Class 12 : Grography (English) – Lesson 16.International Trade
EXPLANATION & SUMMARY
🔷 Detailed Explanation
🔵 Meaning of International Trade:
International trade is the exchange of goods, services, and capital across international borders or territories.
It helps countries to utilize their comparative advantages and fulfill needs they cannot meet domestically.
🟢 Importance of International Trade:
1️⃣ Economic Growth:
It increases national income and accelerates economic development.
2️⃣ Employment Generation:
Trade-related industries and services provide jobs to millions.
3️⃣ Exchange of Technology:
Helps transfer of modern technology, knowledge, and innovation.
4️⃣ Foreign Exchange Earnings:
Exports bring foreign currency that strengthens the economy.
5️⃣ Global Relations:
Promotes international cooperation and peaceful relations.
6️⃣ Utilization of Resources:
Enables countries to use their natural resources efficiently.
7️⃣ Improved Standard of Living:
Imports of goods and services enhance consumer choices.
🟡 Types of International Trade:
🔹 Bilateral Trade:
Trade between two countries (e.g., India and Nepal).
🔹 Multilateral Trade:
Trade among many countries under organizations like WTO.
🔴 India’s Foreign Trade Composition:
💠 Exports:
Agriculture products: Tea, coffee, rice, spices
Manufactured goods: Engineering goods, textiles, gems, and jewellery
Services: IT, software, consultancy
💠 Imports:
Crude oil and petroleum products
Machinery, gold, fertilizers
Electronic goods and chemicals
🟠 Major Trading Partners of India:
✔️ USA
✔️ UAE
✔️ China
✔️ Saudi Arabia
✔️ Singapore
✔️ Germany
💡 Balance of Trade:
➡️ Difference between the value of exports and imports.
✔️ Favourable: Exports > Imports
✔️ Unfavourable: Imports > Exports
India often faces an unfavourable balance due to high import of petroleum and machinery.
🔵 World Trade Organisation (WTO):
Established in 1995
Promotes free and fair trade among nations
Provides platform for trade negotiations
Settles trade disputes and enforces global trade rules
🟢 Factors Influencing International Trade:
1️⃣ Resource Distribution
2️⃣ Economic Development
3️⃣ Transport and Communication
4️⃣ Political Relations
5️⃣ Trade Policies and Tariffs
6️⃣ Technology Level
🧭 Ports as Gateways of International Trade:
🔹 Comprehensive Ports – Handle all types of cargo (e.g., Mumbai)
🔹 Specialised Ports – Handle specific goods (e.g., Oil ports at Kandla)
🔹 Naval Ports – Military purposes (e.g., Karwar)
Ports are classified by location:
✔️ Tidal Ports – Affected by tides (e.g., Kandla)
✔️ Non-Tidal Ports – Not affected by tides (e.g., Mumbai)
✏️ Problems in India’s Foreign Trade:
1️⃣ Unfavourable balance of trade
2️⃣ High dependency on petroleum imports
3️⃣ Global market fluctuations
4️⃣ Poor port infrastructure
5️⃣ Non-tariff barriers and trade restrictions
🌟 Measures to Improve India’s Trade:
✔️ Diversify exports
✔️ Promote value-added products
✔️ Improve port & transport infrastructure
✔️ Encourage export-oriented industries
✔️ Strengthen trade relations and agreements
🧠 Summary:
International trade = lifeline of global economy.
India trades with over 200 countries.
Services sector now contributes majorly to exports.
WTO ensures global trade is fair and rule-based.
Ports, transport, and policy reforms are key to trade growth.
📝 Quick Recap:
🔹 International trade = exchange of goods/services between nations
🔹 Types = Bilateral, Multilateral
🔹 India exports engineering goods, imports crude oil
🔹 WTO = promotes free trade
🔹 Trade balance = exports – imports
🔹 Ports = gateways for trade
🔹 Challenges = infrastructure, imbalance, global competition
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QUESTIONS FROM TEXTBOOK
🔵 Question 1 (i):
Trade between two countries is termed as:
1️⃣ Internal trade
2️⃣ External trade
3️⃣ International trade
4️⃣ Local trade
🟢 Answer: 3️⃣ International trade
🔵 Question 1 (ii):
Which one of the following is a land-locked harbour?
