India’s Foreign Trade Under Plan Periods

International Trade is an engine of growth of an economy. Trade is just not a transfer/exchange of goods and services, but it is more than it. So, when we date back to the history of trade, there we can see its been long back people started to travel and trade with various countries. Here, the study focuses on the India’s Trade during plan periods, especially under five year plan. Through this research work, it tries to study and evaluate the India’s foreign trade and its value, composition and direction.


Introduction
Indian foreign trade has very long history. Before independence, Indian economy was typical of were mainly confined to Britain and other common wealth countries. Export consisted chiefly of raw materials and plantation crops while other manufactures. Over the last 71 years, India's foreign trade has undergone a complete change both in regard to the composition as well as the direction of trade. India's exports before independence, comprised primarily of three commodities, namely tea, jute and cotton textiles. At these constituted about half of the total exports from the country. Some of the other items exported were primarily products, like manganese ore, shellac, rawhides and skins. Only about 4% of the exports consisted of engineering goods. So far as direction of trade was concerned UK & USA accounted for about 40% of the export. The share of other countries was rather small trade with east European countries was negligible.
After independence Indian foreign trade had changed drastically in all its dimensions value, composition and direction till 1990-91 i.e. during pre-reform period particularly after 1990s much progress was witnessed by Indian foreign trade can be observed from the given discussion of the trends in value of foreign trade, composition and direction.
Foreign trade plays a vital role in the Indian economy. As the country need to import diverse products so foreign trade is extremely important to country. India exports vast number of products and also imports an equal amount of economy, it tariffs continue to be high when compared with other countries, and its investment norms are still restrictive. This leads some to see India as a "rapid globalize" while others still see it as a "highly protectionist" economy.
Foreign trade is exchange of capital, goods, and services across international borders or territories. In most countries, it represents a significant share of gross domestic products (GDP). Generally no country is self-sufficient. It has to depend upon other countries for importing the goods which are either non-available with it or are available in insufficient quantities. Similarly, it can export goods, which are in excess quantity with it and are in high demand outsides. Foreign trade involves different currencies of different countries and is regulated by laws, rules, and regulations of the concerned countries.
Foreign trade in India includes all imports and from India. At the level of central government it is administered by the ministry of commerce and industry. Prior to the 1991 economic liberalization, India was a closed economy due to the average tariffs exceeding 200 percent and the extensive quantitative restrictions on imports. Foreign investment was strictly restricted to only allow Indian ownership of businesses. Since the liberalization, India's economy has improved mainly due to increased foreign trade.
The origin of India's foreign trade can be traced back to the age of the Indus valley civilization. But the growth of foreign trade gained momentum during that period, India was a supplier of food stuffs and raw materials to England and an importer of manufactured goods. However, organized attempts to promote foreign trade were made only after independence, particularly with the onset of economic planning. Indian economic planning completed five decades. During this period, the value, composition, and direction of India's foreign trade have undergone significant changes in early 1990s the Indian economy had witnessed dramatic policy changes. The idea behind the new economic model known as liberalization, privatization and globalization in India (LPG), was to make the Indian economy one of the fastest growing economies in the world. An array of reforms was initiated with regard to industrial, trade and social sector to make the economy more competitive. Earlier India was afraid of global companies and facilitated government to ensure high tariff barriers. But now the scenario is changing and the holistic angle. India has been an important trading nation since ancient times. But the restrictive policies of commodity production, trade and tariff pursed by the colonial government adversely affected the structure, composition and volume of India's foreign trade. Foreign trade as worked as an engine of growth in the past and even in more recent times.

Objectives of the Study
• To analyze the composition of India's foreign trade. • To identify the direction of India's foreign trade.

Methodology
The present study is an attempt to understand India's foreign trade under plan. The study focuses on value, composition and direction of India's foreign trade. The study is primarily based on secondary data only. For this analysis, I have taken the data from 1950-51 to 1917-18. I couldn't include the latest data. There, I have used correlation to analyze the relationship between export and import.

