Exam-useful questions from this chapter, grouped by marks, each with a full model answer. Try writing the answer yourself first, then check it against this one.
1 1-Mark Questions
Q. What is meant by international trade?
Answer: Trade between two or more countries is termed international trade.
Q. What was the value of India’s external trade in 1950-51?
Answer: In 1950-51, India’s external trade was worth Rs. 1,214 crore.
Q. What share of India’s total export value did the manufacturing sector alone account for in 2021-22?
Answer: The manufacturing sector alone accounted for 67.8 per cent of India’s total export value in 2021-22.
Q. How many major ports does India presently have?
Answer: India presently has 12 major ports (and 200 minor or intermediate ports).
Q. Name the two important ports India lost as a result of Partition.
Answer: India lost Karachi port, which went to Pakistan, and Chittagong port, which went to the then East Pakistan, now Bangladesh.
Q. Mormugao Port was remodelled in 1961 to handle the export of which mineral, and to which country?
Answer: Iron ore, exported to Japan.
Q. Since when has the UDAN scheme been operationalising airports, and how many has it operationalised so far?
Answer: The UDAN scheme has been operationalising airports since 2017; a total of 73 unserved/underserved airports, including 9 heliports and 2 water aerodromes, have been operationalised under it.
Q. In which year was Chennai Port, an artificial harbour, built?
Answer: Chennai Port, an artificial harbour, was built in 1859.
2 2-Mark Questions
Q. Distinguish between port and harbour.
Answer: A harbour is a sheltered stretch of sea or river water that gives ships safe anchorage, and can be natural (like Mumbai or Cochin) or artificial (like Chennai). A port is a harbour that has been further developed with berths, cranes and warehousing infrastructure, so that cargo and passengers can actually be loaded and unloaded there.
Q. Explain the meaning of hinterland.
Answer: A hinterland is the inland area served by a port for collecting goods for export and distributing imported goods. The chapter notes that demarcating a hinterland’s boundary is difficult, since it is not fixed over space, and in most cases the hinterland of one port overlaps with that of another.
Q. Why does India’s trade deficit continue year after year?
Answer: In every year listed in Table 8.1, the value of India’s imports has exceeded the value of its exports (for example, in 2021-22, imports were Rs. 45,72,775 crore against exports of Rs. 31,47,021 crore), so India’s trade balance stays negative, that is, in continuing deficit.
Q. Name the ports of India located on the east coast.
Answer: The ports located on India’s east coast are Kolkata (Shyama Prasad Mookerjee), Haldia, Paradwip, Visakhapatnam, Chennai, Kamarajar (Ennore) and V.O. Chidambaranar (Tuticorin).
Q. What effect did the 1973 energy crisis have on India’s import trade?
Answer: The 1973 energy crisis pushed up the price of petroleum, which also pushed up India’s import budget. Foodgrain import, already discontinued by the success of the Green Revolution, was replaced by fertiliser and petroleum imports.
Q. Name the items whose export has increased in recent years, even as traditional items like cashew have declined.
Answer: Even as the export of a traditional item like cashew has declined due to tough international competition, an increase has been registered in the export of floricultural products, fresh fruits, marine products and sugar.
Q. What measures has India already started adopting to increase its share in international trade?
Answer: India aims to double its share in international trade within the next five years. It has already started adopting measures such as import liberalisation, reduction in import duties, delicensing, and a change from process patents to product patents.
Q. State the advantages and disadvantages of air transport in international trade.
Answer: Advantage: air transport takes the least time to carry and handle high-value or perishable goods over long distances. Disadvantage: it is very costly and unsuitable for carrying heavy and bulky commodities, which is exactly why its participation in international trade stays smaller than that of oceanic routes.
3 4-Mark Questions
Q. Using Table 8.2, describe the changes in the composition of India’s exports between 2015-16 and 2021-22.
Answer: According to Table 8.2, India’s export composition changed as follows between 2015-16 and 2021-22: (1) Agriculture and allied products fell from 12.6% to 11.9%. (2) Manufactured goods fell from 72.9% to 67.8%. (3) Crude petroleum and products rose from 11.9% to 16.4%. (4) Other commodities rose from 1.1% to 1.9%. (5) Ore and Minerals (1.6% to 2.0%) stayed largely constant. In short, the shares of agriculture and manufacturing have fallen, while the shares of petroleum and other commodities have risen.
