ABSTRACT:

To become a highly developed nation trade facilitation is the key component. No country can
sustain at the global level without resorting to foreign trade. Foreign trade is a best practice policy
across the globe to achieve economic growth by becoming one of the players of it. India has also
embarked on the same since independence with an aim to become the world’s top most one and to
sustain the image at the global level. As a fact Globalisation has brought the world under one
umbrella and has left its spots everywhere. India has shown great progress in terms of exports since
the last few years; but has shown fluctuations over time and even trade deficit; however has a
potential to grow at an enormous rate than any other country. Being the availability of the resources
in the country it is said that India will be the leading exporters throughout the globe in the coming
years. In this paper we will examine how far India has benefitted from the foreign trade and what
measures should be taken to sustain and progress in the long run.
INTRODUCTION:
In the 15th century there was a notion that a country's main stay is determined by the gold and the
silver. So countries which export more and more get more and more imports in the form of gold
and silver which describe the image of a country at the global level. It viewed the well-being of
the own nation to be of prime importance (Mercantilism). Its doctrine was to acquire precious
metals to grow rich. Another notion was about the countries having favourable factor endowments
i.e. resources that could benefit a lot in international trade due to absolute and comparative
advantage in producing goods at home in which they are expert. It argues that countries with capital
abundant will tend to specialise in capital intensive goods and will export some of these in which
they have expertise. Similarly labour intensive will specialise in labour intensive goods. These
countries will benefit from each other and would enjoy a positive sum game(Factor Endowment
Theory). These theories made the countries realise the importance of international trade: how to
gain from the international trade and how to produce the goods efficiently at home and buy those
which it cannot produce at home. But it was the time when some countries were enjoying the
positive sum game and some zero sum game. Then there was a focus on positive sum game
afterwards.
At international level many organisations were established for the purpose of favourable trade like
UNCTAD, GATT etc. but were not successful as most of the big nations enjoyed the element of
monopoly and favouritism. Least developed countries suffered a lot and were being exploited in
the hands of favourable nations. It pressurised the countries to set up their own trade policies (that
act as the road map for the progress and prosperity) and to trigger in international trade and to
cooperate at international level with other countries to derive benefit. It resulted in the formation
of the trading blocks to increase the trading share between the countries. One of the most important
developments at the international level was the setting up of WTO which played and is still playing
a great role in the enhancement of international trade by acting as a watchdog for the member
countries.
Before independence foreign trade of India was not being carried on the legalised procedures and
was not well regulated. India’s foreign trade has shown vast fluctuations over the time as foreign
policies were not well developed. In India Delhi was the main trading centre. Due the availability
of river routes that facilitated the trade at an enormous rate and that time India was the main
exporter of the Carpets, ducks, spices, dry fruits etc. These goods were getting exported with the
help of Arab traders who in turn used to ship them to European countries. Both local and foreign
merchants were the main players in the trade.Before colonialism the trade was progressing on the
right path during the Mughal period, but got declined due to the fall of Mughals, as it was the time
when British overtook India. During Mughal period more and more trade brought gold and silver
in the country which were considered as the mainstays of the nation. But during the British period
concentration of power in the hands of British brought the major changes in taxation, agricultural
policies which resulted in decline in the agricultural production, destitution of farmers finally the
famine.
Throughout history we have seen high tariff rates in India when compared to the other countries
due to which it is seen as a protectionist country. Government has been focusing on moving
towards the prosperous economy by creating more and more manufacturing capacities to be self-
sufficient. For that reason the country has set up foreign trade policies time by time to enhance the
foreign trade and to get benefit from it and to assist, regulate trade in the benefit of the economy.
India in recent years has strived hard to protect its producers and benefit the customers which is
revealed by the(FTP 2004-09) i.e. countries should export more and /kl’;’more than imports and
should import only those items which are critical from the development point of view. Greater
fluctuations have been found in India’s exports and imports like: the exports of India average at
4903.46mn$ from the period of 1957 to 2017 which was high in the year 2013 i.e.305411.44mn$
and the low in the year 1958 i.e. 59.01mn$ while as imports averaged at 7131.31mn$ from 1957
to 2017, which was high in the year 2011 i.e. 45281.90mn$ and least in the year 1958 i.e.
117.40mn$ (Tradingeconomics.com). India has followed the strategy of LPG which has benefited
a lot, even the economic level of the people has increased and people have shown changing
consumption patterns as before.
Globalisation has brought the world under one umbrella and it is not possible to isolate domestic
market from the international market. It has also linked the countries through creative and
innovative ideas.
Availability of goods across the nations have seen a rise in trade with other countries so India.
Among the developing nations, India has emerged a prominent player and economic reforms have
shown their positive consequences of increasing trade. India’s trade has shown remarkable
progress throughout. India has benefited a lot from the countries and so others from it. India has
also realised the importance of factor endowments and what big difference they could make. The
coming years for India are the days of happiness, progress and prosperity. India has always tried
to emphasize on export growth strategy and will show it vigorously. India is also expecting to
double its share in the coming years which will in turn create more and more employment
opportunities. Being the availability of the resources in the country it is said that India will be the
leading exporters throughout the globe in the coming years.
FOREIGN TRADE:
In the past two decades the most dramatic and significant world trend has been the rapid growth
of international business. World has become the one international market. Financial markets have
shown more growth at the international level. Countries across the world have already gained from
international trade like the USA, Japan, Germany, France etc. Flow of labour, technology, capital
has tied the economies together.
Foreign trade is one the main components for any country to develop. Without this prosperity and
progress, economic well-being of the nation is not possible. Foreign trade has remained the main
concern for all the nations across the globe or any business activity across the national boundaries.
Foreign Trade is simply the trade between the countries or among the countries with a view to gain
from it. It involves the exchange of goods between the countries i.e. exporting and importing. By
export we mean outflow of the goods and services from the country and import means inflow of
the goods and services in the country.
According to Wasserman and Halt man, “International trade consists of transactions between
residents of different countries”.
Every country wants to raise the well-being of its citizens by creating employment, offering
quality goods etc. But it is not possible for the country to satisfy the all needs of the people which
they have because every country has limited resources. To exploit this opportunity countries resort
to international trade for the transfer and proper utilisation of the resources.India also embarked
on the foreign trade after realising its importance and how various countries have already benefited
from that. For the purpose of enhancing the international trade, India has set up Exim policy with
an aim to: to facilitate more exports, to attain maximum share of global trade, to stimulate
economic growth, to enhance technological efficiency, to offer good quality products to customers,
generate employment opportunities etc. To increase the number of exports, countries took several
measures for it like: Subsidies, duty exemptions, tariff exemptions, remove quantitative
restrictions etc. Apart from this India has initiated many progressive steps towards the trade time
by time. By the time India has shown great progress in terms of foreign trade.
Why foreign trade?
There are a number of reasons why countries resort to foreign trade. Some of them are discussed
as below:
1. World Peace: International trade facilitates the transfer of technology, capital, and labour
across the nations mainly from developed countries to less developed countries with a view to gain
from the trade. Because international trade countries come close to each other and develop healthy
relations with each other which results in the development of peace among the nations. Countries
are striving for a congenial atmosphere to progress and prosper which is possible only through
international trade.
2. Goodwill and Reputation: Every country wants to have an international reputation and
goodwill like japan, Germany etc. have; that comes only through international trade. Countries
which are exporting quality oriented goods to other countries have achieved much reputation at
global level. Because of it most of the companies have started thinking of TQM etc.
3. Balance of payments: Balance of Payment shows the trade and the financial position with the
rest of the world. Every country wants to have a favourable BOP which is possible by resorting to
international trade. Every country depends on imports for various purposes so also resort to exports
for favourableness. Deficit in BOP also gets reduced.
4. Economic development: All the nations across the globe are striving to enhance the economic
growth. International trade facilitates transfer of technology, capital etc. with the help of which
countries utilise their resources judiciously. To generate the growth in the various sectors of the
nation like industry, agriculture foreign trade is critical. Not only this, it also facilitates the
disseminating of the knowledge from developed to underdeveloped countries.
5. Standard of living: Nations have tried to raise the standard of living of the, create employment
opportunities in favour of the public. Due to globalisation consumers get the products cheap,
quality oriented, vast choices etc. with the help of international trade consumers can taste the
creative and innovative ideas which results in their well-being.
6. Revenue: By simplifying the procedures and to enhancing the competitiveness among
economies to make them more vibrant generates the revenue for the countries. More trade
facilitation would lead to flow of money on both sides.
7. Imports and Natural calamities: Country like India heavily depends on imports for various
core products without whom the life will come to halt like petroleum products, if not available will
retard the growth.During natural calamities we face the scarcity of the goods which we could be
made available only through international trade.
8. Market Scope: The companies who operate at domestic as well as international market enjoy
the economies of scale. Their market scope increases domestically as well as internationally. As
they have elastic demand in both the markets, and their mass production increases results in
decrease of cost and prices of products.
9. Judicious use of resources: Every country has resources and wants them to utilise properly for
the nation’s well-being. International trade facilitates the optimum utilisation of resources as far
as possible. A country which has specialisation in any particular good utilise it judiciously and
makes it available in the market These above mentioned factors pressurise the nations across the
globe to resort to international trade and to gain from this as much as possible. Foreign trade has
taken an important place in every country’s heart.