Review of Literature
Foreign trade sector is an important sector of an open economy; different writers have dealt with the varied aspects of foreign trade for the economy of the country. Foreign trade not only can affect the resources and output base of an economy, but also its technological capabilities.
B.N.Ganguli (1956) books provides an extremely valuable account of evolution of economic development in the Asian and pacific countries in the past century and of India's economic relations with them. This is one of the important works with regard to India's economic relations with the Asian countries.
S.J.Patel (1959) made a pioneering attempt to analyses 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 stagnancy 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 1960s. Payment arrangements has been analyzed by many scholars such as surrender Dave, Sunandasen, Sumithachisti and Ashadatar. Singer (1957Singer ( ), myrdal (1961Singer ( ), and prebirch (1962, have argued that international trade if left to market forces leads to deterioration in terms of demand transfer income from the poor nations, and a slower rate of growth of the former. Bhagwati and Desai (1970) 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.
The Reserve Bank of India (1974) study reveals that the growth in India's trade with the soviet bloc has been a natural one, and not at the expense of trade with convertible currency. E.N. Komarv (1975) observed that for more than 20 years Indian firms have business relations with the Russian trade organization; and the cooperation of the Soviet Union and India has very favorable prospects for development. This is guaranteed by the common position shared by both the countries in regard to vital international issues, their mutual interest in strengthening and expanding soviet economic ties with India which has become traditional.
The Seminar of the Indian Institute of Foreign Trade (1977) provides the analysis of the total trade that India had with the socialist countries especially with the USSR over the last two decades .the seminar emphasized that Indian exporters interested in promoting stable markets for their products in the east European countries including the USSR. The ultimate marketing success will depend on how best Indian exporting community can make effective use of marketing facilities provides to foreign exporters in the socialist countries of east Europe. Modi (1984) had mentioned that bilateral trade between India and Pakistan should be liberalized in a manner that it does not jeopardize the interest of either country, and that both could import from and export to each other as many commodities as possible, and thus reduce dependence on developed countries.
Vijay Singh and Madanlal (1985) expressed that south Asian economic cooperation can enable the countries of the region to achieve the economies of scale, better specialization opportunities, improved efficiency through increased competitions, less instability of external earnings and improvement in the bargaining position of the countries involved .
Chandra Sekhara Rao and D.K.R. Sharma (1986) in their paper reviewed the marketing record of industrial and developing countries of south Asia, by analyzing the origin of their collective imports. They have studied the marketing experience of constituent countries of this region through an analysis of intraregional trade, and finally they examined India's experience with this region, particularly in the case of export of machinery and transport equipment. Saxena and Chawla (1986) felt that there may be keen competitiveness in the arena of trade, and that there is scope for the expansion of intra-regional trade in the SAARC region; more specifically, in certain commodities, which are being exported by some of these countries. They emphasized that economic cooperation among the SAARC member has to be utilized for converting competitive values into complementarity features.
Kletzer and Bardhan (1987), show that countries with relatively well developed financial sector have a comparative advantage in industries that depend on external finance. They revealed that even when technology and endowments are identical between the countries of scale are absent, credit market frictions lead to one country facing a higher interest rate or rationed credit compared to other countries. This may lead to differences in comparative advantages in processed goods which require more sophisticated manufactured finished goods require more finance to cover selling and distributing costs than primary or intermediate goods Vinodapte (1987) appreciated the efforts of the leaders of the south Asian countries in establishing SAARC, despite so many heterogeneous characteristic of the groups. He also mentioned that SAARC is the world's youngest but the most populous regional grouping accounting for one -fifth of the world population's .in his report, he has also stated the objectives with which the SAARC was formed.
V.Chandra Sekhara Rao (1988) study focused on India's trade relations with the organisation of petroleum exporting countries (OPEC). He analysed the trends in OPECs external trade, and studied India's trade relations with OPEC as a whole, and with selected significant countries. He has also analysed the structural changes that have taken place in the commodity composition of India's exports to and imports from OPEC.
Varshney and Rajkumar (1988) opine that political and economic cooperation among the SAARC member countries will not only make the south Asian region a political and economic power in the world but also help in bringing economic prosperity to the member countries. They go to the extent of saying that economic cooperation is the road to political harmony and unity.
Hari Govind Singh (1988) analyses the main problem involved in the regional trade is the nature of size, population, resource-base, potential for economic growth, military strength, and viability of the constitution and political system. In addition, countries of the region have deliberately adopted a restrictive import policy to promote import substitution as it is easier to restrict imports than to promote export Uma Rani (1993)investigate the impact of exchange rate volatility on trade flows in India during the period January 1975 to December 1988. The study concludes that India's bilateral imports exports have, in most of the cases, been adversely affected by the volatile nature of exchange rate.
Fanelli Medhora (2002), reveal that the competitiveness of a country depends both on the price and non-price factors. For improving the price competitiveness, devaluation can prove helpful in the short run. However, the price competitiveness can be induced in Industries by enhancing the level of productivity. Bown and Crowley (2003) suggested that antidumping measure may be a defensive response. They reveal that trade deflection may be one of the pathways through which anti-dumping duties are multiplying.
Konings and Vandenbussche (2004) provided empirical evidence that temporary anti-dumping protection on an average raises the productivity growth of domestic import-competing firms ,and that trade policy under certain conditions can induce technological catching up.
Vijaya Katti (2005) point out that for India to become a major player in world trade , an all-encompassing and comprehensive view need to be taken for the overall development of the country's foreign trade . The EXIM policy was renamed as the new foreign trade policy was built around two major objectives.
Syamala Gopinath (2006) tries to analyse how the regulatory environment has evolved in the Indian foreign exchange market. According to her, the main objectives of markets including foreign exchange markets should be to support economic activity and raise the potential for economic growth.
Yazid and Muda (2006) studied the usage pattern of exchange management strategies in multinational corporations. They found that multinationals are involved in foreign exchange risk management primarily because they sought to minimise operational overall cash flows, which are affected by currency volatility.
J.N. Bhagwati and A. Krueger in their comparative analysis of the impact of foreign trade regimes and economic development in a number of countries, defined a set of analytical phases with reference to the EXIM policy of a country. These phases in the foreign trade regime were designed essentially as a descriptive device to capture meaningfully the evolution of foreign trade regime in terms of its restrictions content and the dimensions and pattern of its use of control and price instruments.