1️⃣ Vishakhapatnam
2️⃣ Mumbai
3️⃣ Ennore
4️⃣ Haldia
🟢 Answer: 1️⃣ Vishakhapatnam
🔵 Question 1 (iii):
Most of India’s foreign trade is carried through:
1️⃣ Land and sea
2️⃣ Sea and air
3️⃣ Land and air
4️⃣ Sea
🟢 Answer: 4️⃣ Sea
🔷 Question 2 (i):
Mention the characteristics of India’s foreign trade.
🟢 Answer:
✔️ India’s foreign trade is both multilateral and diversified.
✔️ It includes exports of manufactured goods and imports of petroleum, machinery, and chemicals.
✔️ Trade is mainly carried through sea routes.
✔️ India trades with over 200 countries across the world.
✔️ It faces a negative balance of trade due to higher imports.
🔷 Question 2 (ii):
Distinguish between port and harbour.
🟢 Answer:
✔️ A Port is a point where ships load and unload cargo and passengers.
✔️ A Harbour is a sheltered water body where ships anchor safely.
✔️ All ports have harbours, but all harbours are not ports.
✔️ Example: Mumbai Port is located in a natural harbour.
🔷 Question 2 (iii):
Explain the meaning of hinterland.
🟢 Answer:
✔️ Hinterland is the area served by a port for import and export activities.
✔️ It connects ports with production and consumption centres through transport.
✔️ A large hinterland increases the importance of a port.
🔷 Question 2 (iv):
Name important items which India imports from different countries.
🟢 Answer:
✔️ Crude oil and petroleum products
✔️ Machinery and electronic goods
✔️ Gold and precious stones
✔️ Fertilizers and chemicals
✔️ Iron and steel
🔷 Question 2 (v):
Name the ports of India located on the east coast.
🟢 Answer:
✔️ Kolkata Port
✔️ Paradip Port
✔️ Vishakhapatnam Port
✔️ Chennai Port
✔️ Ennore Port
🔶 Question 3 (i):
Describe the composition of export and import trade of India.
🟢 Answer:
✅ Exports:
Agriculture: tea, coffee, rice, spices
Manufactured goods: textiles, engineering goods, gems & jewellery
Services: IT, consultancy
✅ Imports:
Petroleum and crude oil
Machinery and electronics
Gold and silver
Fertilizers and chemicals
India’s trade has shifted from agriculture to manufactured goods and services, reflecting economic diversification.
🔶 Question 3 (ii):
Write a note on the changing nature of the international trade of India.
🟢 Answer:
✔️ India’s trade has diversified from agriculture to manufacturing and services.
✔️ Export destinations shifted from UK and USA to Asian countries like UAE, China, and Singapore.
✔️ Share of engineering goods and software increased.
✔️ Imports now focus on crude oil, electronics, and machinery.
✔️ India now participates in global trade organizations like WTO and FTA agreements.
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OTHER IMPORTANT QUESTIONS FOR EXAMS
🔷 Section A – MCQs (1 mark each)
🔵 Question 1:
Trade between two countries is termed as:
🔴 1️⃣ Internal trade
🟢 2️⃣ External trade
🟡 3️⃣ International trade
🔵 4️⃣ Local trade
🟢 Answer: 3️⃣ International trade
🔵 Question 2:
Which organisation regulates global trade?
🔴 1️⃣ IMF
🟢 2️⃣ WTO
🟡 3️⃣ UNESCO
🔵 4️⃣ WHO
🟢 Answer: 2️⃣ WTO
🔵 Question 3:
Which port is called the “Gateway of India”?
🔴 1️⃣ Kandla
🟢 2️⃣ Mumbai
🟡 3️⃣ Chennai
🔵 4️⃣ Cochin
🟢 Answer: 2️⃣ Mumbai
🔵 Question 4:
Which item occupies the largest share in India’s imports?
🔴 1️⃣ Machinery
🟢 2️⃣ Gold
🟡 3️⃣ Crude oil
🔵 4️⃣ Iron ore
🟢 Answer: 3️⃣ Crude oil
🔵 Question 5:
Which item occupies the largest share in India’s exports?
🔴 1️⃣ Agricultural goods
🟢 2️⃣ Engineering goods
🟡 3️⃣ Raw materials
🔵 4️⃣ Minerals
🟢 Answer: 2️⃣ Engineering goods
🔵 Question 6:
Which term is used when exports exceed imports?
