köppen zones. What infrastructure factors explain this clustering?
Answer:
Case Deconstruction

GIS heatmaps reveal 68% IT exports originate from Cwa (Bengaluru) and Csa (Pune) zones, combining moderate climates with tier-I infrastructure.

CityKöppen ZoneIT Export ShareFiber Optic Density
BengaluruCwa42%98km/sq.km
PuneCsa26%76km/sq.km
Critical Evaluation
  • Example: Infosys campuses align with international airport connectivity
  • Monsoon resilience (Csa) ensures uptime for Pune's BPOs
Question 5:
Analyze India's export composition shift from 2000 to 2023 using GIS trade flow maps. How does this reflect economic diversification?
Answer:
Case Deconstruction

Our textbook shows India's exports shifted from primary goods (tea, textiles) to manufactured/tech products (pharma, IT services). GIS maps highlight new trade corridors with Africa and ASEAN.

Theoretical Application
  • Service sector growth (59% of GDP) aligns with Rostow's modernization theory
  • Export diversification reduces vulnerability to commodity price shocks
Critical Evaluation
Feature20002023
Top ExportTextiles (12%)Petroleum (19%)
Tech Share5%34%
Trade PartnersEU, USAUAE, China
Growth Rate7%14%
FDI Inflow$4B$84B
Question 6:
Evaluate how Köppen climate zones (Aw, BSh) influence India's agricultural exports. Support with monsoon variability data.
Answer:
Case Deconstruction

India's Aw (tropical savanna) zone produces 60% of basmati rice exports, while BSh (semi-arid) grows drought-resistant millets. Our textbook links monsoon failure years (2015, 2022) to export drops.

Theoretical Application
  • MSP policies stabilize cash crop exports despite rainfall variability
  • Climate-smart agriculture adoption in Punjab (Aw) increased yields by 22%
Critical Evaluation
Climate ZoneCropExport ValueRainfall DependenceGIS Yield Data
AwRice$8.7BHigh3.2t/ha
BShMillets$1.2BLow1.8t/ha
Question 7:
Assess the impact of SEZ policies on India's electronics exports using trade balance data. Include GIS industrial clusters analysis.
Answer:
Case Deconstruction

SEZs like Noida (GIS cluster ID: UP-12) boosted smartphone exports to $11B (2023). However, our textbook notes persistent trade deficit in semiconductors (-$21B).

Theoretical Application
  • Agglomeration economies reduced production costs by 18% in Tamil Nadu SEZs
  • PLI schemes improved value addition from 15% to 38%
Critical Evaluation
ParameterPre-SEZ (2010)Post-SEZ (2023)
Export Growth7%24%
FDI Inflow$2.1B$15.8B
Employment0.5M2.3M
Local Sourcing12%41%
Tech TransferLowMedium
Question 8:
Compare India's marine product exports with Vietnam using WTO tariff data. How do trade agreements like RCEP create competitive advantages?
Answer:
Case Deconstruction

Vietnam's shrimp exports grew 300% after EU FTA (0% tariffs), while India faces 4-7% tariffs. Our textbook cites SPS measures as non-tariff barriers for Indian seafood.

Theoretical Application
  • RCEP's rules of origin benefit Vietnam's processing zones
  • India's MPEDA quality certifications improved market access
Critical Evaluation
FactorIndiaVietnam
Export Value (2023)$7.8B$9.2B
Tariff Advantage4% avg0-2%
Processing Capacity1.2M tons1.8M tons
Cold Chain Coverage38%67%
Labor Productivity85%112%
Question 9:
Analyze India's merchandise trade deficit using 2023 data. How does export diversification impact this deficit?
Answer:
Case Deconstruction

India's merchandise trade deficit in 2023 stood at $267.45 billion, with imports exceeding exports due to high crude oil and electronics demand. Our textbook shows primary goods dominate exports, while capital goods lead imports.

Theoretical Application
  • Export diversification reduces reliance on volatile sectors like textiles
  • Pharmaceuticals and IT services show 12% growth, offsetting deficits
Critical Evaluation
FeaturePre-DiversificationPost-Diversification
Trade Balance-$300bn-$267bn
Top ExportPetroleum (18%)Engineering Goods (25%)
Question 10:
Compare India's ASEAN trade with EU trade using Köppen climate zones. How does monsoon variability affect agricultural exports?
Answer:
Case Deconstruction

ASEAN (Aw climate) imports 22% of India's spices, while EU (Cfb) prefers basmati rice. Monsoon failures in 2022 caused 15% drop in rice exports.

Theoretical Application
  • Erratic monsoons disrupt cropping patterns in Cwa regions
  • GIS data shows Punjab's BSh climate becoming unsuitable for wheat
Critical Evaluation
ParameterASEANEU
ClimateAwCfb
Main ImportSpicesRice
Growth Rate8.7%4.2%
Question 11:
Evaluate how Gati Shakti impacts India's logistics performance index. Use port data examples.
Answer:
Case Deconstruction

Gati Shakti integrated 16 ministries to reduce export clearance time. JNPT's turnaround improved from 44 to 27 hours, boosting LPI rank from 44 to 38.

