1. Impact of Fii on Indian Economy
Institute of Professional Education and Research Macro Economics Assignment On Foreign Institutional Investment (FII) Submitted Toâ Submitted
Byâ Dr. A.K. SharanNasir Jalal Roll No.â 29 ABSTRACT Most of the under developed countries suffer from low level of income and capital
accumulation. Though, despite this shortage of investment, these countries have developed a strong urge for industrialization and economic
development. As we know the need for Foreign capital arises due to shortage from domestic side and other reasons. Indian economy has experienced
the problem of capital in many instances. While...show more content...
Fitz Gerald (1999) observed that the large and sudden reversals of foreign equity investments make them extremely volatile in character. The securities
markets in developing countries are typically narrow and shallow, and therefore, participation of foreign portfolio investors may, a priori, induce
considerable instability in these markets. Executive Summary Foreign institutional investors have gained a significant role in Indian capital markets.
Availability of foreign capital depends on many firm specific factors other than economic development of the country. In this context this paper
examines the contribution of foreign institutional investment particularly among companies included in sensitivity index (Sensex) of Bombay Stock
Exchange. Also examined is the relationship between foreign institutional investment and firm specific characteristics in terms of ownership structure,
financial performance and stock performance. It is observed that foreign investors invested more in companies with a higher volume of shares owned
by the general public. The promoters' holdings and the foreign investments are inversely related. Foreign investors choose the companies where family
shareholding of promoters is not substantial. Among the financial performance variables the share returns and earnings per share are significant factors
influencing their investment decision. OBJECTIVES The main objective of this assignment is to through light on FIIs into Indian economy in
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2. Introduction Indian economy had experienced major policy changes in early 1990s. The new economic reform, popularly known as, Liberalization,
Privatization and Globalization (LPG model) aimed at making the Indian economy as fastest growing economy and globally competitive. The series
of reforms undertaken with respect to industrial sector, trade as well as financial sector aimed at making the economy more efficient. With the onset
of reforms to liberalize the Indian economy in July of 1991, a new chapter has dawned for India and her billion plus population. This period of
economic transition has had a tremendous impact on the overall economic development of almost all major sectors of the economy, and its effects over
the last decade...show more content...
The Department has also strengthened investment facilitation measures through Foreign Investment Implementation Authority (FIIA). Non Resident
Indian Scheme the general policy and facilities for foreign direct investment as available to foreign investors/ Companies are fully applicable to
NRIs as well. In addition, Government has extended some concessions especially for NRIs and overseas corporate bodies having more than 60%
stake by NRIs Throwing Open Industries Reserved For The Public Sector to Private Participation. Now there are only three industries reserved for the
public sector Abolition of the (MRTP) Act, which necessitated prior approval for capacity expansion The removal of quantitative restrictions on
imports. The reduction of the peak customs tariff from over 300 per cent prior to the 30 per cent rate that applies now.пРWideâranging financial
sector reforms in the banking, capital
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3. Indian Economy After Independence : India
India is rich in natural resources and labor which has helped India progress after attaining independence from British rule in 1947. The purpose of this
research paper is to trace the Indian economy after independence. India is the largest democracy in the world with a stable democratic government.
Recently, India has elected a new prime minister, Narendra Modi who took office in the year 2014. (India Today). The new government in India is
credited with reviving the economy and strengthening India's foreign policy. Corruption, poor infrastructure, and economic shortages are a drag on
development, but with lower global oil prices, the economy has been sustaining a growth rate of about 7 percent. (Finance. Yahoo) furthermore, Modi
has opened the defense and insurance sectors to private investment as well making the government forces stronger and advancer. India's growth is
below potential because of the corruption in the government. India is set to emerge as the world's fastestâgrowing major economy by 2025 ahead of
China, as per the recent report by The World Bank. However, the inconsistent policies make it harder for the nation to progress economically as well as
politically. This paper will analyze the current growth in the economy of India and the outlook for the nation in the longer term.
The Indian economy has been a journey of evolution starting form agriculture and farming to heavy industrialization and transportation. Central
government planning's led to more
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4. Essay On Growth Of India
spirations of its young population. India is one of the youngest nations in the world where the ratio of youth is higher in its population, with more than
54% of the entire population under 25 years of age and over 62% of the population inside the working age group (15â59) in According to the census
2011India}. The country's population pyramid is anticipated to bulge across the 15â59 age groups over the next decade. This demographic advantage is
predicted to last only until 2040. A World Bank report states that India is one of the few countries where working population continues to grow till
2050 [7]. With an annual addition of 9.25 million jobs per year, over 37 million jobs are expected to be created from 2012â13 through 2016â17 [8].
