Consider the following statements:
- The value of Indo-Sri Lanka trade has consistently increased in the last decade.
- “Textile and textile articles” constitute an important item of trade between India and Bangladesh.
- In the last five years, Nepal has been the largest trading partner of India in South Asia.
Which of the statements given above is/are correct?
Detailed Explanation:
Answer: Option 2 — 2 only
This question tests knowledge of India's bilateral trade relationships with South Asian countries, specifically Sri Lanka, Bangladesh, and Nepal. Only Statement 2 about textile trade between India and Bangladesh is correct, while statements about consistent trade growth with Sri Lanka and Nepal being the largest trading partner are incorrect.
❌ Statement 1 – Incorrect: Indo-Sri Lanka trade has not consistently increased over the last decade; it witnessed significant slumps in 2012-13 and 2016-17, disrupting the steady growth pattern despite overall long-term growth.
✅ Statement 2 – Correct: Textiles and textile articles constitute an important item of bilateral trade between India and Bangladesh, with India exporting approximately $2.25 billion worth of textile products to Bangladesh.
❌ Statement 3 – Incorrect: Bangladesh, not Nepal, has been India's largest trading partner in South Asia in the last five years, with bilateral trade of over $10 billion in FY 2018-19.
📝 Short Notes: India's Trade Relations with South Asian Neighbors
| Country | Status | Key Trade Features (Recent Data) |
|---|---|---|
| Bangladesh | Largest trading partner in South Asia | • Bilateral trade: ~$10.25 billion (FY 2018-19) • Indian exports: $9.21 billion • Indian imports: $1.04 billion • Key exports: Textiles, machinery, petroleum products • India has significant trade surplus |
| Sri Lanka | Second major trading partner | • Bilateral trade: $6.2 billion (2018-19) • Indian exports: $4.7 billion • Indian imports: $1.5 billion • Trade experienced slumps in 2012-13 and 2016-17 • India maintains consistent trade surplus |
| Nepal | Important landlocked neighbor | • Bilateral trade: ~$7 billion • Transit-dependent economy • Key Indian exports: Petroleum, vehicles, machinery • Third largest South Asian trading partner |
| Pakistan | Limited formal trade | • Official trade minimal due to political tensions • Significant informal/third-country trade exists • Potential estimated at $10+ billion |
- India-Bangladesh Textile Trade: A cornerstone of bilateral commerce with India being a major supplier of cotton, yarn, and finished textile products to Bangladesh's garment industry
- SAFTA (South Asian Free Trade Area): Provides preferential trade framework among SAARC nations, though utilization remains suboptimal
- Trade Imbalance Pattern: India generally maintains trade surplus with most South Asian neighbors except Bhutan (hydropower imports)
- Connectivity Initiatives: BBIN (Bangladesh-Bhutan-India-Nepal) Motor Vehicles Agreement aims to boost regional trade through better connectivity
Question 2 of 2 India–Bangladesh Relations
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