A Detailed Study of Changing Foreign Trade Pattern of India Before Pre-Liberisation Era and Impact of Foreign Exchange Reserve on India's Foreign Trade

On the eve of planning the foreign trade of India showed an excess of imports over exports. The increase in imports was largely due to pent-up demand of the war and the post war period as a consequence of various control and restrictions. Like other developing countries India faces structural deficits in balance of trade. Right from the first plan, India's export has not earned enough foreign exchange to pay for Indian imports.This paper is based on secondary data collected from various government reports and other sources. This study discusses the salient features of India's trends in value of trade since Independence. It focuses on India's exports, imports and trade balance during various five year plan periods up to liberalization in 1991. It explains in detail the impact of foreign exchange reserve on India's foreign trade. It also evaluates the various factors responsible for various changes in India's Balance of Payments