🔴 1️⃣ Unfavourable balance
🟢 2️⃣ Favourable balance
🟡 3️⃣ Balance of payments
🔵 4️⃣ Trade deficit
🟢 Answer: 2️⃣ Favourable balance
🔵 Question 7:
Which term is used when imports exceed exports?
🔴 1️⃣ Favourable balance
🟢 2️⃣ Unfavourable balance
🟡 3️⃣ Trade surplus
🔵 4️⃣ Equal balance
🟢 Answer: 2️⃣ Unfavourable balance
🔵 Question 8:
Which is the main mode for India’s foreign trade?
🔴 1️⃣ Air transport
🟢 2️⃣ Sea transport
🟡 3️⃣ Land transport
🔵 4️⃣ Pipelines
🟢 Answer: 2️⃣ Sea transport
🔵 Question 9:
Which country is India’s largest trading partner?
🔴 1️⃣ USA
🟢 2️⃣ China
🟡 3️⃣ UAE
🔵 4️⃣ Japan
🟢 Answer: 1️⃣ USA
🔵 Question 10:
Which one of the following is not a visible trade item?
🔴 1️⃣ Iron
🟢 2️⃣ Machinery
🟡 3️⃣ Tourism
🔵 4️⃣ Textile
🟢 Answer: 3️⃣ Tourism
🔵 Question 11:
Which organisation replaced GATT in 1995?
🔴 1️⃣ WTO
🟢 2️⃣ IMF
🟡 3️⃣ UNO
🔵 4️⃣ WHO
🟢 Answer: 1️⃣ WTO
🔵 Question 12:
Which one of the following ports is located on the east coast?
🔴 1️⃣ Kandla
🟢 2️⃣ Chennai
🟡 3️⃣ Mumbai
🔵 4️⃣ Cochin
🟢 Answer: 2️⃣ Chennai
🔵 Question 13:
Which one of the following is India’s major service export?
🔴 1️⃣ Tourism
🟢 2️⃣ Software
🟡 3️⃣ Shipping
🔵 4️⃣ Education
🟢 Answer: 2️⃣ Software
🔵 Question 14:
Which sector contributes the most to India’s exports?
🔴 1️⃣ Agriculture
🟢 2️⃣ Services
🟡 3️⃣ Raw materials
🔵 4️⃣ Minerals
🟢 Answer: 2️⃣ Services
🔵 Question 15:
Which port handles maximum foreign trade in India?
🔴 1️⃣ Chennai
🟢 2️⃣ Mumbai
🟡 3️⃣ Kolkata
🔵 4️⃣ Kandla
🟢 Answer: 2️⃣ Mumbai
🔵 Question 16:
Which one of the following countries supplies crude oil to India?
🔴 1️⃣ Japan
🟢 2️⃣ Saudi Arabia
🟡 3️⃣ Nepal
🔵 4️⃣ Bangladesh
🟢 Answer: 2️⃣ Saudi Arabia
🔵 Question 17:
Which term refers to trade among many countries?
🔴 1️⃣ Bilateral trade
🟢 2️⃣ Multilateral trade
🟡 3️⃣ Unilateral trade
🔵 4️⃣ Regional trade
🟢 Answer: 2️⃣ Multilateral trade
🔷 Section B – Short Answer (3 marks each)
🔵 Question 18:
Define international trade and mention its importance.
🟢 Answer:
✔️ Definition: Exchange of goods, services, and capital between countries across borders.
✔️ Importance:
1️⃣ Promotes global interdependence
2️⃣ Increases foreign exchange earnings
3️⃣ Expands employment opportunities
🔵 Question 19:
Differentiate between visible and invisible trade with examples.
🟢 Answer:
✔️ Visible trade: Involves physical goods (e.g., exports of machinery).
✔️ Invisible trade: Involves services (e.g., tourism, banking, IT).
✔️ Both together form total external trade.
🔵 Question 20:
Mention any three characteristics of India’s foreign trade.
🟢 Answer:
1️⃣ Diversified in commodities and partners
2️⃣ Dominated by sea transport
3️⃣ High share of manufactured goods and services in exports
🔵 Question 21:
Name three major trading partners of India.
