Indian Investment And Trade : India Essay

There is no doubt that increasing in international trade is supporting the economic growth across the world, raising incomes and creating jobs. However, international trade can also some create economic obstacles, such as the international context and the market policy and regulations of each country, and consequently it can be said that the effects would have positive and negative sides, and it is useful to mention all of them and to take them into consideration.

Trading is very important economic factor. Trade between different countries depends upon different factors. There are some factors due to which bilateral trade between two states is enhanced. On contrary, there are some factors which restrict or reduce the trade between two countries (Meyer, 2011). Factors which enhance trade include different cultural, political, geographic and economic aspects which are common between the 2 countries involved in bilateral trade with each other. While trade is reduced or restricted, if two countries are completely different culturally, politically, geographically and economically (Siegel, 2011). For example, trade between two countries, having common boarder, currency, per capita income et cetera, will be lot more high than those countries which do not share these factors common with each

Together China and India attributed to prosperity and there are mutual economic benefits. Both countries have formed stronger economic bonds. They have openly cooperated with one another in multi-lateral trade negotiations. As emerging economies continue to grow, there may be a further decline in the share of world output and world exports accounted for by the

In the midst of the help from the extremely advanced transportation, modern production methods, rapid industrialization and the increasing facilities of outsourcing of trade and services the international trade organization is increasing and decreasing very fast in the globe. The international trade account has a good distribute of a country’s gross on domestic product. It is in addition one of most important foundations of income designed for the developed as well as to developing country. For the reason that of many country benefits from the international trade approximately every one in the

Several growth factors contribute to India’s burgeoning national and global economic presence. Having the largest population of youth on the planet means that India’s workforce is surging, especially in the areas of agriculture and manufacturing. The nation’s growth in production, income, and education leads to a rising middle class consumer base. Finally, the growth of India’s economy is facilitated by political leadership changes and government initiatives that favor an open economy and global competition.

India and China are the two new powerhouses of the world economy. The centre of gravity of the world economy is the geographical hotspot which is forecasted to shift to a location firmly between India and China by 2030. The nature of imports is likely to shift away from low value goods towards high value add goods such as cars, technology and office equipments. Chinese demand for steel is expected to grow, this means that China may be moving beyond the era of speedy industrialization and into a more service-oriented phase. The industrialization in India has just started and would take twenty years of growth at 15 percent per year for India’s refined metal consumption to overtake china’s ongoing level of consumption (World Bank, 2012).

Firstly, International trade is the trading of products and ventures crosswise over worldwide outskirts. It makes the economy to make utilization of the characteristic assets for the creation of merchandise and how it 's most appropriate. It has been discussed that international trade arises when a country specializes in the production of certain goods and thus it produces more than what is needed to supply the domestic demand and therefore it exports the surplus (Collings, 1929). Also, it empowers a nation to acquire products are not produced in the economy as it may be expensive by bringing in from different nations at lower costs. Another thing is that it increases efficiency due to the international competition, each producer tries to produce the better quality goods (Collings, 1929). On the other hand, international trade may have a negative

In 2013 the total exports for India was at $313.2 billion whereas the import stood at $467.5 billion (CIA, 2014). India followed the Adam Smith model producing only what it was efficient at and imported the rest. There started a reversal in capital inflows which hit the export demand and posted a crunch in the domestic markets leading to a decline of more than 2% in India’s GDP in the fiscal year 2008-2009 (Kumar & Vashisht, 2009). In 2008 India was already experiencing a high inflation rate, which reduced expenditure in the country. To address the crisis and its affects the Indian government and the banks introduced fiscal stimulus and relaxed monetary policies in order to boost domestic demand. The market interest rates increased to 20% and above suddenly. India had received a fiscal stimulus of $80 billion injected into the economy to ensure liquidity. India was loosing badly on FDI’s and remittances. During 2008, India’s FDI inflows experienced a negative growth of 2% (Kumar & Vashisht, 2009). Remittances also are a major part of the capital inflows of the country, in 2008 the remittance inflow declined by more than 29% (Kumar & Vashisht, 2009) as every country first wanted to protect jobs of its home citizens and there was a severe lay off. Exports to USA is a major component of India’s GDP. After a sharp decline in the demand from the US, India had to lay off more than 300,000 workers instantly. There was a decline in exports of India by

The economy of India is a creating blended economy. It is the world's 6th biggest economy by ostensible Gross domestic product and the third-biggest by obtaining power equality (PPP). The nation positions 141st in per capita Gross domestic product (ostensible) and 123rd in per capita Gross domestic product (PPP). After 1991 financial progression, India accomplished 6-7% normal Gross domestic product development every year. The long-term growth prospective of the Indian economy is positive due to its young population, corresponding low dependency ratio, healthy savings and investment rates, and increasing integration into the global economy.

China and India play a crucial role in the world economy, molding and shaping the global markets, despite the differences in the methods of attaining such global prominence. These differences may appear to set the two countries apart completely, but China and India share a number of similarities. Despite having semblable population curves and similar domestic issues, India has been unable to match China’s economic success because of its limited production and distribution capabilities, but its steady investment in its economy appears to give India the advantage for being a superpower in the future.

Within the wider national context, the analysis of the trade deficit has multiple applications. For instance, it allows policy makers to assess the size of imports and exports and to develop and implement policies that support national interests. Within the increasingly globalized market place, the countries are

One study by Sharma(2003) examine the relationship between export and economic growth in India by using the time series data from 1971 to 2001. This study test the export led hypothesis for India

India and Russia shares a strong strategic, military, economic and diplomatic relationships post-cold war and even after the disintegration of the USSR. Initially this international relationship was based on 5 major elements: Politics, Defence, Civil, Nuclear energy and Anti-Terrorism & Space. However in recent years, Economic factor has grown its importance between both the countries in the form of trade.

Later that year, Brazil saw a brisk rise in inflation and a slow growth of domestic market. This led Brazil to a balance of payment shortcoming since there were more import goods rather than exports. Because of this flaw, there have been a lot of government’s intervention in the market. But such intervention could not fix the failure in the market and the import goods were still exceeding. This period of industrialization in Brazil is viewed as the background of the later decline of its regular commodities exports. Within the similar period, India also adopted the substitution industrialization policy.

The Foreign Trade Policy 2009-14 of the Govt. of India is a “holistic strategy, driving export growth to new markets and addressing issues of labour-intensive export and intensive export and transaction cost effectively.”