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

Given that the weight (%) of Petroleum crude and products in the total imports of India is 26.70, 27.87, and 30.87 in the years 2003-04, 2004-05, and 2005-06 respectively. What is the ratio of yearly difference in the export of Petroleum Products and import of Petroleum crude and products, in dollar terms, in the year 2005-06 versus 2004-05?

• A. 1.36
• B. 1.38
• C. 1.46
• D. 1.48

Hint:

Convert each year's total imports and total exports to dollar terms using the given exchange rate, apply the petroleum weight percentages to get petroleum-specific import and export values, subtract export from import for each year, then divide the 2005-06 gap by the 2004-05 gap.

Answer 1

The Correct Option is A

Step 1: Convert the total trade figures to dollar terms.
Divide the rupee crore totals by the corresponding exchange rate to convert to dollar-crore terms.
Total Imports 2004-05: \(\dfrac{501064.54}{44.9315} \approx 11151.87\)
Total Imports 2005-06: \(\dfrac{630526.77}{44.2735} \approx 14241.68\)
Total Exports 2004-05: \(\dfrac{375339.53}{44.9315} \approx 8352.30\)
Total Exports 2005-06: \(\dfrac{454799.97}{44.2735} \approx 10272.42\)

Step 2: Find the dollar value of petroleum imports and exports for each year.
The weight of Petroleum crude and products in total imports is given as 27.87 per cent for 2004-05 and 30.87 per cent for 2005-06.
Petroleum imports 2004-05: \(27.87\% \times 11151.87 \approx 3108.0\)
Petroleum imports 2005-06: \(30.87\% \times 14241.68 \approx 4396.4\)
From the export table, Petroleum products contribute 8.57 per cent of exports in 2004-05 and 11.21 per cent in 2005-06.
Petroleum exports 2004-05: \(8.57\% \times 8352.30 \approx 715.8\)
Petroleum exports 2005-06: \(11.21\% \times 10272.42 \approx 1151.5\)

Step 3: Find the yearly gap between petroleum imports and exports.
For each year, subtract the export value from the import value to find that year's shortfall.
2004-05 gap: \(3108.0 - 715.8 = 2392.2\)
2005-06 gap: \(4396.4 - 1151.5 = 3244.9\)

Step 4: Find the ratio of the two years' gaps.
\[ \dfrac{2005\text{-}06\ \text{gap}}{2004\text{-}05\ \text{gap}} = \dfrac{3244.9}{2392.2} \approx 1.36 \]

Final Answer:
The ratio works out to about 1.36. \[ \boxed{1.36} \]