...show more content...
There have been efforts on the part of the state and Centre government through Ministry of Rural improvement to skill and train youths under diverse
government schemes. However, most of those schemes are restrained to the youths beneath Poverty Line (BPL). There should be equal opportunities
for all the people residing in rural areas. Every job aspirant should be given equal importance and would be given training in soft skills to lead a
proper and decent life. For the Balanced growth in all the sectors the Goal of national policy and programs on skill improvement have has to
diversification of economic activities, minimizing the dependence of rural households on agriculture and bringing approximately a sizable increase in
the share in both output and employment of allied activities, rural industries, business and provider components of the agricultural economic system.
To bring about a fast and sustainable economic development thru diverse reforms, the rural development initiatives should sharply cognizance on
human's participation and rural corporations as the key attributes for their success followed through equally important elements, idea of integrated
development, growth center technique, planning process technique, communication system to
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5. Effect of Rising Oil Prices on Indian Economy
A rise in global oil prices by $ 10 per barrel would reduce India's economic growth by 0.2 percentage points and also affect the country's current
account deficit, Goldman Sach said.
"A VAR (valueâatârisk) analysis suggests that a $ 10 increase in oil would reduce GDP growth by 0.2 percentage point," Goldman Sachs said in its
latest edition of 'Asia Economics Analyst'.
India on Monday voiced serious concern over the rising crude oil prices, which have touched a twoâyear high, and said it could badly affect global
economic growth and even give rise to inflationary pressures.
"The current oil prices will spur global inflation and retard economic growth. India feels that this is the concern that needs to be addressed on priority,"
Minister...show more content...
In this background, I found it reassuring to come across opinions from two unrelated quarters questioning the connection.
CONFIDENT ASSERTION
There is first the confident assertion of the Chairman and Managing Director of Indian Oil Corporation (IOC), Mr R. S. Butola, that the impact of
higher crude prices need not always be severe, and can, in fact, be circumvented by means of some ingenious countervailing measures.
The IOC seems to have achieved this by carrying out crash modernisation and upgradation of plants and shifting the dominant part of its business plan
to petrochemicals.
For instance, by using modern processes, IOC has been able to convert many black products into highâvalue fuel such as LPG and petrol, significantly
raising the company's distillate yield from 71.5 per cent in 2004â05 to 75.4 per cent in 2010â11, and thereby extracting more highâvalue products from
every barrel of crude.
A recent IMF working paper (No.11/194) "Oil shocks in a global perspective: Are they really that bad?" is a scholarly exposition downplaying the
6. gloomy prognostications associated with surging oil prices. The importance of the paper is that it almost exclusively focuses on the economies of
developing countries.
It goes into the relationship between oil prices and macroeconomic fundamentals, including economic output and value and volume of international
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7. India 's Development And Growth Essay
Background: India is one of the most popular countries in the world. Geographically, India is located at the south of the Asian continent. India's
development and growth has been one of the most significant accomplishments in recent times. India neighboring countries include Pakistan, Nepal,
Bangladesh, Sri Lanka, Myanmar, and Bhutan. The size of the population in India is 1,266,883,598 and the Territorial size of the country is 3, 287,
263 sq. km (The World Factbook, 2016). The prime minister of India is known as Narendra Modi who is the leader of the majority party in Lok
Sabha and is currently the head of the Council of ministers in India. India's political party that is in power right now is Bharatiya Janata Party. The
Bharatiya Janata Party, was first founded by Shyama Mukherjee in 1953 with the main purpose of safeguarding the Hindu interests in India (The
World Factbook, 2016). India is becoming more of an open market economy. While most emerging nations were have struggled mightily against the
strong U.S. dollar and falling commodity prices, India continues to lead. The view for India's longâterm growth is positive due to the staggering young
population and corresponding low dependency ratio (World Factbook, 2016). For example healthy savings, investment rates, and increasing integration
play a role in the global economy. India being the 4th largest economy in the world, India has bought about a landmark agricultural revolution that has
changed the country
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8. The Economic Growth Of India Essay
Introduction
India has experienced lopsided growth across its major sectors especially after the reform process have been initiated in the early 1990s. Studies show
that if the preâreform period is compared with the postâreform period, economic growth has definitely picked up in India. Given the structure of the
economy and the state of human capital availability reforms have led to the increase in share of the services sector at the expense of industrial and
agricultural sectors. On the other hand number of people living below the povertyâline has also come down during the postâreforms period. Problem is
most of the studies showed inequality in income distribution have actually increased in the postâreforms period.