Theoretical Application
  • Multimodal hubs cut Chennai-Mumbai transit by 30%
  • Cold chains reduced agricultural wastage by 18%
Critical Evaluation
PortPre-GSPost-GS
JNPT44 hrs27 hrs
Kolkata51 hrs38 hrs
LPI Rank4438
Question 12:
Assess how RUPEEDOLLAR exchange rate fluctuations affect IT service exports. Support with NASSCOM data.
Answer:
Case Deconstruction

When rupee depreciated to 83.40/$ in 2023, IT exports grew 9.4% as per NASSCOM. However, rising costs offset gains for mid-tier firms.

Theoretical Application
  • TCS gained $1.2bn contracts from forex advantage
  • Wipro reported 2% margin pressure due to hedging
Critical Evaluation
QuarterExchange RateExport Growth
Q1 202381.907.1%
Q4 202383.409.4%
Client Retention78%82%
Question 13:

Read the following case study and answer the question below:

India's trade deficit widened to a record high in 2025 due to increased imports of crude oil and electronic goods, while exports of textiles and agricultural products saw a decline. The government has introduced new policies to promote export-oriented industries and reduce dependency on imports.

Q. Analyze the impact of India's growing trade deficit on its economy and suggest two measures to address this issue.

Answer:

Impact of Trade Deficit:

  • It leads to depreciation of the rupee as more foreign currency is demanded for imports.
  • Increased current account deficit, putting pressure on foreign exchange reserves.
  • Higher dependency on imports can make the economy vulnerable to global price fluctuations.

Measures to Address:

  • Promote Make in India initiatives to boost domestic manufacturing and reduce import dependency.
  • Enhance export competitiveness by improving quality standards and providing subsidies to key sectors like textiles and agriculture.

Additionally, focusing on alternative energy sources can reduce crude oil imports, while digital infrastructure development can support electronic manufacturing within India.

Question 14:

Examine the given data and answer the question:

India's top trading partners in 2025 were the USA, China, and UAE. While exports to the USA grew by 12%, imports from China surged by 18%. The UAE remained a key partner for petroleum products and gems/jewelry.

Q. Discuss the reasons behind India's strong trade relations with the USA and China, and explain how diversification of trade partners can benefit India.

Answer:

Reasons for Strong Trade Relations:

  • USA: High demand for Indian IT services, pharmaceuticals, and textiles. The USA is also a major investor in India's technology sector.
  • China: Supplies electronic goods, machinery, and chemicals at competitive prices, supporting India's manufacturing and infrastructure growth.

Benefits of Diversification:

  • Reduces over-dependence on a few countries, minimizing risks from geopolitical tensions or economic slowdowns.
  • Opens new markets for Indian exports, such as Africa and Latin America, boosting trade balance.

For instance, expanding trade with the European Union and ASEAN nations can enhance exports of automobiles and spices, while reducing reliance on Chinese imports.

Question 15:
India has been focusing on increasing its exports of pharmaceuticals to African nations. Analyze the potential benefits and challenges of this trade strategy for India's economy.
Answer:

India's focus on increasing pharmaceutical exports to African nations presents several benefits and challenges:

  • Benefits:
    1. Economic Growth: Increased exports boost foreign exchange earnings and strengthen India's trade balance.
    2. Employment Generation: Expansion of the pharmaceutical sector creates jobs in manufacturing, R&D, and logistics.
    3. Strategic Partnerships: Strengthening trade ties with Africa can lead to long-term diplomatic and economic collaborations.
  • Challenges:
    1. Regulatory Hurdles: Different drug approval processes in African countries may delay market access.
    2. Competition: Other countries like China also target African markets, increasing competition.
    3. Infrastructure: Poor logistics and storage facilities in some African nations can hinder distribution.

Overall, while the strategy has high potential, addressing these challenges is crucial for sustained success.

Question 16:
The Indian government has recently signed a Free Trade Agreement (FTA) with a Southeast Asian country. Discuss how this agreement might impact India's textile industry, considering both opportunities and risks.
Answer:

The Free Trade Agreement (FTA) with a Southeast Asian country can significantly impact India's textile industry:

  • Opportunities:
    1. Market Expansion: Easier access to the partner country's market can increase demand for Indian textiles.
    2. Cost Efficiency: Reduced tariffs lower production costs, making Indian textiles more competitive globally.
    3. Technology Transfer: Collaboration with Southeast Asian firms can bring advanced manufacturing techniques.
  • Risks:
    1. Increased Competition: Local Indian manufacturers may face stiff competition from cheaper imports.
    2. Dependency: Over-reliance on the FTA partner for raw materials like synthetic fibers could be risky.
    3. Quality Standards: Meeting the partner country's stringent quality norms may require additional investments.

To maximize benefits, India should focus on upgrading infrastructure and skill development in the textile sector.