OBJECTIVES:
● Foreign trade in india and other partner countries
● To study the changes in value of trade since independence
● To understand the largest trading partner for india for ten years
 ● To identify the effect of recession on foreign trade
Need for study:
A study on performance analysis of foreign trade is done to determine the performance of foreign
trade in India and other partner countries.
Foreign trade is one the main components for any country to develop. It involves the exchange of
goods between the countries i.e. exporting and importing. By export we mean outflow of the goods
and services from the country and import means inflow of the goods and services in the country.
So it was made to undertake the study to know the performance of foreign trade at what extent the
foreign trade is involved in India and other countries globally. This will help us to know the extent
India has benefitted from the international trade.Information will be presented through tables and
charts, followed by the interpretation and discussion.
Scope of the study:
The scope the study pervades the data collected regarding imports and exports of india and other
international trade i.e. foreign trade.The study helps to understand the effect of recession on foreign
trade and the changes made in foreign trade till now.The study took place in india.
Research methodology:
Research is the plan structure and strategy for investigation convinced to answer research questions
and control variance. It is the overall operation pattern to frame work of a project that stipulated
the information to be collected from which sources by word procedure.the main sources of data
for securing the above mentioned information in the secondary data.
Research design:The study undertaken to access the information about exports and imports in
india.
Research procedure: the questionnaire designed for the study is structured and disguised in nature
it consists of multiple choice and short questions.
Data: information required for the project is primary data as well as secondary data. The
information was collected by survey method with the help of a questionnaire by meeting various
people involved in imports and exports in india.
The secondary data is collected from the journals,magazines,websites and books.
Sources of data:
A classification of data is very important procedure in this concept the collected data can be
classified into two types
 1) Primary data
2) Secondary data
Primary data:this data can be collected in various methods like survey and interviewing etc. for
collection of primary data the survey method which involved predetermined questions
Secondary data:collection of secondary data is very easy compared with primary data. This data
can be collected from magazines, books,websites and journals.

