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IB0015- Foreign Trade of India

DRIVE-Spring 2015


SUBJECT CODE & NAME-IB0015- Foreign Trade of India

BK ID-B1908


Q1. Discuss the Heckscher-Ohlin theory of international trade. 10

Answer: The Modern Theory of international trade has been advocated by Bertil Ohlin. Ohlin has drawn his ideas from Heckscher’s General Equilibrium Analysis. Hence it is also known as Heckscher Ohlin (HO) Model / Theorem / Theory. According to Bertil Ohlin, trade arises due to the differences in the relative prices of different


Q2. What is the role of services exports in recent years in India’s composition of trade? Discuss. (India and services trade) 10

Answer: Composition of Exports: The composition of exports shows a perceptible shift in this decade from light manufactures to heavy manufactures and petroleum crude and products. The share of textiles and ready-made garments (RMG) has fallen dramatically by 11.1 percentage points in 2006-07 over 2000-01 followed by gems and



Q3. Discuss the trends in the principal imports of India in the last 5 years. 10


Imports in India increased to 35740 USD Million in March of 2015 from 28392.30 USD Million in February of 2015. Imports in India averaged 6225.45 USD Million from 1957 until 2015, reaching an all time high of 45281.90 USD Million in May of 2011 and a record low of 117.40 USD Million in August of 1958. Imports in India is



Q4. Write short notes on India’s trade with: 5, 5

  1. LAC region
  2. Africa


  1. LAC region:

Even as India’s trade with the LAC region has grown at 25 per cent annually over the last decade, touching $ 46 billion in 2012-13, bilateral investments remain at a relatively low level. While the region received only 4 per cent of India’s outward FDI, investments from LAC region in India are still low. Now is the time to change that. India,


Q5. What are Special Economic Zones? Write one sentence each on any 5 SEZs in India.

(Meaning and role of SEZ, 5 SEZ) 5, 5


Special Economic Zones

special economic zone (SEZ) is a geographical region that is designed to export goods and provide employment. SEZs may be exempt from laws regarding taxes, quotas, Foreign Direct Investment (FDI)-bans, labour laws and other restrictive laws in order to make the goods manufactured in the SEZ at a globally competitive price.


Q6. What is the need and role of Focus Market Scheme? Discuss in detail.

(Focus market scheme) 10


Need and role of Focus Market Scheme

The objective of the scheme is to offset the high freight cost and other disabilities faced in accessing select foreign markets as to enhance the export competitiveness in these markets. The scheme allows duty credit scrip @ 3% of the FOB value of exports irrespective of the product they export to notified countries as in Appendix 37C of


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