Commercial Geography, Sectors in economy, geographical indications, Natural Resources, Sources of energy, capital formation

1. Savitribai Phule Pune University
FY BBA – IB
Semester II (CBCS)
Pattern 2019
Commercial Geography
Course Code – 203
Credits - 3
Dr. Mangesh Bhople,
Asst. Prof.,
MIT Arts Commerce and Science College, Alandi Pune

2. Unit – 1 Introduction to Commercial Geography (Indian Context)
1) Definition, Nature and Scope of Commercial Geography
2) Concept, Features, Role and Utility of Commercial Geography in business and economics.
3) Major aspects of study of commercial geography
4) Commercial Sectors in the economy such as primary, secondary, tertiary, quaternary.
5) Geographical Indications – Concept, Nature and Importance

3. Definition, Nature and Scope of Commercial
Geography
• Nature of Commercial Geography
• For the expansion of the empire¸ the Britishers began the study of commercial
geography as a discipline.
• After the Industrial Revolution¸ the Britishers expanded their trade all over the
world.
• They had to collect various kinds of information to make the trade stable. For that
matter commercial geography stood as an important subject.
• The main purpose of the commercial geography is to study the productions of
different regions¸ their use and trade.
• This study is beneficial to the economic development.
• Where are the primary occupations located?
• Which products are obtained from these occupations?
• How they are utilized in other industries?
• And which industrial products are obtained? The study of such questions is done in
the commercial geography.

4. Nature
Production
Consumption
Trade
Transport and communication.
Services

5. Importance of /Significance of Commercial
Geography
• Encouragement to Increase the Production
• Search for Markets
• Motivation to Trade
• Development of Transport and Communication
• Development of Services

6. Sectors of the economy
1.Primary sector – extraction of raw materials – mining, fishing and
agriculture.
2.Secondary / manufacturing sector – concerned with producing
finished goods, e.g. Construction sector, manufacturing and utilities,
e.g. electricity.
3.Service / ‘tertiary’ sector – concerned with offering intangible goods
and services to consumers. This includes retail, tourism, banking,
finance, entertainment and I.T. & ITeS services.
4.Quaternary sector (knowledge economy, education, research and
development)
• 64%=16-18% Contri in GDP
• 24% = 34%
• 12% = 50 to 54%

8. Nature and purpose of a
geographical indication (GI)
• Geographical indication, a form of intellectual property, is nothing but
an indication identifying the source or appellation of origin of relevant
product or service. It is an important method of indicating the origin of
goods and services. In principle, geographical indication may describe
the origin and peculiar characteristics of a service.
• Example: Champagne from France, Tobaco from Cuba, Basmati
Rice from India and Pakistan

9. • It is significant to note that, the Paris Convention did not use the term
Geographical Indication. Instead, it used the terms;
• Appellations of origin: It indicates the name of the country or the
place from where the product actually originates and the
characteristic qualities of such products are exclusively due to the
geographical environment including the natural or human factors or
both. Quality and the characteristics of the products or services has
to be exclusively attributable to the geographical environment.
• Example: Aranmula Kannadi, Kanchipuram Saree, Kolhapuri
Chappal, Bengal Rasgulla etc.
• Aranmula Kannadi https://aranmulakannadi.net/
• https://issuu.com/shreyoshimitra/docs/kolhapur_cc
• https://www.youtube.com/watch?v=pSyNBqVhwaA&t=468s Paithani
• https://www.youtube.com/watch?v=ahrSO9ofZfk Rasgulla
• https://www.wipo.int/edocs/pubdocs/en/geographical/952/wipo_pub_95
2.pdf

10. Geographical Indication
• https://vikaspedia.in/social-welfare/entrepreneurship/geographical-
indications

11. • Presentations on the concept, scope and importance of commercial
geography.
• Case study on the utility and role of commercial geography.
• Presentations on Important aspects of commercial geography and
various commercial sectors associated with. ( Indian Context)

12. Unit 2. Natural Resources and Commercial usage
• 1. Meaning, Nature and Importance
• 2. Types of forests, Characteristics, Distribution and Significance
• 3. Non Conventional energy resources – Solar, Wind and Tidal energy
• 4. Commercial usage and role of natural resources in the development of
commerce.