Q. Discuss the changes in the composition of India’s import trade over time.
Answer: In the 1950s and 1960s, foodgrain, capital goods, machinery and equipment were India’s major imports, and the balance of payment was adverse because imports were more than exports, in spite of all the efforts of import substitution. After the 1970s, the success of the Green Revolution ended foodgrain imports, but the 1973 energy crisis pushed up petroleum prices and the import budget along with it; foodgrain import was replaced by fertiliser and petroleum. Today, machine and equipment, special steel, edible oil and chemicals largely make up the import basket, while capital goods imports have kept declining steadily. According to Table 8.4, the share of fuel (coal, POL) rose from 25.4% (2015-16) to 31.6% (2021-22), showing the rise in petroleum imports: petroleum is used as a fuel and as an industrial raw material, the rise reflects the tempo of rising industrialisation and a better standard of living, and sporadic price rises in the international market add to it.
Q. Give a brief account of any four major ports of the west coast.
Answer: (1) Deendayal Port (Kandla): at the head of the Gulf of Kuchchh, caters to western and north-western India, specially designed to receive petroleum, petroleum products and fertiliser. (2) Mumbai Port: a natural harbour and India’s biggest port, 20 km long and 6-10 km wide with 54 berths and the country’s largest oil terminal. (3) Jawaharlal Nehru Port (Nhava Sheva): developed as a satellite port to relieve pressure on Mumbai, and India’s largest container port. (4) Mormugao Port: a natural harbour at the entrance of the Zuari estuary in Goa, which gained significance after its 1961 remodelling to export iron-ore to Japan.
Q. Give a brief account of any four major ports of the east coast.
Answer: (1) Kolkata (Shyama Prasad Mookerjee) Port: on the river Hugli, developed by the British, but has lost significance due to silting of the Hugli and diversion of exports to other ports. (2) Haldia Port: 105 km downstream from Kolkata, built to reduce congestion there, handles bulk cargo like iron ore, coal, petroleum products, jute and cotton yarn. (3) Paradwip Port: in the Mahanadi delta, with the deepest harbour among Indian ports, developed mainly to handle large-scale export of iron-ore. (4) Visakhapatnam Port: a land-locked harbour in Andhra Pradesh, connected to the sea by a channel cut through solid rock and sand, handling iron-ore, petroleum and general cargo.
Q. What changes have taken place in the development and management of Indian ports since Independence?
Answer: Indian ports have kept growing after Independence, and are today handling large volumes of both domestic and overseas trade with modern infrastructure. Development and modernisation were earlier the sole responsibility of government agencies, but with rising traffic and the need to bring Indian ports up to international standards, private entrepreneurs have also been invited for modernisation. Policy for the 12 major ports is decided by the central government, while the 200 minor/intermediate ports are regulated by state governments. Port capacity itself has grown from 20 million tonnes in 1951 to more than 837 million tonnes in 2016.
Q. Explain the role of airports and air transport in India’s international trade.
Answer: Air transport plays an important role in international trade, especially for high-value or perishable goods that need to be carried over long distances in the least possible time. As per the Annual Report 2016-17, 25 major airports were functioning in the country (including Ahmedabad, Bengaluru, Chennai, Delhi and Mumbai). Since 2017, the UDAN scheme has operationalised 73 unserved/underserved airports, including 9 heliports and 2 water aerodromes, widening air connectivity. However, because it is very costly and unsuitable for heavy and bulky goods, air transport’s overall share in international trade remains much smaller than that of the oceanic routes.
4 6-Mark Questions
Q. Describe the composition of export and import trade of India.
Answer: Export composition (Tables 8.2, 8.3): manufactured goods form the largest share of India’s exports (67.8% in 2021-22, worth Rs. 21,32,296 crore), with engineering goods and gems and jewellery contributing significantly, though China and other East Asian countries remain major competitors. Agriculture and allied products (11.9%, worth Rs. 3,75,742 crore) come third, after crude and petroleum products, where a traditional item like cashew has declined while floriculture, fresh fruits, marine products and sugar have grown. Crude petroleum and products (16.4%) have increased their share, while ore and minerals (2.0%) have stayed constant.
