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Answer» Reason for negative balance of trade: - In the initial years of independence, India was an underdeveloped country. So, it imported more and exported less. This resulted, in negative balance of trade.
- After 1980, India started developing more. So, people started demanding more goods from the industries. Hence, it became necessary to import more and more goods to sustain, maintain and expand the large industries established in India.
- Moreover, the industries could barely meet the domestic demands so there was no surplus production that could be exported. So, again our balance of ‘ trade remained negative.
- After 1991, India’s exports increased significantly. To sustain in international competition, Indian industries started importing technology, petroleum, etc. in large quantity. Again our exports remained high compared to imports.
- Hence, since indepehdence our balance of trade has always remained negative.
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