Export Led Growth of India

Some Major benefits of international trade include the reduction of poverty, expansion of business opportunities for local companies and reduces costs for consumer.

Foreign demand for a primary product may also limit economic growth as demand for a particular commodity will cause an increase in demand for a country’s currency, thus resulting in the appreciation of the currency. This would reduce the competitiveness of the country’s manufactured exports, thus leading to a decrease in the financial resources gained from exports which could have enabled the country to raise the level of economic welfare to encourage development.

For small developing countries unable to manufacture necessary items the world market presents an opportunity to obtain those items. Even being able to subsidize a country's food resources or modernize a country's food production can change an entire nation's economy. For countries who have an abundance of certain resources being able to trade them

Several theories exist that take different approaches on what imports and exports would produce the best outcome for a given country. Countries have to specialize on certain goods in order to have a strong impact in the global trade. Many have argued that imports can have a negative impact on domestic products. Even though this is true, I believe that promoting free trade will improve the U.S. economy in the long run and that the benefits outweigh the costs.

Engaging in international trade is an effective stimulation of economic growth. David Ricardo’s principle of comparative advantage argues while nations involved in international trade, a country will become specialised in producing a product that has the lowest relative costs. (Economist, 2015) By focusing on the production onto a limited scope of product or industries, firms or the nation will experience rise in productivity due to higher efficiency in allocation and utilisation of resources. As the process of specialisation will cause reallocation of other less efficient resources, nations, as a result, will import products that are less efficiently produced from other countries. While different nations specialising in different goods and services, a greater variety and cheaper products will become available for consumption, improving the quality and quantity of consumption by all nations. To determine whether developing nations are experiencing disadvantage in the international trade, it requires a careful examination with Porter’s Diamond factor endowments. It analysis a nation 's competitiveness under four categories: factor endowments, demand condition, related and supporting industries and firm strategy, structure and rivalry.

Increase efficiency of production factors. Specializing in goods which can report a real comparative advantage over other countries make that country to increase its production possibilities. Increasing wealth and employment.

Trade among nations via the use of comparative advantage promotes growth, which is attributed to a strong connection between the openness of trade flows and the affect on economic growth and economic performance. Additionally there is a strong positive

Higher incomes, lower unemployment, decreased government borrowing, increased investment, and improved standard of living, generally accompany economic growth. Developing countries strive to foster effective strategies that will allow them to achieve economic growth. South Korea has been known as the model for economic growth. They transformed themselves from an underdeveloped country to one of the world’s most thriving economies. Many countries have tried to imitate the South Korean model as a means of having rapid growth. This paper will show, that a good base for economic growth can be formed through an export oriented led strategy, an improvement in the labor force, and slight involvement by the government.

International trade indicates a large part of the economic research of production growth. Market size has grown from exports of a companies’ products. By exporting a company learns about the foreign markets. The company may gain some expertise from feedback they obtain from the buyer. This is called the learning-by-exporting theory.

It can be seen that the growth of trade has led into the rapid economic growth in some countries. The reasons of rapid growth in world trade is due to the reduction of trade barriers at global and regional level. The country also can gain from trade for some reasons. Firstly, trading leads the country to produce and consume at prices which differ from those international market does, so if the price in international market is more expensive,

In contrast, the lack of economic growth in the poorest countries of the world has meant that living conditions for hundreds of millions of people are appalling by the standards of rich countries; per capita income levels in many 21st-century countries are much lower than they were in 19th-century.To understand why the human race has become so much wealthier and why our wealth is shared so inequitably among the inhabitants of the world, we need to understand what drives economic growth.

The world today (or at least most of the “developing” part) is being lead by chief institutions like the World Bank, International Monetary Fund and the United Nations and its subsidiaries, with the one central point of discussion – economic growth and development of the “poor” countries. The past few decades have witnessed major ups and downs in the economies. While some countries have experienced shrinking incomes (Zambian per capita income figures in early 1990’s as compared to 1960s (Easterly, 2002, p.42)), some have experienced a substantial increase (East Asian NICs, India, China, etc). The debates on why some countries are poor while some are significantly more prosperous and why some countries grow faster than the others have long puzzled economists while the answer to it is still quite inconclusive. Evsey Domar in his 1946 paper himself referred to ‘the rate of growth’ as ‘a concept which has been little used in economic theory’. However, much effort has been made since then to explain the process of economic growth and the determinants for it, based on which many growth theories have emerged in which Domar himself had a major role to play. While many growth theories that have been developed since, this essay will focus on a few of the classical models, the Swan-Solow neoclassical model and the “new” growth theories, discussing their relevance with present developing economies.

The importance of international trade in the world has been widely studied and also examines the role of international trade in the various issues. Mainly my paper focused on the relationship between Economic Development and international trade, disadvantages of international trade also discussed. International trade is an activity of strategies importance in the development process of a developing economy. International specialization means that different countries of the world specialize in producing different goods. Trade policy formulation and implementation covering issues such as tariffs, incentives, quotas, taxes, customs and administration, subsidies, rules of origin, public procurement regimes, aid and investment, export promotion, trade facilitation and diversification. The role of foreign trade in achieving a quicker pace of economic development is thus well recognized. Hence, planning of foreign trade cannot be divorced from the strategy of overall development. The disadvantage of international trade is that the welfare of the people in nations that produce goods and services is sometimes ignored for the sake of profits. In conclusion it can be said that, international trade leads to economic growth provided the policy measures and economic infrastructure are accommodative enough to cope with the changes in social and financial scenario that result from it.

“At the center of economics is the idea that people make purposeful choices with others when they make these choices” (Taylor & Weerapana, 2012). That is what many developing countries are trying, to become world players in the global economy, including India. India being a developing country, it is a nation that has a very low standard of living, an undeveloped industrial base, and low life expectancy rates. The worldwide business is about rate, to turn into a rival in this race for business sector power. A country must be rapid in its generation, item creation, client administration, data, choices, operation cycles, and authority in the country. Without that force of speed, that country will be trailing behind different countries that

Present paper utilizes the annual data of GDP, Indian FDI, level of Investment and Export in real terms from the period 1989/90 to 2013/14. The concerned variables are transformed into logarithm and hereafter these are denoted by 〖LnGDP〗_t,〖LnFDI〗_t 〖LnI〗_t and 〖LnX〗_t .