KSLU Solved Question Papers
International Trade Economics
Previous Year Question Paper with Solution
B.A. LL.B. (Five Years) · Sem 10
2013 Jun Examination
munotes.in
Mumbai
B.A. LL.B. (Five Years) Sem 10 International Trade Economics 2013 Jun Question Paper with Solutions
First published on munotes.in on 21 October 2026.
Published by munotes.in, Mumbai.
Model answers written and edited by the munotes.in editorial desk.
Passages from this volume may be quoted, in print, online or by an AI system, with credit: name munotes.in and link to this volume's page. The volume may not be reproduced as a whole. Full terms at munotes.in/content-license.
munotes.in is an independent study resource for students of Karnataka State Law University. It is not affiliated with Karnataka State Law University, and is not endorsed by it.
The University does not publish an official answer key for this paper. The answers in this volume are model answers, written to show how a full-mark answer is built. They are a study aid, not an authority on what an examiner marked.
The question paper reproduced here is the paper as set by Karnataka State Law University at the 2013 Jun examination.
Contents
The questions below are the paper as Karnataka State Law University set it at the 2013 Jun examination, in the order it was set.
MarksPage
MarksPage
The Paper as Set
The questions in this volume are the questions asked at the 2013 Jun examination, reproduced as Karnataka State Law University set them, in the order it set them. Long reading passages are shortened to their first and last lines and our summary; the original paper prints them in full. Only the answers are ours. See the original question paper.
Duration 3 hours · Total marks 100 · 20 questions answered
Instructions printed on the paper
- N.B. (1) Answer all 5 Questions. (2) One essay type and one short note question or problem from each unit have to be attempted. (3) Figures to the right indicate marks. (4) Answers should be written either in English or Kannada completely.
How to use this volume
Solve the paper first, under exam conditions and against the clock. Then read the answers here and mark your own. Reading a solution before attempting the question feels productive and teaches very little, because recognising an answer is not the same as being able to write one.
Q1
Unit I
(a)Narrate the history of International Trade in India.[15]
Answer
For full marks, cover: India as one of the oldest trading economies; the history in six periods: (1) the ancient world (Harappan trade with Mesopotamia; the monsoon trade with Rome, Muziris, Arikamedu, the Periplus and Pliny's complaint); (2) the medieval Indian Ocean (Arab and Gujarati merchants, south Indian sea power, Calicut, Cambay and Surat; textiles for silver); (3) the European companies (Vasco da Gama in 1498; the East India Company's charter of 1600; factories and presidencies); (4) colonial rule (Plassey and the Diwani; the Charter Acts of 1813 and 1833; the reversal from exporter of manufactures to exporter of raw materials; railways and the Suez Canal; the drain argument; imperial preference); (5) planned import substitution, 1947 to 1991 (the Imports and Exports (Control) Act 1947, licensing, canalisation, exchange control; stagnant exports; the 1991 crisis); (6) liberalisation and integration since 1991 (the Foreign Trade (Development and Regulation) Act 1992; the WTO; removal of quantitative restrictions by 2001; FEMA; Foreign Trade Policies; the new trade agreements; services); a table; an assessment; a conclusion.
Introduction
Few countries have traded across the seas for as long as India. Its history of foreign trade is not a straight line of growth. It runs through four turns: an age of Indian exports of manufactures, a colonial reversal, forty years of inward-looking control, and the opening since 1991. Each period left a mark on the law and policy India follows today.
Period 1: The ancient world
Harappan trade. The cities of the Indus valley traded with Mesopotamia and the Persian Gulf more than four thousand years ago. Harappan seals, weights and carnelian beads have been found at Mesopotamian sites. Mesopotamian texts speak of ships from a land called Meluhha, widely identified with the Indus region. At Lothal in Gujarat, archaeologists found a large brick basin that many identify as a dockyard.
The monsoon trade with Rome. Around the start of the common era, Greek and Roman sailors learned to use the south-west monsoon to cross the Arabian Sea directly. Ports on India's west and south-east coasts grew rich on the trade.
- Muziris, on the Kerala coast, was called "the first emporium of India" by Pliny the Elder.
- The Periplus of the Erythraean Sea, a Greek merchant's guide of the later first century, lists Indian ports and the goods traded at each.
- At Arikamedu, near Puducherry, excavations found Roman pottery, wine jars and glass.
India sold pepper, spices, fine cotton cloth, gems and ivory, and took Roman gold and silver coin and wine. Pliny complained that India drained the empire of at least fifty million sesterces a year. The complaint is the oldest recorded protest about a trade deficit with India.
Period 2: The medieval Indian Ocean
From about the eighth century, Arab, Persian, Gujarati and Tamil merchants linked India to the Red Sea, East Africa, South-East Asia and China. The Chola kings of the south sent naval expeditions into South-East Asia in the eleventh century. Ports such as Calicut on the Malabar coast and Cambay in Gujarat were meeting points of this trade. Under the Mughals, Surat became the empire's chief port.
Indian cotton and silk textiles were sold across Asia, Africa and later Europe. Since India bought few goods in return, much of the payment came in silver. Trade was governed by custom, port rules and the merchants' own practices, not by treaties.
Period 3: The European companies
Vasco da Gama reached Calicut by sea in 1498, opening a direct route from Europe round Africa. The Portuguese tried to control the sea lanes by force and by passes for ships.
On 31 December 1600, Queen Elizabeth chartered the English East India Company with an exclusive right to trade in the East. Its first important base in India was at Surat. Factories, meaning trading posts held with the local ruler's permission, followed on the east coast and in Bengal. Madras, Bombay and Calcutta became its three presidencies. The Dutch and the French formed rival companies. For the first century and a half, these companies were buyers of Indian goods, paying largely in bullion.
