Kerala Trade & Commerce

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Kerala Trade & Commerce

The basic objective of economic reforms was to improve productivity growth and competitiveness in the Indian manufacturing sector. These reforms were aimed at making Indian manufacturing sector more efficient and technologically up to date, with the expectation that these changes would enable Indian manufacturing sector to achieve higher and sustainable growth. The government started to deregulate the Indian economy with a liberalization programme, focused on the investment pattern, trade policies, the financial sector, taxation and public enterprises.

In recent times, Industrialization has become the catch word of the midtwentieth century and industrial development of the under developed countries or developing countries like India. One of the great world crusades of our times, the Less Developed Countries (LDCs) hope to find in it a solution their problems of poverty, insecurity, overpopulation, backwardness, illiteracy etc. They consider it a panacea for all the evils of their social and economic life. In fact, the essence of economic development of an LDC like India consists essentially in the growth of industrialization.

Realizing the importance of industrialization, once Pt. Jawaharlal Nehru rightly remarked, “Real progress must ultimately depend on industrialization”. His vision was to see India in the group of developed nations of the world and industrialization was the only key to restructure the economy and to achieve sustained growth. Indian economy is a basically an agriculture based economy. It has been evident from the experience of the most of advanced countries that growth based upon agriculture sector will not be sustainable growth.

After studying such behaviour of terms of trade they made their belief that for the agriculture based economies terms of trade would always become unfavourable in long run because;

  1. a) The income elasticity of export-goods of agricultural countries is low, while the income elasticity of import-goods is very high. As in case of domestic demand, the demand for agricultural products in other countries, in particular advance countries, is very low. In fact, developed countries have surpluses in agriculture products for exports. As against this, the demand for the import of manufactured goods by LDCs is very intense; and
  2. b) With the advancement of technology, input-output coefficients are declining and most of primary products which were used as raw material are replaced by the industrial cheaper raw material.

On the other hand, if we develop only tertiary sector and ignore industrial sector then there may be tendency of inflation in the economy and this inflation may lead to deceleration economic growth. Therefore, industrialization is the only method to achieve sustained economic growth. Moreover, economic history demonstrates that to eliminate a country’s techno-economic backwardness it is necessary to develop the industrial sector and then to diversify it over a wide range of area and activities. Industrialization is a process of economic organization characterized by rapid setting up of industries and has invariably been the accompaniment of economic development. Nevertheless, economic development should not be treated synonymous with industrialization because industrialization is only a part of the whole process of economic development.

TRADE

Kerala has a long glorious history of trade with other countries in the world. But the direction and composition of the trade is changed a lot in years. Now the over dependence on horticulture and marine exports is risky as global commodity prices are beyond Kerala’s control. Diversification of exports to include high value knowledge based goods and services will spread the risk as well as improve inward flows to the State. Similarly, Kerala is known more for semi-skilled emigrants, the one major exception being highly skilled nurses. Efforts should be made to increase the skill and employability of all Keralalites so that they may benefit from global opportunities. The benefits gained in being a globally sought after tourist destination can be further enhanced through a variety of measures which ensure that Kerala remains a clear, eco-friendly and safe destination, with not only a rich historical and cultural tradition but a State which offers tourists world class recreation facilities. Being the major gateway to Kerala, the lion’s share of trade operations in the State is being conducted through Cochin Port. Items of trade include pepper, cashew, coir and coir products, tea, cardamom, ginger, spices and spices oil and marine products.

MAJOR ITEMS OF EXPORTS

All commodities, except tea and coir products, exported through the Cochin Port showed an increasing trend during in the recent years. Exports of cashew kernels increased by 11 per cent, sea foods by22 per cent, spices by 41 per cent and coffee by 36 per cent. Exports of tea has decreased slightly (by 0.21 per cent) and that of coir products by 6.5 per cent.

MAJOR ITEMS OF IMPORTS

Imports through Cochin Port continued to increase. The main items of import include fertilizers and raw materials, food grains, iron and steel and machinery, newsprint and raw cashew nut.

INDUSTRIES IN KERALA:

Kerala, with all its limitation, is putting efforts for speedy Industrial Development in the state. Traditional industries are handloom, cashew, Coir and Handicrafts where  the persons employed are from weaker sections of the community. Other important industries are Rubber, Tea, Ceramics, Electric and Electronic Appliances, Telephone Cables, Transformers, Bricks and Tiles, Drugs and Chemicals, General Engineering, Plywood Splints and Veneers, Beedi and Cigar, Soaps & Oils, Fertilizers and Khadi and Village Industry Products. The modern industries in Kerala are Metal, Shipping, Softwares, Electronics, Automobiles, Real Estate, and Tourism. etc. There are a number of manufacturing units for production of precision instruments, machine tools, petroleum products, paints, pulp paper, newsprint, glass and non-ferrous metals. Principal export products are Cashew Nut, Tea, Coffee, Spices, Lemon Grass Oil, Seafood, Rose Wood and Coir. The land of Kerala is endowed with a number of deposits of good quality china clay and beach sands containing a variety of valuable minerals. Heavy mineral sands and china clay contribute more than 90 percent of the total value of mineral production in the state. Kerala possesses one of the world class deposits of mineral sands in the coastal tracts between Neendakara and Kayamkulam. Gold occurs in Kerala both as primary and placer deposits and the known occurrences are mainly in Wayanad and Nilambur regions.

TRADITIONAL INDUSTRIES

Traditional industries form the back bone of industrial development of Kerala providing employment on a massive scale with minimum capital investment. But traditional sectors are operating at a low level of productivity and workers draw very low income. The traditional industries in Kerala particularly coir, handlooms, khadi, bamboo-based, handicrafts, artisanal and village (cottage) industries etc. are plagued by problems of high cost production, low quality, absence of diversified product range, inappropriate technology and incapacity for professional marketing and export. Increased mechanization, large scale of production and global competition in quality and price pose the threat of massive redundancies in these high employment sectors of Kerala, which may result in poverty and social problems.

DEVELOPMENT OF TOURISM AS AN INDUSTRY:

Until the early 1980s, Kerala was a relatively unknown destination, with most tourism circuits concentrated around the north of the country. State—laid the foundation for the growth of the tourism industry. Kerala strongly realized the importance of Tourism during the mid-80’s. Tourism was recognized as an industry in Kerala in 1986 – vide an order dated July 11, 1986. Kerala was the first state to declare tourism as an industry. The first tourism policy of the state was announced in 1995 underlining the importance of Public- Private Partnership. The Tourism Policy of Kerala stated as its main aim “to serve as a guiding force to make maximum use of Kerala’s tourism potential and also to make it an ideal instrument of social and economic growth”. By the early 2000s, tourism had grown into a fully-fledged, multi-billion dollar industry. Over the last five year plan period priority has been given to the development of Responsible Tourism with the objective of improving the standard of life of the locals. Tourism has come a long way since capturing new markets with its innovative products and marketing strategies. India Government bestowed industry status on tourism only in 1992. Kerala Tourism subsequently adopted the tagline God’s Own Country in its advertisement campaigns.

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