CHAPTER 7- LIFE LINES OF NATIONAL ECONOMY (GEOGRAPHY SOCIAL SCIENCE CLASS 10)

Movement of goods and services from supply location to demand locations necessitates the need for transport. Some people are engaged in facilitating these movements. The pace of development of a country depends upon the production of goods and services as well as their movement over space. Efficient means of transport are prerequisites for fast development.Movement of goods and services ae based on these important domains of the earth- Land water and air.
1. Why are the means of transportation known as the lifelines of national economy?

Transportation and communication help in expansion of trade and boost the economy. Connectivity through roads have improved accessibility in areas of difficult terrain and have helped in the economic development of these areas. Railways are the principal mode transportation for freight and passengers in India. Railways also make it possible for people to conduct multifarious activities like business, sight-seeing, pilgrimage along with transportation of goods over long distances. Railways in India bind the economic life of the country as well as accelerate the development of the industry. Waterways are the cheapest means of transport. They are the most suitable for carrying heavy and bulky goods. It is fuel efficient and environment friendly mode of transport. In recent time the development of Konkon Railway along the west coast has facilitated the movement of passengers and goods in the most important economic region of India. Indian oil operates a network of more than 15,000 km long crude oil, petroleum product and gas pipeline with a throughput capacity of 94.56 million tones per annum of oil and 21.69 million metric standard cubic meters per day of gas. Air transport in India was started in 1911. India is the world’s third largest domestic and overall civil aviation sector. Air transport in India supports 56.6 million jobs and account for over $2.2 trillion of the global gross domestic product. 

2. Changing nature of the International trade in the last fifteen years.

Trade between two countries is called international trade. It may take place through sea, air or land routes. Advancement of International trade of a country is an index to its economic barometer for a country. India has emerged as a software giant at the international level and it is earning large foreign exchange through the export of information technology. Almost every kind of product can be found in the international market. For example: food, clothes, spare parts, oil, wine, jewels, stocks, currencies and water. Services are also traded such as tourism, banking consulting and transportation. 

Much has happened in the international trading environment since the establishment of the WTO in 1995.World Trade organization is the only International organization dealing with the global rules of trade. Its main function is to ensure that trade flows as smoothly, predicably and freely as possible. WTO headquarters is located at Geneva, Switzerland. WTO has 164 member counties and 25 observer. After the membership expansion of European Union 1995, there has been a massive expansion in world trade. After this economic globalization China and India has entered into global economy and now they are seen as new economic growth pole. The spread of world trade growth was exceptionally fast in the period between 2000 to 2008 at the rate of 14 percent per annum. But the eruption of financial crisis at the end of 2008 and the subsequent global economic down turn the growth in world trade negative. But after the crisis Asian countries recovered much faster than developed nations. Global trade in India was growing at 5.7 percent in 2017. However, in 2019-20 it is estimated to grow at 1,0 percent. India is ranked 68 out of 190 countries under the indicator trading across borders in the ease of doing business report published by world bank in 2019. With reference to International trade India’s merchandise exports are less than its merchandise import. India’s exports of services are. More than its imports of services. India suffers from an overall trade/current deficit.

Let us take the example of TATA GROUP in international trade. Tata International Ltd is a premier trading, distribution and manufacturing company with a network of offices and subsidiaries spanning more than 27 countries in Africa, Europe, Middle East, Latin America and Asia. They generate a revenue of US $ 3.45 billion for FY 22 have set TATA international on a path of sustained growth even as it continues to focus on value added offerings to customers. Five key business verticals of TATA international are:

Metal’s trading – Metals trading business serves customers across 50 countries. Key products offered include steel, pig, iron, scrap and customized engineering products for the aluminum industry.

Distribution- Tata motors operate in over than 12 countries. The company has also added jaguar and Land Rover dealership in select locations. The company has an association with John Deere and has also partnered with Massey Ferguson.

Leather products: Tata is India’s leading exporter of leather products to over 35 countries. A diversified product basket includes a large range of footwears, finished leather and garments all of which reflect contemporary trends in design and color palette. Tata is also the largest exporter of children’s shoes from India and has a major stake in move-on-shoes a leading Portuguese footwear retailer. The company recently launched Tagra- high quality safe and specialized shoes using Feet Science to create strong enduring footwear.

Minerals Trading- The company is primarily engaged in trade of steam coal, coking coal, and iron ore and also trade base metals sponge iron an ferro alloys.

Agri trading- The vision for the business is to tap the ever- increasing global trade in agricultural commodities and create efficient linkages for a select presence across the value chain. Tata international is currently among the top private trading house in India and Vietnam and is posed to grow to a position of similar significance in Asia.