Period 4: Colonial rule
From trader to ruler. After Plassey (1757) and Buxar (1764), the Company obtained the Diwani of Bengal, Bihar and Orissa in 1765. It could now buy Indian goods for export with Indian land revenue, rather than with silver brought from Europe.
The end of the Company's monopoly. The Charter Act of 1813 opened the trade with India to all British merchants. The Company kept only the trade with China and in tea. The Charter Act of 1833 ended its commercial functions entirely.
The great reversal. Britain's Industrial Revolution produced cheap machine-made cloth. Indian handloom textiles lost their export markets and then their home market, while British goods entered India at low duties. India became an exporter of raw materials, such as raw cotton, jute, indigo, opium and tea. It became an importer of manufactures. Historians call the decline of Indian crafts deindustrialisation.
Transport and integration. Railways from 1853 and the opening of the Suez Canal in 1869 tied Indian ports and the interior to world markets. They made bulk exports of grain and fibre possible.
The drain argument. Indian nationalists, led by Dadabhai Naoroji, argued that India's export surplus paid for "home charges" in Britain and was a drain of wealth. On this view it was not a gain for India.
Imperial preference. At Ottawa in 1932, Britain built a system of tariff preferences within the Empire. India's trade was tied still more closely to Britain.
Period 5: Planned import substitution, 1947 to 1991
At independence, India chose to industrialise by making at home what it had imported. The policy rested on four ideas: pessimism about exports, a shortage of foreign exchange, protection of infant industries and self-reliance.
The instruments.
- Import licensing under the Imports and Exports (Control) Act 1947, with an indigenous availability test and an actual user condition.
- Canalisation of bulk imports through State trading agencies.
- Very high tariffs.
- Exchange control, from 1973 under the Foreign Exchange Regulation Act.
- An overvalued, administered rupee, devalued in June 1966.
India was nonetheless a founding contracting party to GATT 1947.
The record. Merchandise exports were 1,016 million dollars in 1949-50 and only 18,143 million dollars in 1990-91. In the whole series, India recorded a trade surplus in just two years, 1972-73 and 1976-77. The policy built an industrial base, but exports stagnated.
The crisis of 1991. The Gulf conflict raised oil prices and cut remittances, and non-resident deposits began to leave. At the end of 1990-91, foreign currency reserves were 2,236 million dollars, about five weeks of imports. India borrowed from the IMF and devalued the rupee on 1 and 3 July 1991.
Period 6: Liberalisation and integration since 1991
- A new law. The Foreign Trade (Development and Regulation) Act 1992 repealed the 1947 Act. Its purpose is to develop and regulate trade by facilitating imports and increasing exports. Since a 2010 amendment, section 3(4) states that no licence is needed unless the law requires one.
- The WTO. India became an original member of the WTO on 1 January 1995. After losing India: Quantitative Restrictions (adopted 22 September 1999), it ended import licensing on 2,714 tariff lines by 1 April 2001.
- FEMA. The Foreign Exchange Management Act 1999 replaced FERA, treating foreign exchange as a matter of management rather than crime.
- Foreign Trade Policies. A series of policies set export incentives and procedures. The current Foreign Trade Policy 2023 came into force on 1 April 2023. Special Economic Zones have a statute of their own, the SEZ Act 2005.
- Trade agreements. India's newer agreements include those with Mauritius (2021), the UAE (May 2022) and Australia (December 2022). They also include the EFTA States (signed 10 March 2024, in force 1 October 2025), the United Kingdom (signed July 2025) and Oman (December 2025). Agreements with New Zealand and the European Union were announced in December 2025 and January 2026.
- Services. In 2024-25, India's exports of goods were 437.7 billion dollars and of services a record 387.5 billion. Total exports reached 825.3 billion dollars, the highest ever. India's share of world merchandise exports rose from about 1 per cent in 2005 to 1.8 per cent in 2024.
The periods at a glance
| Period | India's role | Governing rules |
|---|---|---|
| Ancient | Exporter of spices, cloth and gems | Custom and port practice |
| Medieval | Hub of Indian Ocean trade | Merchant custom; local rulers |
| 1498 to 1757 | Supplier to European companies | Royal charters; monopolies |
| 1757 to 1947 | Raw materials out, manufactures in | Company rule; Charter Acts; imperial preference |
| Period | India's role | Governing rules |
|---|---|---|
| 1947 to 1991 | Import substitution | 1947 Act; licensing; FERA |
| Since 1991 | Open, rule-based trade; services leader | FTDR Act 1992; WTO; FEMA; FTP 2023 |
Assessment
India's trade history shows that openness and prosperity went together. India flourished when it sold manufactures to the world. It became poorer when colonial policy reduced it to a supplier of raw materials. Its controls after 1947 protected industry but kept exports small. The reforms of 1991 have rebuilt India's place in world trade, above all in services.
Conclusion. India traded with Mesopotamia and Rome, and was a centre of the medieval Indian Ocean trade. European companies, and then colonial rule, turned it into an exporter of raw materials. After independence, import substitution under licensing built industry but left exports stagnant, ending in the 1991 crisis. Since then India has opened its trade under the 1992 Act, the WTO and FEMA. It now earns almost as much from services as from goods, and is building a new network of trade agreements.
The rest of the answers
The first answer is free. The rest come with the KSLU B.A. LL.B. Semester 10 solved papers.
You have read the question paper and its first answer in full. Buy the solved papers once and you can read every answer of every solved paper in this semester.
Solved papers: ₹499 Already bought it? Sign in
The question paper itself stays free.
Found an error in this volume? Report it and we will check it against the paper.