Transport, Communication and Trade
Transport, communication and trade link production and consumption across space. The exam tests modes, network concepts, trade classification and simple trade arithmetic.
Core rules
- Transport modes differ in cost, speed, capacity and flexibility: roads for short hauls and door-to-door service; railways for bulky long-distance freight; waterways for heavy, slow cargo; air for high-value, perishable goods.
- Communication moves information, not goods; it can substitute for some travel but often complements it.
- Trade may be bilateral or multilateral, free or protected; visible trade is goods, invisible trade is services.
- Balance of trade = value of exports minus value of imports. A deficit is negative; a surplus is positive.
Worked example
A country exports goods worth ₹500 crore and imports goods worth ₹650 crore. Balance of trade = 500 minus 650 = minus ₹150 crore, a trade deficit. This is not the same as the balance of payments, which also records services, transfers and capital flows.
Traps
Do not equate balance of trade with balance of payments. Do not count services as visible trade. Low transport cost does not guarantee trade: complementarity and demand are also required. Do not assume all communication reduces transport; e-commerce still needs delivery.