Foreign trade refers to buying and selling of goods across the
border. Economic growth refers to increase in national income, per
capita income, improvement in standards of living of masses.
Foreign trade helps to remove certain obstacles in the path of
economic growth; like lack of capital goods and modern technology,
lack of essential inputs like oil, petrol, gas. Foreign trade is
significant for developed and developing countries.
Slide 5
In the words of Prof. Hicks,foreign trade accelerates the rate
of economic development of underdeveloped countries. Forign trade
provides better technology, expands the size of market and has made
easy availability of foreign goods. As a result income, output,
employment of the country increases. The basic factor behind the
progress of countries such as Singapore, Arab countries, Brazil,
Thailand, Japan, Korea, Taiwan, Hong Kong, etc is foreign
trade.
Slide 6
BENEFICIAL EFFECTS OF FOREIGN TRADE ON DEVELOPMENT
Slide 7
Foreign trade is a engine of growth. Foreign trade has the
following beneficial effects on development:- Expansion in the size
of market Technical progress Healthy competition Comparative
advantage Helps to check inflation Helps to face natural calamity
Helps to exploit natural resources
Slide 8
Creation of employment opportunities Promotes capital formation
Increase in national income Increase in standard of living Promotes
industrialization Important educational effects Cultural exchange
Good relations among different nations
Slide 9
HARMFUL EFFECTS OF FOREIGN TRADE ON DEVELOPMENT
Slide 10
International trade may have benefitted the economic
development of few countries to some extent but it has proved to be
hindrance in case of most of the underdeveloped counties. Its
harmful effects are:- Lopsided development Limited possibility of
gain 1) income elasticity 2) policy of protection 3)use of
synthetic goods
Slide 11
Dumping Bad effects on savings International demonstration
effects Deterioration in terms of trade Bad effect on domestic
employment Problem of unfavourable balance of payment Deficiency of
goods in domestic company Set back to domestic industry Increase in
corruption Over-interdependence
Slide 12
COMPOSITION INDIAS EXPORT AND IMPORT
Slide 13
C OMPOSITION OF EXPORTS Composition of Indias export
Agriculture and allied products Ores and minerals Manufactured
items Fuel and lubricants
Slide 14
A GRICULTURE AND ALLIED PRODUCTS 15% share in exports Top items
of agriculture exports include: Fish products Rice Oilcakes Fruits
and vegetables
Slide 15
O RES AND MINERALS 12.3% share in exports Manufactured goods
61.3% share in exports Includes Engineering goods Gems and
jewellery Chemical and allied products Ready made garments
Slide 16
M INERAL, FUELS AND LUBRICANTS 18.3% share in exports There
have been improvement in export of minerals, fuels and lubricant
both in terms of value and percentage.
Slide 17
C OMPOSITION OF IMPORTS Composition of Indias imports Petroleum
products Capital goods Pearls and precious stones Iron and
steel
Slide 18
Petroleum products 31.7% share in imports Capital goods 20.3 %
share in imports Pearls and precious stones 6.2 % share in imports
Iron and steel 2.4 % share in imports Fertilizers 2.4 % share in
imports
Slide 19
CONCLUSION
Slide 20
After studying both aspects of foreign trade on economic
development it can be concluded that foreign trade promotes
specialization, ensures optimum utilization of resources, food
supply, etc throughout the world. Developed countries are gaining
much benefits in comparison to the developing and under developing
countries. Benefits of foreign trade for under developed countries
can be enhanced if under developed countries engage in foreign
trade among themselves.
Slide 21
Composition of Indias foreign trade has undergone a positive
change. It is a remarkable achievement that India has transformed
itself from a predominately primary goods exporting country into
non primary exporting goods country. Under imports also Indias
dependence on food grains and capital goods has declined.