Which of the following are true for a sharp rise in India's contribution to International Trade?
(A) Improvement in the manufacturing sector
(B) Increase in goods and services tax
(C) Diversification of markets
(D) Liberal policies of the government
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → (A), (C) and (D) only
India’s foreign trade has grown many times since 1950-51. Trade grows when a country makes more goods to sell, finds more buyers and makes trading easier.
(A) Improvement in the manufacturing sector — Correct. Factories now make more goods, and many of them are sold abroad. So exports grow.
(B) Increase in goods and services tax — Incorrect. Goods and services tax (GST) is a tax on goods and services sold within the country. A rise in a tax makes goods dearer; it does not push foreign trade up.
(C) Diversification of markets — Correct. India now trades with many more countries, so its sales do not depend on a few buyers.
(D) Liberal policies of the government — Correct. Fewer controls and lower barriers make it easier to import and export.
NCERT (2026-27): “INTERNATIONAL TRADE … Let us examine the changing pattern of India’s International trade. In 1950-51, India’s external trade was worth Rs.1,214 crore, which rose to Rs. 77,19,796 crore in 2020-21.… There are numerous reasons for this sharp rise in overseas trade, such as the momentum picked up by the manufacturing sectors, the liberal policies of the government and the diversification of markets.” |