Import composition (Tables 8.4, 8.5): apart from ‘others’ (38.5%), the largest share is fuel (coal, POL), at 31.6% in 2021-22, followed by capital goods (10.1%, in steady decline) and then fertiliser and food-related items. Table 8.5 shows petroleum, oil and lubricants (Rs. 12,07,803 crore) as the single largest import item, followed by non-ferrous metals, chemical products, and pearls and precious stones. The value of imports has always exceeded that of exports, keeping India’s trade balance in deficit (-Rs. 14,25,753 crore in 2021-22).
Q. Write a note on the changing nature of the international trade of India.
Answer: Since Independence, India’s international trade has changed radically in volume, composition and direction. In volume, foreign trade grew from Rs. 1,214 crore in 1950-51 to about Rs. 77,19,796 crore by 2020-21, driven mainly by growing momentum in manufacturing, the government’s liberal policies, and the diversification of export markets. In composition, the export share of agriculture and manufacturing has fallen while that of petroleum and other commodities has risen; on the import side, foodgrain import was replaced by fertilisers and petroleum, while capital goods imports have declined steadily. In direction, India today trades with most countries and major trading blocks of the world, especially Asia and ASEAN (whose import trade with India was worth Rs. 29,18,577 crore in 2021-22). India’s target is to double its share of world trade (currently only about 1%) within the next five years, through measures such as import liberalisation, reduction in import duties, delicensing and a change from process patents to product patents. Even so, since imports have always exceeded exports, the trade deficit remains a persistent challenge.
Q. Describe India’s major ports and explain how they function as gateways of international trade.
Answer: India is surrounded by sea on three sides, and its long coastline has supported the growth of 12 major and 200 minor/intermediate ports. Ports became significant gateways of international trade after European traders arrived and the British colonised the country; the British used them as suction points for the resources of their hinterlands, and railway extension linked local markets all the way up to international markets. On the west coast lie Deendayal (Kandla), Mumbai, Jawaharlal Nehru (Nhava Sheva), Mormugao, New Mangalore and Cochin; on the east coast lie Kolkata (with its satellite port Haldia), Paradwip, Visakhapatnam, Chennai, Kamarajar (Ennore) and V.O. Chidambaranar (Tuticorin) — interestingly, the west coast has more ports than the east coast. After Partition took away Karachi and Chittagong, new ports like Kandla and Diamond Harbour were developed to compensate. Since Independence, port capacity has grown from 20 million tonnes (1951) to over 837 million tonnes (2016), and private entrepreneurs are now also invited to modernise ports, keeping them as effective gateways for India’s growing international trade.
Q. Based on Table 8.6, describe the direction of India’s import trade, and discuss India’s future trade targets and measures.
Answer: According to Table 8.6, India’s trade relations extend to most countries and major trading blocks of the world. In 2021-22, region-wise imports were highest from Asia and ASEAN (Rs. 29,18,577 crore), followed by Europe (Rs. 6,40,577 crore), North America (Rs. 3,78,041 crore), Africa (Rs. 3,68,156 crore), and lowest from Latin America (Rs. 1,61,995 crore). Imports from every region rose substantially between 2016-17 and 2021-22, showing India’s growing dependence on international trade. India’s stated goal is to double its share in international trade within the next five years, and it has already begun adopting measures such as import liberalisation, reduction in import duties, delicensing, and a change from process patents to product patents to work toward this target.
5 Case Studies
(A) 1 mark What was the value of India’s foreign trade in 1950-51?
Answer: Rs. 1,214 crore.
(B) 1 mark What was India’s trade balance (deficit) in 2021-22?
Answer: -Rs. 14,25,753 crore.
(C) 2 marks According to the passage, what reasons are given for the sharp rise in India’s foreign trade?
Answer: The passage gives three reasons: the momentum picked up by the manufacturing sector, the liberal policies of the government, and the diversification of markets.
(A) 1 mark According to the Annual Report 2016-17, how many major airports were functioning in the country?
Answer: 25 major airports.
(B) 1 mark How many unserved/underserved airports have been operationalised in total under the UDAN scheme?
Answer: 73 airports, including 9 heliports and 2 water aerodromes.
(C) 2 marks According to the passage, what are the advantages and disadvantages of air transport?
Answer: The advantage is that air transport takes the least time to carry high-value or perishable goods over long distances. The disadvantage is that it is very costly and unsuitable for carrying heavy and bulky commodities, which keeps its share in international trade smaller than that of oceanic routes.