Impact Of Foreign Trade On India

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IMPACT OF FOREIGN TRADE ON INDIAN ECONOMIC GROWTH-WITH RESPECT TO GROSS DOMESTIC PRODUCT (GDP) ABSTRACT The most significant determinants of economic development in a country are foreign trade. The Foreign Trade of a country consists of inward and outward movement of goods and services, which result into outflow and inflow of foreign exchange from one country to another country. This main purpose of this study is to analyze the impact of foreign trade on Gross Domestic Product of India using annual data from 2004-2005 to 2013-2014.Relevant data were collected from the reports of Ministry Of Commerce. Data were analyzed by using statistical tools. The analysis revealed that there is a significant impact posed by foreign trade on Gross…show more content…
Hence, a study has been made to identify the growth and composition of foreign Trade of India and its impact on Gross Domestic Product during the recent decade. Review of literature: Rajesh K.Pillania (2006)1 in his study “An Exploratory study of Indian Foreign Trade” analyzed the growth of Indian economy and foreign trade from 1950-51 to 1999-2000. The author stated that, Indian exports have come a long way in value terms from the time of gaining independence in 1947. The total value of India’s merchandise exports increased from US $ 1.3 billion in 1950-51 to US $ 62.8 billion in 2003-2004 with a compound rate of 7.5 per cent. The composition of trade is now dominated by manufactured goods and services. The author, with the help of economic theories concluded that there is huge untapped potential for Indian foreign trade in years to come. Oscar Afonso (2002)2 in his study “The Impact of International Trade on Economic Growth” the researcher analyzed the impact of commercial and technological aspects, resulting from International trade on the physical accumulation and quality of productive factors. The study found out that during the classic period the theory of economic growth and the theory of international trade constituted two inseparable branches of economics. It was believed that international trade has a positive effect on the economic growth. During the neo-classic period these two theories became autonomous relatively
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