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Definition:
The difference between the value of export of goods and the value of import of goods is defined as the Balance of Trade(BoT)
When Value of exports > Value of Imports, then BoT is
said to be favourable
When Value of exports <Value of Imports, then BoT is
said to be unfavourable
Rise in imports due to: Pent up demand of war Shortage of food and Raw Material Rise in capital goods
Trade Deficit largely due to programmes of
industrialisation
India Devalued Rupee by 36.5% in 1966 Better Crop Production during 1968-69 Favourable BoT for the 1st time in 1972-73(+104 crore)
Hike in Oil Prices started in Oct 1973 High Import bills due to petroleum,fertilizers and
foodgrains Significant improvement in Exports 2nd Favourable BoT in1976-77(+69 crore) In 1978,Janata party followed a policy of haphazard import liberalisation
1986 -90
17382
25112
-7730
Increase in Price of Petroleum products by OPEC Govt. approached IMF for a huge loan in Nov 1981 Then, a slight decline in POL because: Global prices of oil ..downward trend Increased Production by ONGC
1997 -02
168400
204763
-36363
Liberalization Policy & Reduction of custom duties Slowdown in Indias Foreign Trade due to South East Asian Crisis Continued recession in Japan Economic crisis in Russia in 1998
2008 - 09
2009 - 10
840752
784268
1374435
1237707
-533683
-453439
Crisis Increased Competition from China and Taiwan Exports of Textiles affected Failure of large industrial houses to boost exports Non Tariff barriers created by developed countries Use of Anti dumping duties by these countries have affected exports
Bulk
Non Bulk
Petroleum Products
Cereals,Pulses,etc
Capital goods
Export Items
17005
135778 40847 36815 58116 230873
(7.4)
(58.8) (17.7) (15.9)
184635
746949 330384 146860
(13.4)
(54.4) (24.1) (10.7) (19.6) (100)
Export
Manufactured goods
Exporting Countries
Importing Countries
Challenges
External Factors: Low World Demand Restrictions on our goods entering foreign countries Competition from countries like China Internal Factors: Increasing Domestic Demand
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