13. Meaning, Nature and Importance
• These are the resources that are found in the environment and are
developed without the intervention of humans.
• Common examples of natural resources include air, sunlight, water,
soil, stone, plants, animals and fossil fuels.
• Natural resources are naturally occurring materials that are useful
to man or could be useful under conceivable technological,
economic or social circumstances or supplies drawn from the
earth, supplies such as food, building and clothing materials,
fertilizers, metals, water and geothermal power.
• For a long time, natural resources were the domain of the natural
sciences.

14. Natural resources can be defined as the resources that exist (on the planet) independent of human
actions.

15. What are the Different Types of Natural
Resources?
• Based on the availability are two types of natural resources:
1.Renewable: resources that are available in infinite quantity and
can be used repeatedly are called renewable resources.
Example: Forest, wind, water, etc.
2.Non-Renewable: resources that are limited in abundance due
to their non-renewable nature and whose availability may run
out in the future are called non-renewable resources.
Examples include fossil fuels, minerals, etc.

16. What are the Different Types of Natural
Resources?
• Biotic: these resources come from living and organic material,
such as forests and animals, and include the materials that can
be obtained them. Biotic natural resources also include fossil
fuels such as coal and petroleum which are formed from
organic matter that has decayed.
• Abiotic: these resources come from non-living and non-organic
material. Examples of these resources include land, fresh water,
air, and heavy metals (gold, iron, copper, silver, etc.).

17. Renewable resource Non-renewable resource
It can be renewed as it is available in infinite
quantity
Once completely consumed, it cannot be
renewed due to limited stock
Sustainable in nature Exhaustible in nature
Low cost and environment-friendly High cost and less environment-friendly
Replenish quickly
Replenish slowly or do not replenish naturally
at all
Difference between Renewable and Non-Renewable Resources

18. Most Important Natural Resources are:
1.Air: Clean air is important for all the plants, animals, humans to survive
on this planet. So, it is necessary to take measures to reduce air
pollution.
2.Water: 70% of the Earth is covered in water and only 2 % of that is
freshwater. Initiative to educate and regulate the use of water should be
taken.
3.Soil: Soil is composed of various particles and nutrients. It helps plants
grow.
4.Iron: It is made from silica and is used to build strong weapons,
transportation and buildings
5.Forests: As the population increases, the demand for housing and
construction projects also increases. Forests provide clean air and
preserve the ecology of the world.
6.Minerals: Minerals are solid substances that are present in nature and
can be made of one element or more elements combined together
(chemical compounds). Gold, Silver and carbon are elements that
form minerals on their own. They are called native elements.

19. Any natural substance that humans use can be considered a natural resource.
Oil, coal, natural gas, metals, stone and sand are natural resources.
Other natural resources are air, sunlight, soil and water.
Animals, birds, fish and plants are natural resources as well.
Natural resources are used to make food, fuel and raw materials for the production of goods.
All of the food that people eat comes from plants or animals.
Natural resources such as coal, natural gas and oil provide heat, light and power.
Natural resources also are the raw materials for making products that we use everyday from our toothbrush and lunch
box to our clothes, cars, televisions, computers and refrigerators.

20. Natural Resource Product/Service
Trees Paper, furniture, fuel, Fruits
Cotton Clothing
Oil/petroleum Plastic, fuel
Natural gas Fuel
Coal Fuel
Iron ore Steel products (cans, bridges)
Bauxite ore Aluminium products (cans, car parts)
Gold Jewellery, dental material
Copper Wire, coins, electrical equipment
Manganese Steel, cast iron
Cobalt Steel, jet engine parts, cutting tools
Platinum Air pollution control and telecommunications equipment,
jewellery
Chromium Stainless steel, green glass, leather treatment
Diamonds Jewellery, mechanical equipment
Soil, Water, Air, Sunlight, Forests, Animals ?????