LIMITATIONS:
Secondary data compiled from different sources and even from the same source, in certain contexts
slightly vary.It is difficult to get foreign trade in depth information.Best possible effort has been
made in presentation to ensure clarity and ease with which data can be utilised for interpretation.
Inconsistency in a few cases is due to non-reconcilability of data as presented in different
publications. Data collected from publications, annual reports, and journals of export promotion
councils also present commodity movements to specific countries and groups of countries in
different regions.
REVIEW OF LITERATURE:

S.J. Patel (1959)2 made a pioneering attempt to analyse the long term trends in India’s foreign
trade. He examined the stagnancy of India’s exports over years, and explained it in terms of
stagnant and declining world demand for Indian exports. India's trade with the socialist countries
of Eastern Europe has been perhaps the most dynamic sector of India's foreign trade during the
1960s. Payment arrangements under trade for its imports from East European countries were in
nonconvertible rupees. The effectiveness of these arrangements has been analysed by many
scholars such as Surender Dave, Sunanda Sen Sumitra Chisti and Asha Datar .

Anne Kruger (1961) and B. Cohen (1964) felt that stagnation of India's exports has been more
due to higher domestic production costs and rising domestic demand leading to higher relative
prices of exports in the world market.

A. Kruegar (1961) maintains that the observed stagnation in the Indian export behaviour can be
more than adequately explained by policies of the Government of India and the Planning
Commission combined with internal demand and supply factors.
A study conducted by the Indian Institute of Foreign Trade (1966)15 shows that the export and
import prices were quoted at international rates, and that the terms of trade were usually in favour
of India.

Bhagwati and Desai (1970)17 attributed stagnation in India’s exports to domestic policies. They
failed to notice the probability that an oligopoly market may sometimes involve a reduction in the
market share of the leading producers due to the new marginal entrants. He attributed improvement
in India's exports in the early 1960s to (a) a major increase in exports to Soviet bloc countries, (b)
export subsidisation, (c) the inclusion of Goa's foreign trade, and (d) increase in the overland
exports to Nepal. They opined that export growth could be achieved only at a relatively higher
opportunity cost.

Bown and Crowley (2003) suggested that anti-dumping measures may be a defensive response.
They reveal that trade deflection may be one of the pathways through which anti-dumping duties
are multiplying.

Dr. Saikat Sinha Rov in his Ph.D thesis titled “factors in the determination of india’s exports”
submitted to the jawaharlal nehru university, new delhi,february 2014 has analyzed the factors
under study to obtain an understanding of the pattern of export growth, the associated changes in
export structure, and the international competitiveness of exports during this period. This has
helped to identify supply and demand factors explaining long term export performance, both at
aggregate and disaggregate levels. Specifically, demand and supply scale factors have been
considered as important as relative price effects. An explanation for the post-reforms export
growth in terms of these effects has provided the proof of robustness of the demand-supply model
estimates. A liberal policy regime relaxes the constraints operating on exports. The relationship
between development strategy and export performance, however, holds good only under certain
restrictive conditions. The contrary view holds that outward orientation does not necessarily lead
to better export performance since the economy often faces deteriorating terms of trade. This
alternative view maintains that developing country exports are driven by external market
conditions. These divergent views have been incorporated in this study for a better understanding
of India's export behaviour