West Bengal, with its broad customer base, rich mineral resources and large talent pool, could emerge as one of the leading states to drive the next
phase of industrialization in the country. The state is a gateway to East and North East, the region that produce 18.38% of India's GDP. Being
strategically positioned for bilateral trade with Bangladesh, Nepal, Bhutan, Myanmar and ready access to South East Asian countries, over and above
the domestic market, West Bengal enjoys a broader market for its products. A strong industrial base would also, in a way, help the state economy to
make a natural transition in its development quest from being primarily agrarian to industry driven, moderating the influence of lopsided growth
towards services on income
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9. Impact of Tourism on Indian Economy
Market Survey
By: Dr C. VETHIrAJAN
IMPACT OF TOURISM ON INDIAN ECONOMY
Tourism can generate maximum employment opportunity because of a large number of subsidiary industries.
September 2008 and a 3.3 per cent growth in passenger traffic through September. The negative trend intensified during 2009, exacerbated in some
countries due to the outbreak of the AH1N1 influenza virus, resulting in a worldwide decline of 4 per cent in 2009 to 880 million international tourist
arrivals, and an estimated 6 per cent decline in international tourism receipts.
Definition of tourism
Tourism is travel for recreational, leisure or business purposes. The World Tourism Organisation defines tourists as people who "travel to and stay in
places outside their...show more content...
Impact of India's economic growth on tourism
India is currently enjoying an economic boost and a successful financial system in place in our country has helped to build the image of brand India.
Some economists credit success of the Indian financial system to the income generated by the tourism segment, movements across the crosssection of
rising business opportunities, opening up of agricultural and educational sectors, and novel and attractive packaging for brandbuilding of India, which,
in turn, have benefited the travel industry as well. Besides this, strategic planning of excursion packages, ecoâtourism, sports events that bring the
spotlight on India and greater patronage by greater number of MNCs heading to our shores have contributed to the growth of the Indian economy and
thereby Indian tourism. The World Tourism Organisation reports that as many as 698 million people traveled to a foreign country in 2000, spending
over $478 billion while on tour. If India too had a share in these results, then surely the impact of the Indian economy as a contributor to the rising
world economy and on tourism cannot be ignored. More of free spending of disposable incomes, opening up of markets and better scope for
industrialisation and earning opportunities have led the way for India's economy to successfully launch the enhanced tourism sector.
JUne 2010
Growth of tourism in India
10. In recent years, tourism in India has
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11. India 's Effect On The Indian Economy
Multiplicity in Indian taxes has created complicated tax structure and has led to increase in the administration cost. To deal with this issue, the
empowered committee of state finance ministers led by Mr. Asim Dasgupta has proposed the need to shift to GST regime from the existing VAT
structure. This paper tries to analyze the impact of the proposed reform in the indirect tax system and whether it will boost the Indian economy by
improving TaxâtoâGDP ratio.
Introduction:
Direct as well as indirect taxes both form a major part of revenues to the Government. With India's tax to GDP ratio just under 15% as reported by
Moody's, it is a sign of worry for an emerging market like India. One of the main reasons behind India's poor performance is the presence of highly
inefficient indirect tax structure.
To rationalise the tax structure and to remove inefficiency in the taxation system, VAT was implemented by central government in the year 2005. It
was then seen as a major improvement over the preâexisting Central excise duty at the national level and Sales tax at the state level.But over the years,
various tax leakages have been discovered in the VAT system as a result of which contribution of indirect taxes to the GDP has declined. (See Exhibit
1) Implementation of Dual GST is seen as an ultimate indirect tax reform which will boost the country's economic structure.
Shift from VAT to GST
The multiâlayered indirect tax levied both at the Central and State level in India is
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12. The Economic Growth Of India Essay
INTRODUCTION
The economy of India is based on a sound financial system that helps in accelerating production, capital and economic growth of the country. One of
the main objectives of every financial system of modern economy to accumulate savings and to develop saving habits among the people. It also helps
the saving to allocate into productive usage such as trade and commerce. The efficient utilization and allocation of the savings helps in increasing the
economic growth of the country. A well organised financial system also helps in the industrial expansion. India is regarded as one of the big emerging
market economies by the World Bank along with china, Indonesia, Brazil and Russia. There has been tremendous financial development in India in the
year 1990. It is imperative to know that in what manner the financial development has taken place in India and what initiatives should be taken by the
country to emerge as a country with efficient financial sectors and markets.