Direction of India's Trade
The direction of trade is referred to describe the statistical analysis of the set of a country's trading partners and their significant in trade. In short, the set of countries where the goods are traded to their significance on a country's trade is known as the direction of trade. The study is trying to find out the relationship between value of import and export. It based on secondary data for the period of 1950-2018 By using correlation method.

Figure 1: Value of Imports and Exports
From the figure show that the value of India's foreign trade, on the eve of planning , the foreign trade of India showed and excess of import over export. Cumulative value of export for 2017-18 was $302840 million as against $275852 million &cumulative value of imports for the period 2017-18 was US$459670 million as against US $384356 million.  In this figure, it shows that, imports of the country have been divided in to food and allied products, petrolium and oil lubricants, capital goods, pearls&semiprecious stones, electronic goods fertilizers. The import of food and allied products has declined sharply in the initial years but again start increasing for the next year. Import of fertilizers &pearls and semi precious stones are declined considerably. And import of electronic goods are increasing in each year.

Figure 4: Direction of India's Export and Import (% of Total)
It reveals the direction of trade, in the case of import: the importance of OECD as a group has decline considerably over the period 1960-61 to 2005-06 and the share of OPEC increased considerably over time. In the case of export: OECD group account for a major portion of India's export. The share of this group in 1960-61 was 66.1% and in 2005-06 was 44.2%.

Summary and Conclusion
There is a Positive relation between value of export and import in India. Here the study show that the value of India's foreign trade, on the eve of planning , having an excess of import over export. The Import of food and allied products has declined sharply in the initial year but again start increasing for the next year. The major export items in 1970-71 were agriculture and allied products were 31.7% of total export earnings. The importance of the OECD as group has declined considerably over the period of 1960-61 to 2005-06 and the share of OPEC increased considerably over time. In the case of export; the OECD group has accounted for a major portion of India's exports. The share of this group was 66.1 % in 1960-61and it was 44.2% in 2005-06.
During the evolution five year planning, India's export trade has registered an increase of 97.5% and import by 170% in 1950-60. The increase in export was six times and imports by five times in 1999-2000 i.e. hundred year of India's foreign trade deficit have increased significantly over the years. India is significantly more integrated with the global economy gap in the years ago Foreign trade today plays an important role in the Indian economy. The programmes subjects 'Make in India','Digital India'and 'Skills India' will provide a framework for increasing exports of goods and services as well as generation of employment and increase the additional value to country. The FTP for 2015/2020 is encouraging the export of labor intensive products,