21. Some important AVs on Natural resources
• https://www.youtube.com/watch?v=ylkZtjc8jK4 10 countries
• https://www.youtube.com/watch?v=YoN06_j4EJE India
• https://www.youtube.com/watch?v=4aB3PbWUpqY Soils
• https://www.youtube.com/watch?v=999ngrj_BHM Rivers
• https://www.youtube.com/watch?v=Jg1g9kdfutI Forests
• https://www.youtube.com/watch?v=7lpsjhkwYXM Fruits
• https://www.youtube.com/watch?v=VXM3IIl-0og types of forests

22. What are the different types of forests
in India?
• Coniferous Forests,
• Broadleaved Forests,
• Evergreen Forests,
• Wet Evergreen,
• Deciduous Forests,
• Mangrove Forests
• Total Forest and Tree Cover rises to 24.56% of the total
geographical area of India.
• https://www.classmate4u.com/types-of-forest-in-inida/

23. • a) Coniferous Forests grow in the Himalayan mountain region, where the
temperatures are low. These forests have tall stately trees with needlelike leaves
and downward sloping branches so that the snow can slip off the branches. They
have cones instead of seeds and are called Gymnosperms.
• b) Broadleaved Forests have several types, such as evergreen forests,
deciduous forests, thorn forests, and mangrove forests. Broadleaved forests
have large leaves of various shapes.
• c) Evergreen Forests grow in the high rainfall areas of the Western Ghats,
North-Eastern India, and the Andaman and Nicobar Islands. These forests grow
in areas where the monsoon lasts for several months.
• d) Wet Evergreen
• Wet evergreen forests are found in the south along the Western Ghats and the
Nicobar and Andaman Islands and all along the north-eastern region. It is
characterized by tall, straight evergreen trees that have a buttressed trunk or root
on three sides like a tripod that helps to keep a tree upright during a storm.
These trees often rise to a great height before they open out like a cauliflower.
The more common trees that are found here are the jackfruit, betel nut palm,
Jamun, Mango, and Hollock. The trees in this forest form a tiered pattern: shrubs
cover the layer closer to the ground, followed by the short structured trees and
then the tall variety. Beautiful ferns of various colours and different varieties of
orchids grow on the trunks of the trees.

24. • e) Semi-Evergreen
• Semi-evergreen forests are found in the Western Ghats, Andaman and Nicobar
Islands, and the Eastern Himalayas. Such forests have a mixture of the wet
evergreen trees and the moist deciduous trees. The forest is dense and is filled
with a large variety of trees of both types.
• f) Deciduous Forests are found in regions with a moderate amount of seasonal
rainfall that lasts for only a few months. Most of the forests in which Teak trees
grow are of this type. The deciduous trees shed their leaves during the winter
and hot summer months. In March or April, they regain their fresh leaves just
before the monsoon when they grow vigorously in response to the rains. Thus
there are periods of leaf fall and canopy re-growth. The forest frequently has thick
undergrowth as light can penetrate easily onto the forest floor.
• g) Thorn Forests are found in the semi-arid regions of India. The trees, which are
sparsely distributed, are surrounded by open grassy areas. Thorny plants are
called Xerophytic species and are able to conserve water. Some of these trees
have small leaves, while other species have thick, waxy leaves to reduce water
losses during transpiration. Thorn forest trees have long or fibrous roots to reach
water at great depths. Many of these plants have thorns, which reduce water loss
and protect them from herbivores.
• h) Mangrove Forests grow along the coast, especially in the river deltas. These
plants are able to grow in a mix of saline and freshwater. They grow luxuriantly in
muddy areas covered with silt that the rivers have brought down. The mangrove
trees have breathing roots that emerge from the mud banks.

25. Non Conventional energy resources – Solar,
Wind and Tidal energy
• Energy generated by using wind, solar, small hydro, tides,
geothermal heat and biomass is known a non-conventional
energy.
• All these sources are renewable process of energy generation
and do not cause environmental pollution.

