Question

Directions for questions 86 to 90: Study the tables of the Indian foreign trade given below to answer the questions.

Principal Commodities\' Import - Weight (%)
COMMODITIES	2003-04	2004-05	2005-06
Bulk imports	37.87	39.09	42.56
Pearls, precious & semi-precious stones	9.25	8.80	6.42
Machinery	10.63	10.00	10.94
Project Goods	0.49	0.54	0.57
Others	41.76	41.57	39.51
TOTAL IMPORTS	100.00	100.00	100.00
Total Imports (in Crore of Rupees)	359107.66	501064.54	630526.77

Principal Commodities\' Export - Weight (%)
COMMODITIES	2003-04	2004-05	2005-06
Plantations	0.92	0.78	0.71
Agri & allied products	8.39	7.61	7.21
Marine products	2.08	1.60	1.40
Ores & minerals	3.69	5.29	6.02
Leather & mfrs.	3.19	2.89	2.56
Gems & jewellery	16.56	17.29	15.13
Sports goods	0.15	0.12	0.13
Chemicals & related products	15.43	16.00	15.10
Engineering goods	16.41	18.41	18.66
Electronic goods	2.74	2.28	2.18
Project goods	0.09	0.06	0.13
Textiles	18.86	15.16	14.80
Handicrafts	0.70	0.43	0.40
Carpets	0.90	0.75	0.81
Cotton raw incl. waste	0.28	0.10	0.61
Petroleum products	5.54	8.57	11.21
Unclassified exports	4.07	2.66	2.94
GRAND TOTAL	100.00	100.00	100.00
Total Exports in Rupees Crore	293366.75	375339.53	454799.97
US Dollar Exchange Rate	45.9513	44.9315	44.2735

The three commodities which had highest export growth rate in the year 2004-05 as compared to the previous year, arranged in descending order of growth rates are:

• A. petroleum products, ores and minerals, engineering goods
• B. ores and minerals, gems and jewellery, chemicals and related products
• C. gems and jewellery, chemicals and related products, agri and allied products
• D. ores and minerals, chemicals and related products, agri and allied products

Hint:

The export table gives each commodity's weight (%) of total exports, not its rupee value. Multiply the weight by that year's Total Exports figure to get the actual export value before comparing growth rates.

Answer 1

The Correct Option is A

This question is really testing whether you remember that a table of "weight (%)" values cannot be compared directly across years, because the total the percentages are taken from is different each year. Before ranking growth rates, convert every commodity's weight into an actual export figure using: value = weight% x Total Exports for that year.

Total Exports rose from Rs. 293366.75 crore in 2003-04 to Rs. 375339.53 crore in 2004-05, an overall jump of about 27.9%. A commodity whose weight percentage barely changed would still show export growth close to 27.9% purely from this base effect, so only commodities whose weight percentage rose noticeably will beat that base rate by a wide margin.

Checking the weight percentages from 2003-04 to 2004-05: petroleum products jumped from 5.54 to 8.57 (a big jump), ores and minerals from 3.69 to 5.29 (also a big jump), and engineering goods from 16.41 to 18.41. Working out the actual value growth for each:

\[ \text{Petroleum} = \frac{8.57 \times 375339.53}{5.54 \times 293366.75} - 1 \approx 97.9\% \]\[ \text{Ores \\& minerals} = \frac{5.29 \times 375339.53}{3.69 \times 293366.75} - 1 \approx 83.4\% \]\[ \text{Engineering goods} = \frac{18.41 \times 375339.53}{16.41 \times 293366.75} - 1 \approx 43.5\% \]

Gems and jewellery and chemicals both grew only around 33%, and agri and allied products grew about 16%, all clearly behind these three.

Let's summarize:

• Always convert a "% weight" figure to an actual value before comparing growth across years, since the total base itself changes.
• The three fastest growing export commodities in 2004-05 were petroleum products, ores and minerals, and engineering goods, in that order.

So option 1 is correct.