While dealing with composition (pattern) of our external trade, we are faced with some troublesome problems of data availability and compatibility. Over years, changing composition of foreign trade reflects a consequence of several things, such as:
(i) Changing composition of world economies leading to a material shift in the composition of their external trade;
(ii) Growth of the Indian economy leading to basic changes in our import needs on the one hand and export capacity on the other;
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(iii) An exponential development in transport, storage, financial, communications and other facilities across the globe;
(iv) A basic shift in the trade and investment policies of the trading countries including India;
(v) Commitments flowing from WTO obligations and steps taken by various countries in that direction;
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(vi) Trade flows generated by international flows of capital, technology and services.
On account of these developments, composition of merchandise trade of an economy (particularly of a developing country like India) remains in a state of continuous flux. Some existing items and sub-items keep vanishing from its trade flows with some new ones entering the trade flows and occupying various degrees of importance.
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By implication, classification of trade data of a country should also be frequently revised in line with changing facts and policy needs’. This has been done in India also, including a major revision for the figures for 1987-38 and later.
Some additional difficulties also crop up in having compatible and consistent trade data. They include the problems posed by the fact that trade transactions pass through several stages like finalising the deals, actual delivery of goods, and settlement of dues.
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Consequently, trade data collected with reference to different stages of trade transactions lack compatibility. Complications also arise on account of more than one agency collecting the data.
Normally, changing pattern of foreign trade of a country reflects the changing structure of its economy, hi our case, it does so only partially. This is because of extensive tariff and quantitative controls on both imports and exports.
Our imports, in particular, faced the above-mentioned restrictions, rigorous exchange control measures, canalisation through state agencies, and so on. Consequently, official policies exerted a heavy impact on the volume and composition of our imports
Due to revised classification of merchandise trade data, the same are presented here in two parts,
1) Data for-selected years from 1970-71 to 1986-87; and
2) Data for years 1987-88, 1989-90, 1991-92 and from 1993-94 to 2001-02.