🟢 Answer:
✔️ USA
✔️ China
✔️ UAE
🔵 Question 22:
State three major items of India’s exports.
🟢 Answer:
✔️ Engineering goods
✔️ Petroleum products
✔️ Gems and jewellery
🔵 Question 23:
State three major items of India’s imports.
🟢 Answer:
✔️ Crude oil
✔️ Gold
✔️ Machinery and electronics
🔷 Section C – Long Answer Questions (5 marks each)
🔵 Question 24:
Describe the composition of India’s foreign trade.
🟢 Answer:
✨ 1️⃣ Exports:
Agricultural goods: Tea, coffee, rice, spices
Manufactured goods: Engineering goods, textiles, gems & jewellery
Services: IT, software, consultancy
✨ 2️⃣ Imports:
Crude oil and petroleum products
Machinery and electronics
Gold, fertilizers, and chemicals
✨ 3️⃣ Features:
Shift from primary to manufactured goods and services
Imports dominated by energy and machinery
Diversified partners across continents
✔️ Final Line: India’s trade reflects industrial growth, modernization, and global integration.
🔵 Question 25:
Discuss the major trading partners of India and their significance.
🟢 Answer:
✨ 1️⃣ Major partners:
USA: Major importer of Indian services and goods
UAE: Key market for petroleum and jewellery
China: Supplies machinery and electronics
Saudi Arabia: Major crude oil supplier
Singapore, Germany, UK: Trade in manufactured and engineering goods
✨ 2️⃣ Significance:
Promote economic cooperation
Supply essential imports like oil and technology
Expand export markets for Indian products
✔️ Final Line: India’s wide trading network ensures global interdependence and resilience.
🔵 Question 26:
Explain the problems of India’s foreign trade.
🟢 Answer:
1️⃣ Unfavourable Balance: Imports > Exports → Trade deficit
2️⃣ Dependence on few items: Petroleum, gold, and electronics dominate imports
3️⃣ Low value exports: Limited share of high-tech products
4️⃣ Infrastructure issues: Port congestion and high logistics cost
5️⃣ Global fluctuations: Changes in oil prices and currency rates affect trade
✔️ Final Line: Policy reforms, infrastructure development, and export diversification are needed.
🔵 Question 27:
Write a short note on India’s trade policy and measures for improvement.
🟢 Answer:
✨ Trade Policy Goals:
Boost exports
Reduce trade deficit
Integrate with global economy
✨ Measures:
✔️ Promotion of export-oriented industries
✔️ Development of SEZs (Special Economic Zones)
✔️ Improvement in port and transport infrastructure
✔️ Signing of Free Trade Agreements (FTAs)
✔️ Incentives for MSMEs and startups
✔️ Final Line: A liberal, technology-driven policy is helping India become a global trade hub.
🔵 Question 28:
Explain the role and functions of WTO in international trade.
🟢 Answer:
1️⃣ Establishment: Formed in 1995, replacing GATT.
2️⃣ Objectives: Promote free and fair trade, remove barriers, settle disputes.
3️⃣ Functions:
Ensures non-discriminatory trade
Acts as forum for negotiations
Settles trade disputes
Provides technical assistance to developing nations
4️⃣ Significance for India: Facilitates export growth and participation in global trade
✔️ Final Line: WTO plays a crucial role in establishing a transparent, rules-based trading system.
🔷 Section D – Map-Based Questions (5 marks each)
🔵 Question 29:
On the outline map of India, locate and label the following:
🟢 (a) Mumbai Port
🟢 (b) Chennai Port
🟢 (c) Kolkata Port
🟢 (d) Kandla Port
🟢 (e) Kochi Port
🟢 Answer:
Students will mark and label:
✔️ Mumbai Port – Western Coast (Maharashtra)
✔️ Chennai Port – East Coast (Tamil Nadu)
✔️ Kolkata Port – On River Hooghly
✔️ Kandla Port – Gujarat
✔️ Kochi Port – Kerala
🔵 Question 30:
On the outline map of the world, mark the major trading partners of India:
🟢 (a) USA
🟢 (b) China
🟢 (c) UAE
🟢 (d) Saudi Arabia
🟢 (e) Singapore
🟢 Answer:
Students should mark and label these countries on a world map.
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