India’s Trade Balance
We can make out easily that India’s Trade Balance was negative when we got Independence. In 1949-50, India’s exports were worth Rs. 485 Crore and the imports were worth Rs. 617 Crore. So, we started with a negative trade balance of Rs. 132 Crore. During the first plan period, the imports and exports were as follows:
This table shows that there is a continuous negative balance of Trade from India’s independence till the first years of 1970s.
However, In 1970’s India saw two years viz. 1972-73 & 1976-77, in which she had a favorable trade Balance.
These two financial years are the only two financial years in the history of Post independence India, in which we had a favorable trade balance.
After that, the Trade as well as negative Trade Balance increased, post liberalization Era.
Post liberalization, the devaluation of Rupee and convertibility of Indian Rupee in current account tried to create a favouarble environment, this was evident in the year 1993-94 and 1995-96, but in the subsequent years, the trade deficit increased.
However, in recent years, India’s merchandise export has shown a remarkable growth, except for the period of financial slowdown.[table “2” not found /]
For 2008-09, a target of US$ 200 Billion was fixed, which was later revised downward to US $ 175 billion because of global slowdown in the second half of the 2008-09. Due to the uncertain global scenario, the Government of India did not fix a target for 2009-10, but the Foreign Trade Policy 2009-14, had set the objective of an annual 15% growth in export target and US$ 200 Billion export by March 2011.