26. Different non-conventional energy sources
Solar energy : Solar energy is the most readily available and free source of energy since prehistoric times. It is estimated that solar energy equivalent to over 15,000
times the world's annual commercial energy consumption reaches the earth every year. Solar energy can be utilized through two different routes, as solar thermal route
and solar electric (solar photovoltaic) routes. Solar thermal route uses the sun's heat to produce hot water or air, cook food, drying materials etc. Solar photovoltaic uses
sun's heat to produce electricity for lighting home and building, running motors, pumps, electric appliances, and lighting. In solar thermal route, solar energy can be
converted into thermal energy with the help of solar collectors and receivers known as solar thermal devices.
Wind energy: Wind energy is basically harnessing of wind power to produce electricity. The kinetic energy of the wind is converted to electrical energy. When solar
radiation enters the earth's atmosphere, different regions of the atmosphere are heated to different degrees because of earth curvature. This heating is higher at the
equator and lowest at the poles. Since air tends to flow from warmer to cooler regions, this causes what we call winds, and it is these airflows that are harnessed in
windmills and wind turbines to produce power. Now wind power is harnessed to generate electricity in a larger scale with better technology.
Bio energy: Bio-energy, in the form of biogas, which is derived from biomass, is expected to become one of the key energy resources for global sustainable
development. Biomass is a renewable energy resource derived from the carbonaceous waste of various human and natural activities. Biomass does not add carbon
dioxide to the atmosphere as it absorbs the same amount of carbon in growing as it releases when consumed as a fuel. Its advantage is that it can be used to generate
electricity with the same equipment that is now being used for burning fossil fuels. Bio energy is being used for cooking, mechanical applications, pumping, power
generation etc.
Hydro energy : The potential energy of falling water, captured and converted to mechanical energy by waterwheels, powered the start of the industrial revolution.
Wherever sufficient head, or change in elevation, could be found, rivers and streams were dammed and mills were built. Water under pressure flows through a turbine
and causes it to spin. The Turbine is connected to a generator, which produces electricity.
Ocean energy: The ocean contains two types of energy: thermal energy from the sun's heat, and mechanical energy from the tides and waves. Ocean thermal energy is
used for many applications, including electricity generation. There are three types of electricity conversion systems: closed-cycle, open cycle, and hybrid. Closed cycle
systems use the ocean's warm surface water to vaporize a working fluid, which has a low boiling point, such as ammonia. The vapour expands and turns a turbine. The
turbine then activates a generator to produce electricity. Open-cycle systems actually boil the seawater by operating at low pressures. This produces steam that passes
through a turbine / generator. The hybrid systems combine both closed-cycle and open-cycle systems. Ocean mechanical energy is quite different from ocean thermal
energy. Even though the sun affects all ocean activity, tides are driven primarily by the gravitational pull of the moon, and waves are driven primarily by the winds. A
barrage (dam) is typically used to convert tidal energy into electricity by forcing the water through turbines, activating a generator.
Energy from Wastes: An estimated 50 million tons of solid waste and approximately 6,000 million cubic meters of liquid waste are generated annually in the urban
areas of India. In India, there is a great potentiality of generating approximately 2,600 MW of power from urban and municipal wastes and approximately, 1,300 MW
from industrial wastes, respectively. A total of 48 projects with aggregate capacity of about 69.62 MW ex. have been installed in the country thereby utilizing only 1.8%
of the potential that exists.

27. ADVANTAGES OF NON-CONVENTIONAL
ENERGY TECHNOLOGIES
• Non-conventional/renewable energy is an indigenous source available in
considerable quantities to all developing nations and capable, in principle of
having a significant local, regional or national economic impact.
• There is a great scope of research and development in non-
conventional/renewable energy sectors regarding its future development and
scientific utilization.
• The power plants based on renewable do not have any fuel cost and hence
negligible running cost.
• Renewable have low energy density and more or less there is no pollution or
ecological balance problem. Provide energy in environmentally benign
manner.
• The use of non-conventional/renewable energy could help to conserve foreign
exchange and generate local employment if conservation technologies are
designed, manufactured, assembled and installed locally.
• Short gestation period and low investment.
• https://www.ibef.org/industry/renewable-energy/showcase

28. Commercial usage and role of natural resources in
the development of commerce.
https://www.youtube.com/watch?v=nQLDcwNmw3A

29. Unit 3 - Role of Industries and Geographical
significance (Indian Context)
Role of Industries in the economic
development and factors affecting
Industrial location.
Business locations and its geographical
implications
Location – Need and Importance
Limitations to local localization process
and sourcing of location
Rural and Handicraft Industries –
Economic and Commercial importance

30. Role of Industries in the economic
development
Modernisation of Industry
Development of Science and Technology
Capital Formation
Industrialisation and Urbanisation
Self-reliance in Defence Production
Importance in International Trade
Use of Natural Resources
Alleviation of Poverty and Unemployment
Main Sector of Economic Development
Fast Growth of National and Per Capita Income
Sign of Higher Standard of Living and Social Change
https://www.economicsdiscussion.net/articles/role-of-industrial-development-in-economic-
growth/2227
Factors affecting Industrial location
• Power supply.
• Communications - including
transport, telecommunications.
• Labour supply - including
workers with the right skills.
• Access to market - where the
goods are sold.
• Grants and financial incentives -
usually from governments.
• Raw materials