Question 17:
India's trade balance has been fluctuating due to changes in global demand and domestic policies. Analyze the given data on India's exports and imports (2015-2025) and answer the following:

1. Identify the trend in India's trade deficit over the years.
2. Suggest two measures to improve India's export competitiveness in the global market.
Answer:

1. Trend in India's trade deficit:
The data shows that India's trade deficit has been inconsistent, with periods of widening and narrowing gaps. Factors like rising crude oil prices and reduced demand for Indian goods in key markets contribute to this fluctuation. For instance, the deficit peaked in 2022 due to high import bills but improved slightly in 2024 with government incentives for exporters.

2. Measures to improve export competitiveness:

  • Diversification of export basket: Focus on high-value sectors like pharmaceuticals and IT services to reduce dependency on traditional goods.
  • Quality infrastructure: Invest in logistics and port facilities to lower shipment costs and delays, making Indian products more attractive globally.

Additionally, trade agreements with emerging economies can open new markets, while skill development programs can enhance workforce productivity.

Question 18:
The Indian government introduced the Production Linked Incentive (PLI) scheme to boost manufacturing and exports. Based on this initiative, answer:

1. How does the PLI scheme align with India's international trade goals?
2. Explain its potential impact on India's balance of trade in the long run.
Answer:

1. Alignment with trade goals:
The PLI scheme directly supports India's aim to become a global manufacturing hub by offering financial incentives to industries like electronics and automobiles. This reduces reliance on imports and encourages export-oriented production, aligning with the 'Make in India' vision.

2. Impact on balance of trade:

  • Reduced imports: Local manufacturing of goods like mobile components cuts import dependency, narrowing the trade deficit.
  • Increased exports: Competitive pricing and quality improvements under PLI can enhance India's share in global markets, improving the current account balance.

Over time, this could stabilize India's foreign exchange reserves and strengthen its position in global value chains.

Question 19:
India's trade deficit has been a persistent issue. Analyze the given data on India's imports and exports (2023-24) and suggest two measures to reduce the trade deficit while promoting sustainable trade practices.
Answer:

India's trade deficit occurs when the value of imports exceeds exports. To address this, the following measures can be adopted:

  • Promote Export-Oriented Industries: Focus on sectors like pharmaceuticals, IT services, and handicrafts where India has a competitive advantage. Government incentives and better infrastructure can boost exports.
  • Reduce Dependency on Non-Essential Imports: Encourage domestic production of goods like electronic components and crude oil through policies like Make in India and renewable energy adoption to cut import bills sustainably.

Additionally, adopting green trade policies such as eco-friendly packaging and carbon-neutral logistics can enhance global demand for Indian goods while aligning with sustainable development goals.

Question 20:
Study the case of India's trade relations with ASEAN countries. Explain how the Free Trade Agreement (FTA) has impacted India's export-import dynamics, and identify one challenge faced by Indian traders in this region.
Answer:

The Free Trade Agreement (FTA) with ASEAN has significantly influenced India's trade dynamics:

  • Boost in Exports: Indian products like automobiles, textiles, and spices gained better market access due to reduced tariffs, increasing export volumes.
  • Rise in Imports: Cheaper imports of electronic goods and palm oil from ASEAN nations have led to competition for domestic industries.

A major challenge faced by Indian traders is non-tariff barriers, such as stringent quality checks and complex customs procedures in ASEAN countries, which hinder smooth trade operations. Addressing these through diplomatic negotiations and standardization can improve trade efficiency.

Question 21:
India's trade deficit has been a persistent issue in recent years. Analyze the given data on India's major imports and exports (2023-24) and suggest two strategic measures to reduce the trade deficit while promoting sustainable trade practices.
Answer:

India's trade deficit arises when the value of imports exceeds exports. Based on the data, key imports include crude oil, electronic goods, and gold, while major exports are pharmaceuticals, textiles, and IT services.

To reduce the deficit sustainably:

  • Promote domestic manufacturing: Encourage Make in India initiatives to reduce reliance on imported electronics and machinery by boosting local production.
  • Diversify export markets: Expand trade agreements with untapped regions like Africa and Latin America for textiles and pharmaceuticals, reducing dependency on traditional markets.

Additionally, investing in renewable energy can cut crude oil imports, aligning with environmental goals.

Question 22:
The Indian government introduced the Production Linked Incentive (PLI) scheme to boost exports. Examine how this scheme can transform India's position in global trade, with reference to the electronics and automobile sectors.
Answer:

The PLI scheme offers financial incentives to manufacturers to enhance domestic production and exports. Its impact on key sectors:

  • Electronics: By attracting global companies like Apple and Samsung to manufacture in India, it reduces import dependency and positions India as a mobile-export hub.
  • Automobiles: Incentivizing electric vehicle (EV) production can make India a competitive player in the global green automotive market, boosting exports.

This scheme also generates employment and improves trade balance by substituting imports with locally made goods. Long-term benefits include technological advancement and stronger global trade ties.

Chat on WhatsApp