The nature of India’s foreign trade has changed over the years. Though there has been an increase in the total volume of import and export, the value of import continued to be higher than that of exports.

Agriculture and its allied sectors saw a rapid decline in India’s export basket due to tougher international competition in products like coffee, cashew, etc., though an increase has been registered in floricultural products, fresh fruits, marine products and sugar.

Manufacturing began to steer India’s export direction, with the sector alone accounting about three-fourth in terms of total value of exports (in 2016-17). In the exporting market, China and other East Asian countries are the major competitors of India.

The food crises in the year after Independence were managed by import of foodgrains. Thanks to the success of the Green Revolution, foodgrain import was discontinued after the 1970s. Capital goods, machinery and equipment still makes up a large share of India’s import basket.

Foodgrain import was replaced by fertilisers and petroleum. Special steel, edible oil and chemicals being the other commodities. The import of petroleum products has witnessed a sharp increase, as it is not just a fuel but raw material in various industries in India. Non-electrical machinery, transport equipment, manufacturers of metals and machine tools were the main items of capital goods. Pearls and semi-precious stones, gold and silver, metalliferous ores and metal scrap, non-ferrous metals, electronic goods, etc. forms the other major import commodities.