DOMESTIC AND FOREIGN TRADE OF INDIA

DOMESTIC AND FOREIGN TRADE OF INDIA

II. 1. What is Balance of Trade? Mention its types?

            The difference between................balanced trade.

2. How do our Five Year Plans affect our foreign trade?

With the introductiton of Five Year...........to other countries

3. How did the First and Second World Wars cause in adverse effect on our foreign trade?

            Most of our foreign trade during the pre-independence period was with Britain. During the First and Second World Wars, Britain was cut off by enemy countries. This adversely affected our foreign trade as it reduced more than half of our trade with Britain.

4. Why was EXIM Bank started by the govt?

            Export-Import Bank is primarily started with the objective of promoting exports. It stands guarantee for the organisations which produce goods for export.

III.1. What is internal trade? Where does it generally take place?

Internal trade means buying ........ centres.

2. What were the effects of partition on our foreign trade?

            The partition of India in 1947 had an adverse effect on our foreign trade. We lost jute, cotton and wheat growing areas. We had to import these goods from other countries and our exports too declined.

3. What do you mean by entrepot trade? Give example.

            Entrepot trade means buying goods from one country with a view to selling them to other countries. Singapore is the best example of Entrepot

4. Which are the different ways of carrying on foreign trade?

            Most of the foreign trade is carried through water ways. In recent years perishables and light goods are carried through airways too. Land routes are also used to carry on trade with neighbouring countries.

5. What is the difference  between balance of trade and balance of payment?

            Balance of Trade is the difference between the value of visible exports and visible imports. It includes only visible items and does not take into account invisible services.

            Balance of payment, on the other hand, shows the relationship between a country’s total payments to all countries and its total receipts from them on all accounts, both visible and invisible items.

6. What is informal rationing?

            The Government, to ensure supply of essential commodities to all people at fair prices, has started informal rationing. It issues ration cards to all families and through these cards commodities like sugar, rice, wheat, kerosine, etc. can be purchased from these shops. This is called informal rationing.

IV. 1. What is the need for Foreign Trade to any country?

            No country is self-sufficient in all natural resources. Some natural resources are available in plenty in some countries. These countries produce plenty of goods using these resources. these goods have to be exported to other countries . In the same way, some countries are deficient in some natural resources and have to depend on other countries for their requirements. They import these goods from other countries. Thus there is a great need for foreign trade to any country.

2. What is the importance of Foreign Trade in India’s economic development?

            In Indian economic development.........peace and friendship.

3. List out the important imports and exports of India. Generally what is the direction of our foreign trade?

            The main imports of imports are petroleum and petroleum products, machinery and machine tools, chemicals, medicines, chemical fertilizers, metals and consumer goods.

            Our main items of export are raw cotton, leather products, iron ore,  manganese ore, mica, tobacco, tea, spices, jute products, ready-made garments, coir products, cashew nuts, handicrafts, etc.  

4. What are the steps taken to overcome our adverse Balance of Payments?

            The steps taken to overcome adverse balance of payment are:

* import restrictions

* exchange of goods in foreign trade

* encouragement given for exports

* borrowings from international monetary institutions

* devaluation of currency

5. What are the measures undertaken by our government to increase our exports?

            Steps taken by the govt to increase our exports are-

·         Removal or reduction of export duty on some commmodities

·         subsidy for shipping and railway freight charges

·         corporations set up to increase exports

·         credit facilities to the exporters at low interest rates

·         financial institutions like EXIM Bank to help exports have been set up

·         Bilateral trade agreements with other countries to increase trade.

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1. One of the steps to reduce competition between the large-scale and small-scale industries is exesss cess.

2. Excess cess is levied on large-scale industries with a view to utilize that money for the promotion and development of small-scale industries.

3. The institution set up for designing and adopting machines suitable for Indian conditions is Industrial Design Centre

4. The purpose of organizing many exhibitions by National Small Scale Industries Corporation is to create demand for exports.

5. The place where necessary infrastructure, power, water and energy supply are provided to house small scale industries is industrial estates.

6. State Finance Corporation (SFC) is set up to provide medium-term loans to small producers.

7. The body set up to provide assistance for the organization of industrial estates to house small-scale industries is National Small Industries Corporation.

8. A body set up by the central govt to enable the small producers to purchase machinery is National Small Industries Corporation.

9. The objective of Central Small Industries Organization is to provide guidance to craftsmen in organising small scale industries.

10. The Central Small Industries Organisation is started with an objective of providing small-scale and cottage industries with technical assistance.