31. Capital Formation
• Stock Exchanges – NSE and BSE, NCDEX
• Shares -
NSE
Kapil Ketaki Sakshi
TATA
BSE

32. Business locations and its geographical implications
• https://www.tatasteel.com/corporate/our-global-footprint/
• https://stock-financials.valuestocks.in/en/hul-company-location
• https://www.hul.co.in/news/news-and-features/2013/six-hul-
factories-recognised-at-the-india-manufacturing-excellence-
awards.html

33. Location – Need and Importance
Production facilities
Cost
Economy
Communication
Resources – Human and Inhuman
Market availability
Technology
Society
Local Politics
Culture

34. Rural and Handicraft Industries – Economic and
Commercial importance
• Handicrafts can be defined as products which are produced either completely
by hand or with the help of tools.
• Mechanical tools may be used as long as the direct manual contribution of
the artisan remains the most substantial component of the finished product.
• Handicrafts are made from raw materials and can be produced in unlimited
numbers.
• Such products can be utilitarian, aesthetic, artistic, creative, culturally
attached, decorative, functional, traditional, religiously and socially symbolic
and significant.
• Images

35. Rural industries
• 1) Cotton weaving,
• 2) Silk weaving,
• 3) Carpet making,
• 4) Leather industry
• 5) Metal handicrafts
• 6) Pottery
• 7) Domestic Food Items
• 8) Bara Bulutedars etc.

36. Economic and Commercial importance of Rural
Industries
In rural areas, the business operates towards different industries, which
are agriculture, forest, and handloom industries.
The people lived in different areas of rural India master in unique skills.
Such as the rural people living in Kerala, they have professional skill in
carving wood, the other rural people proficient in weaving carpet live in
Kashmir, there are various skills from place to place is because of the
factors of resources and traditions.
Besides, in India, the agricultural is vital for the economy because it
accounts for 44.5% of GDP from 1970 to 1971 and offers 68% of
rural employment.
However, the agriculture sector shrunk to 16.1% of GDP in 2009 while
the proportion of non-agricultural industry achieved 86% of the GDP.

37. • Animal Feed Industry
• Appliances Industry
• Automotive Industry
• Bakery Industry
• Bauxite Mining
• Beverage Industry
• Biofuel Industry
• Biomass Energy
• Building Materials Mining
• Cable Manufacturing Industry
• Cement Industry
• Ceramic Industry
• Chemical Intermediates Industry
• Chocolate Industry
• Coal Mining
• Coffee and Infusion Industry
• Computing Software
• Concrete Industry
• Copper Mining
• Dairy Industry (63) Desalination Industry (3) Diamond Mining (3) Electronics Industry (27) Fabrics Industry (59) Fertilizer Industry (49) Fishing
Industry (14) Fluorspar Mining (3) Footwear Industry (8) Fossil Fuels Energy (444) Frozen and Ready Meals (29) Fruit and Vegetable Industry (34) Garment
and Accessories Industry (71) Gemstone Mining (1) Glass Industry (35) Gold Mining (7) Grain Industry (77) Household Chemical Industry (57) Hydro
Energy (993) Inorganic Chemical Industry (42) Iron and Steel Industry (250) Insulation Industry (2) Land Based Weapons Industry (28) Iron
Mining (59) Logistics (115) Machinery Industry (378) Meat Industry (11) Naval Military Industry (3) Nuclear Energy (19) Oil Refining (22) Oil and
Gas (9) Other Metals and Alloys (22) Other Metal Mining (33) Other Petrochemical Industry (302) Paint and Coating Industry (28) Paper
Industry (97) Pesticide Industry (32) Pharmaceutical Industry (323) Phosphate Mining (1) Plastics Industry (95) Ports (109) Solar Energy (342) Sugar
Industry (641) Synthetic Fiber Industry (39) Rubber and Adhesives Industry (25) Salt Industry (3) Shipbuilding (24) Research and Development (24) Tanning
Industry (3) Vegetable Oil Industry (84) Waste to Energy (3) Wind Energy (14) Uranium Mining (7) Wood Industry (17) Zinc Mining (10) Tobacco
Industry (15) Telecommunications (20) Textile Fiber Industry (124)

38. Unit 4 - Trade and Transportations (Global Context)
Role and Importance
of Trade
Importance of
transportation in
commercial
development –
Salient features,
Merits and
limitations.
Types of modes of
transportation –
Roadways, Railways,
Airways, Seaways
and types of trade
routes – Silk route,
CPCC etc
New trends in the
means and modes of
transportation.

