Q.Assess the role of international trade in Indian economy.

International trade lets India sell its surplus and buy what it needs. It earns foreign exchange, widens markets, brings in technology and essential imports, raises efficiency through competition and creates jobs — all of which have grown in importance since the 1991 opening of the economy, even though dependence on trade also brings risks.

Meaning

International trade is the import and export of goods and services between India and the rest of the world; India's exports include software, textiles, pharmaceuticals and engineering goods, while imports include crude oil, machinery and electronics.

Role of international trade

1. Foreign exchange earnings: Exports earn foreign currency needed to pay for imports.
2. Wider markets: Trade lets Indian producers sell beyond the home market, raising output and incomes.
3. Access to capital goods and technology: Imports of machinery and know-how modernise industry.
4. Essential imports: Oil, fertilisers and raw materials keep industry and agriculture running.
5. Efficiency and quality: Global competition pushes Indian firms to improve productivity and quality.
6. Employment and growth: Export industries such as IT and textiles create large employment and add to GDP. …