Growth of Foreign Trade: A Comparative Analysis of India and United Kingdom

India and United Kingdom are the two major trading countries in the world. After, liberation from the British Colonia rule, India embarked upon the planned economic development in 1950. During the first four decades of the development period, India largely followed inward looking policy. Faced by the unprecedented crisis in her balance of payments, India switched over to the regime of Liberalization, Privatization and Globalization (LPG) in 1991. India's exports during the period from 1950 to 2017 surged by about 9.75 per cent and her imports by about 9.9 per cent which were higher than those of United Kingdom (7.73 per cent and 7.96 per cent respectively) as well as the world average growth rate (9.69 per cent and 9.65 per cent respectively) during the same period. In order to analyse the impact of LPG policies on the growth of India's foreign trade, the entire study period was divided in to two sub-periods viz., 1950 to 1990 and 1991 to 2017 corresponding to Pre-liberalization and Post-liberalization periods. The analysis revealed that during the pre-reform period, India's exports grew by only 7.49 per cent and imports by 7.96 per cent as against those in United Kingdom by 9.24 per cent and 9.06 per cent respectively and World by 11.40 per cent and 11.35 per cent. On the other hand, during the post-liberalization period, India's exports sky rocked by 13.41 per cent and imports by magnificent 15.03 per cent as against paltry growth of 4.03 per cent and 5.17 per cent respectively in the United Kingdom. India's growth rates of exports and imports were also higher than the growth of World exports at 7.40 per cent and World imports at 7.31 per cent. Thus the LPG policies in India accelerated the growth of her foreign trade. But there are challenges for her exports from the neighboring countries of China and also from the newly industrialized countries of the South East Asia. By taking appropriate measures, India hopes to sustain her growth rates of foreign trade in the years to come.