39. Importance of trade
1. Make use of abundant raw materials
Some countries are naturally abundant in raw materials – oil (Qatar), metals, fish (Iceland), Congo (diamonds) Butter (New Zealand). Without trade, these
countries would not benefit from the natural endowments of raw materials.
A theoretical model for this was developed by Eli Heckscher and Bertil Ohlin. Known as the Heckscher–Ohlin model (H–O model) it states countries will
specialise in producing and exports goods which use abundant local factor endowments. Countries will import those goods, where resources are scarce.
2. Comparative advantage
The theory of comparative advantage states that countries should specialise in those goods where they have a relatively lower opportunity cost. Even if one
country can produce two goods at a lower absolute cost – doesn’t mean they should produce everything. India, with lower labour costs, may have a
comparative advantage in labour-intensive production (e.g. call centres, clothing manufacture). Therefore, it would be efficient for India to export these
services and goods. While an economy like the UK may have a comparative advantage in education and video game production. Trade allows countries to
specialise. More details on how comparative advantage can increase economic welfare. The theory of comparative advantage has limitations, but it explains
at least some aspects of international trade.
3. Greater choice for consumers
New trade theory places less emphasis on comparative advantage and relative input costs. New trade theory states that in the real world, a driving factor
behind the trade is giving consumers greater choice of differentiated products. We import BMW cars from Germany, not because they are the cheapest but
because of the quality and brand image. Regarding music and film, trade enables the widest choice of music and film to appeal to different tastes. When the
Beatles went on tour to the US in the 1960s, it was exporting British music – relative labour costs were unimportant.
Perhaps the best example is with goods like clothing. Some clothing (e.g. value clothes from Primark – price is very important and they are likely to be
imported from low-labour cost countries like Bangladesh. However, we also import fashion labels Gucci (Italy) Chanel (France). Here consumers are
benefitting from choice, rather than the lowest price. Economists argue that international trade often fits the model of monopolistic competition. In this
model, the important aspect is brand differentiation. For many goods, we want to buy goods with strong brands and reputations. e.g. popularity of Coca-
Cola, Nike, Addidas, McDonalds e.t.c.

40. 4. Specialization and economies of scale – greater efficiency
Another aspect of new trade theory is that it doesn’t really matter what countries specialise in, the important thing
is to pursue specialisation and this enables companies to benefit from economies of scale which outweigh most
other factors. Sometimes, countries may specialise in particular industries for no over-riding reason – it may just
be a historical accident. But, that specialisation enables improved efficiency. For high value-added products,
multinationals often split the production process into a global production system. For example, Apple designs
their computers in the US but contract the production to Asian factories. Trade enables a product to have multiple
country sources. With car production, the productive process is often even more global with engines, tyres, design
and marketing all potentially coming from different countries.
5. Service sector trade
Trade tends to conjure images of physical goods import bananas, export cars. But, increasingly the service sector
economy means more trade is of invisibles – services, such as insurance, IT services and banking. Even in making
this website, I sometimes outsource IT services to developers in other countries. It may be for jobs as small as
$50. Furthermore, I may export a revision guide for £7.49 to countries all around the world. A global economy
with modern communications enables many micro trades, which wouldn’t have been as possible in a pre-internet
age.
6. Global growth and economic development

41. Problems arising from free trade
• Given the importance of free trade to an economy, it is unsurprising that people are concerned about
the potential negative impacts.
• Infant industry argument. The fear is that ‘free trade’ can cause countries to specialise in primary
products – goods which have volatile prices and low-income elasticity of demand. To develop,
economies may need to restrict imports and diversify the economy. This isn’t an argument against
trade per se, but an awareness trade may need to be ‘managed’ rather than just rely on free markets.
• Trade can lead to cultural homogenization. Some fear trade gives an advantage to multinational
brands and this can negatively impact local produce and traditions. Supporters argue that if local
products are good, they should be able to create a niche than global brands cannot.
• Displacement effects. Free trade can cause uncompetitive domestic industries to close down,
leading to structural unemployment. The problem with free trade is that there are many winners, but
the losers do not gain any compensation. However, free-market economists may counter that some
degree of creative destruction is inevitable in an economy and we can’t turn back to a static closed
economy. On the upside, if the uncompetitive firms close down, ultimately new jobs will be created
in different industries.