HISTORICAL EVOLUTION OF FINANCIAL MARKET The financial system of the country is the outcome of its own peculiar historical evolution.
The continuous interaction between the players of the financial system and public policy interventions has given birth to the evolution of the financial
system. India began with the Central Bank and Reserve Bank of India and entrusted upon them the duty of regulating the banking sectors, Ministry of
finance were given the responsibilities of regulating the other financial
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13. Iyengar sanjay !
ENVIRONMENTAL DEGRADATION AND ITS EFFECT ON INDIAN ECONOMY
The environmental problems in India are growing rapidly. The increasing economic development and a rapidly growing population that has taken the
country from 300 million people in 1947 to more than one billion people today is putting a strain on the environment, infrastructure, and the country's
natural resources. Industrial pollution, soil erosion, deforestation, rapid industrialization, urbanization, and land degradation are all worsening problems.
Overexploitation of the country's resources be it land or water and the industrialization process has resulted environmental degradation of resources.
Environmental pollution is one of the most serious problems...show more content...
Nearly 12 million hectares of pasturelands are also substantially degraded. Thus, a total of 132 million hectares representing 40 per cent of the
country's total landmass have productivity well below their potential (Tejwani & Yadav, 1998).
Causes of land degradation
The main causes of land degradation are deforestation, ignorance of soil conservation practices, extension of cultivation to marginal lands, improper
crop rotation, imbalanced fertiliser use, surface irrigation ironically designed to increase land productivity, rapid growth in population, paucity of land,
economic pressures and poverty.
Air Pollution The World Health Organization estimates that about two million people die prematurely every year as a result of air pollution, while
many more suffer from breathing ailments, heart disease, lung infections and even cancer.Fine particles or microscopic dust from coal or wood fires
and unfiltered diesel engines are rated as one of the most lethal forms or air pollution caused by industry, transport, household heating, cooking and
ageing coal or oilâfired power stations. There are four reasons of air pollution are â emissions from vehicles, thermal power plants, industries and
refineries. The problem of indoor air pollution in rural areas and urban slums has increased. A latest example industrial pollution is the leak of
chlorine gas in Mumbai. On July 14, 2010 nearly 76 people were treated in
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14. Salient Features of Indian Economy
"Salient Features of Indian Economy
Promotion of Foreign Investment and Business"
PARTâII
Paradigm shift
There have been fundamental and irreversible changes in the economy, government policies, outlook of business and industry, and in the mindset of the
Indians in general.
1.From a shortage economy of food and foreign exchange, India has now become a surplus one.
2.From an agro based economy it has emerged as a service oriented one.
3.From the lowâgrowth of the past, the economy has become a highâgrowth one in the longâterm.
4.After having been an aid recipient, India has now joined the aid givers club. India has become a net creditor to IMF, since July 2003.
5.Although India was late and slow in modernization of industry in...show more content...
4.The foreign exchange reserves have reached a record level of US$ 116 billion as on 19th April, 2004. India is the sixth largest foreign exchange
holder in the world. This is remarkable considering the fact that the Forex reserves went under US$ one billion in 1991 before the economic reforms
started. The comfortable situation of forex reserves has facilitated further relaxation of foreign exchange restrictions and a gradual move towards
greater capital account convertibility.
5.Foreign Exchange Reserves (US$ 116 bn) now exceed Foreign Debt (US$ 112 bn). In March 1991 Forex Reserves including gold stood at $5.8bn as
against external debt of $83 billion.
6.Given the large foreign exchange reserves, the Government has made premature repayment of US$ 3 billion of 'highâcost' loans to World Bank and
Asian Development Bank and is considering further premature payment of other loans.
7.The Government has decided to (i) discontinue receiving aid from other countries except the following five: Japan, UK, Germany, USA, EU, and the
Russian Federation and (ii) to make preâpayment of all bilateral debt owed to all the countries except the five mentioned above.
8.Since July 2003, India has become a net creditor to IMF, after having been a borrower in the past.
