On the eve of independence in 1947, foreign trade of India was typically known to the agricultural economy. Over the last 60 years, India's foreign trade has undergone a vast change in terms of composition and direction. The exports include a wide range of traditional and non-traditional items while imports consist mainly of capital goods, petroleum products, raw materials and chemicals to meet the ever-increasing needs of a developing and diversifying economy. This article discusses these issues and brings out the comparisons of various acts involved in it.

Foreign trade of India is an age-old activity and India has trade relations with several countries. Before independence, India exported raw material to other countries, especially the UK and imported manufactured goods. But after the first five-year plan, the whole pattern of trade changed. Policies were made according to the needs of the society. After joining the World Trade Organization (WTO), in 1995 Indian foreign trade drastically changed.

In the modern world, no economy is self-sufficient to meet varied demands. All countries have to trade and maintain international economic relations and India is no exception to this rule. Foreign trade refers to imports and exports of merchandise from one country to another under contracts of sale. No country in the world produces all the commodities it requires, on the contrary, a country may produce more of those commodities in the production of which it has a great or comparative advantage and may not produce or may produce smaller quantities of those in the production of which it has a greater or comparative disadvantage. The commodities which a country produces at an advantage, it exports, while those it produces with greater disadvantage, it imports.

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