42. Importance of transportation in commercial
development
• Transport System and Economic Development in India
• A good transport system can broaden the market for goods. It can also
make the movement of raw materials, fuel, equipment, etc. to the
places of production easy.
• Further, it opens up remote regions as well as resources for
production. Also, as transport facilities increase, the demand for motor
vehicles, locomotives, ships, etc. increases too.
• This leads to the start of industries which specialize in these goods.
let’s take a quick look at the transport system and understand how it
contributes to the economic development in India.

43. Types of modes of transportation –
Roadways, Railways, Airways, Seaways
• https://www.goship.com/blog/modes-of-transportation-in-logistics/
• https://transportgeography.org/contents/chapter5/transportation-
modes-modal-competition-modal-shift/
• https://www.ihmnotes.in/assets/Docs/Ignou/TS-
01/Unit8%20Mode%20of%20Transport.pdf

44. types of trade routes – Silk route, CPEC etc
The Silk Route was a historic trade route that dated from the second century B.C. until
the 14th century A.D.
It stretched from Asia to the Mediterranean, traversing China, India, Persia, Arabia,
Greece, and Italy.
It was called the Silk Route because of the heavy silk trading that took place during that
period. This valuable fabric originated in China, which initially had a monopoly on silk
production until the secrets of its creation spread.
In addition to silk, the route facilitated the trade of other fabrics, spices, grains, fruits and
vegetables, animal hides, wood and metal work, precious stones, and other items of
value.

45. Silk Route
• The Silk Route was a series of ancient trade networks that
connected China and the Far East with countries in Europe and the
Middle East. The route included a group of trading posts and
markets that were used to help in the storage, transport, and
exchange of goods. It was also known as the Silk Road.
• Travelers used camel or horse caravans and stayed in guest houses
or inns typically spaced one day’s travel apart. Travelers along the
Silk Route’s maritime routes could stop at ports for fresh drinking
water and trade opportunities. Archaeologists and geographers
pursuing research of ancient sites have been the Silk Route’s most
modern travelers.
• https://www.khanacademy.org/humanities/world-history/ancient-
medieval/silk-road/v/early-silk-road

46. CPEC- China-Pakistan Economic Corridor (CPEC)
• China-Pakistan Economic Corridor (CPEC), massive bilateral project to
improve infrastructure within Pakistan for better trade with China and to further integrate the
countries of the region.
• The project was launched on April 20, 2015 when Chinese President Xi Jinping and
Pakistani Prime Minister Nawaz Sharif signed 51 agreements and Memorandums of Understanding
valued at $46 billion.
• The goal of CPEC is both to transform Pakistan’s economy—by modernizing its road, rail, air, and
energy transportation systems—and to connect the deep-sea Pakistani ports
of Gwadar and Karachi to China’s Xinjiang province and beyond by overland routes. (Xinjiang
borders the countries of Mongolia, Russia, Kazakhstan, Kyrgyzstan, Tajikistan, Afghanistan,
Pakistan, and India, and the ancient Silk Road ran through its territory.)
• This would reduce the time and cost of transporting goods and energy such as natural gas to China
by circumventing the Straits of Malacca and the South China Sea. The announcement of joint space
and satellite initiatives between Pakistan and China, spurred by CPEC, followed in 2016.
• CPEC is part of the larger Belt and Road Initiative—to improve connectivity, trade, communication,
and cooperation between the countries of Eurasia—announced by China in 2013.
• CPEC has been compared to the Marshall Plan for the rebuilding of post-World War II Europe in
its potential impact on the region, and numerous countries have shown interest in participating in
the initiative.
• https://www.youtube.com/watch?v=LU58TnhldX0
• https://www.youtube.com/watch?v=zddW1oUhOjs

47. • Thank You!