8.2. Changing Patterns of the Composition of India’s Import

India faced serious food shortage during 1950s and 1960s. The major item of import at that time was foodgrain, capital goods, machinery and equipment.

During the 1950s and 1960s, India struggled with food shortages, which led to a significant reliance on imports. The main imports included food grains to feed the population and capital goods required for industrial development. This dependency on imports reflects the challenges the country faced in achieving self-sufficiency in those early years.

Imagine a household that is struggling to meet its basic needs due to a lack of resources. They might have to rely on outside help—like borrowing food or buying essentials from neighbors—just like India relied on imported food during its early years after independence.

The balance of payment was adverse as imports were more than exports in spite of all the efforts of import substitution.

In the initial stages, India's import expenditure exceeded its earnings from exports, leading to unfavorable balance of payments. Despite efforts to substitute imports with domestic products—like producing local goods instead of relying on foreign ones—India continued to struggle with maintaining its import-export balance.

Think of a student who spends more than they earn from their part-time job while trying to buy all their needs instead of learning to make things themselves, leading to financial imbalance. This scenario mirrors India's early import challenges.

After 1970s, foodgrain import was discontinued due to the success of Green Revolution, but the energy crisis of 1973 pushed petroleum prices up.

The Green Revolution, which introduced high-yielding varieties of seeds and improved agricultural practices, helped India become self-sufficient in food grains. This significantly reduced the need for food imports. However, the energy crisis in 1973 caused a surge in oil prices globally, forcing India to begin importing petroleum to meet its energy needs.

Imagine a farm that starts to produce enough food after years of hard work, but then suddenly faces a drought affecting its water supply. The farm’s new challenge is finding affordable water sources, similar to how India shifted from food to energy imports in response to global conditions.

Manufacturing sector alone accounted for 67.8 per cent of India’s total value of export in 2021-22. Major items of India’s import include pearls, precious and semi-precious stones, gold and silver, non-metal ferrous metals.

As of 2021-22, the manufacturing sector has become crucial for India, contributing significantly to exports. Concurrently, imports have shifted to include a variety of materials such as gemstones, metals, and petroleum. This shift reflects India's growing industrial base and increasing demand for raw materials essential for production.

Consider a jewelry business that exports a lot of finished products but needs to import precious metals and stones to create those products. This scenario illustrates India's current trade dynamics, where imports directly support its manufacturing and export industries.

It is noticed that the import of capital goods maintained a steady decline. Import of food and allied products declined.

Over time, the data indicates a steady decline in the import of capital goods, suggesting that India is increasingly producing these goods domestically. Similarly, a decline in food imports reflects the country's improved agricultural productivity. This illustrates the country's transition towards a manufacturing-driven economy.

Imagine a craftsman who starts making all of their tools instead of buying them. As their skills improve, they not only reduce costs but also find better ways to create what they need, similar to India's reduction in capital goods imports as its manufacturing capabilities grew.

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