9.The Government has written off debts of 30 million US dollars due from seven heavily indebted
16. Impact on Indian Economy
Impact of Recession on Indian Economy & Changes in
Consumer Behaviour due to Recession
Introductionâ
Almost everybody today seems to be discussing about the US Recessionary trend and its impact on emerging countries, more particularly India
Economists, Industrialists and the common man on the streets seem to have been horrified by the very thought of recession in India and that too due to
US. Decreasing industrial production, inflation, decreasing job opportunities, cost cutting, reducing purchasing power parity, et al are the aspects
discussed among them through every possible mode like articles, talks & walks and places like washrooms, canteens, etc
But to me the reality is very different! Yes......
India will not be...show more content...
Reduced industrial output
3. Reduced job opportunities
4. Stock Market is lingering in the bottom
5. Real estate market has started to take a beating
6. Inflation has increased
7. GDP has come down and the GPD forecast for the next two quarters are only average.
8. Change in consumer behaviors and purchasing power.
Indian economy 'faces slowdown not recession '
India is a different economy and known as one of the most promising economies in terms of growth and investment.
India, with $1.1 trillion or the second largest GDP among the world 's developing economies is treading on the right path of sustained progress and
17. development. While most Western economies are heading toward recession, the Indian GDP growth is likely to witness a slowdown from 9 percent
last year to 6.5 to 7.5 percent by the yearâend.
The Indian economy is immune to the global mortgage crisis, failures of banks in the West and liquidity crisis.
"Indian economy is based on robust fundamentals and enjoys the status of one of the most dynamic and growing economies in the world with over 9
percent GDP last year."
India itself is a biggest consumer market with 300 million of middle class and the lowest debt ratio of 22 percent of the GNP. The country enjoys the
highest savings rate of 28 percent of the GDP."
Change in consumer behaviors due to recession in India.
Today 's recession has affected all over the world. Due to the economic slowdown many companies
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18. Key Drivers Of India 's Economic Growth
II.Problem Statement
SMEs (Small and Medium enterprises) are one of the key drivers of India's economic growth. Over the years a large number of small and medium size
companies have grown in the market. Small and Medium Enterprises (SMEs) have been contributing so much towards the GDP of India. With their
emergence and huge potential, the government of India launched regulated trading platforms for the SMEs, which allows them to get listed without
bringing an IPO. The stock exchanges for these enterprises were introduced so that these firms can do better in financing activities for themselves.
Of course, there is an option of adding debt, which also helps improve the overall return on equity, but the cost of raising debt for SMEs is relatively
higher. High interest expense does not look very good on the profit and loss statement of a growing company. Thus, in order to fund the next stage of
growth without excessive interest cost burden, companies look to access equity funds via capital markets. This is where listing on an exchange comes
into the picture. The research would include the implications of the introduction of the BSE and NSE SME stock exchanges how well they are
performing. Also, what is the response from the SME sector.
III.Relevance of the Study
Indian economy is largely dependent on its tertiary sector and the manufacturing sectors are struggling with a meagre share in country's GDP, it is
essential to provide support to the manufacturing sector and thus the
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19. Essay on IndiaвĐŃĐâĐÂŽan Emerging Power in the World
Essay on Indiaâan Emerging Power in the World Rare are the moments in history when a nation suddenly captures the imagination of the world. For
India, those rare moments have arrived. The country is achieving a high economic growth of over 8 per cent of its GDP annually, on a consistent
basis. In fact, India's economic growth rate is second highest in the worldânext only to China. The developed world has been left behind. The two Asian
giantsâIndia and China have today turned the leaders of growth of the global economy. One can get the measure of India's resurgent economy from the
fact that the world GDP growth is around 4 per cent. For advanced countries, the growth rate is around 3.5 per cent, while India is maintaining its GDP
growth...show more content...
Our exports have almost doubled during the last four years. The foreign exchange reserves have crossed US $ 200 billion which have given India a
great financial strength. Our rupee has become very strong against the other international currenciesâ notably dollar, pound and euro. However, there is
poverty amidst plenty in many areas. Millions people live in poverty and destitution. They do not have even the basic amenities of life, viz. food,
clothing and shelter. This is because of the large size of our population, illiteracy, poor public distribution system and corruption. But, things are
improving fast in India. Centuries of exploitative rule by the British had drained India of its wealth. After achieving independence, the country had a
great task of rebuilding the basic infrastructure, spread education and bring new technology. The planned growth put the country back on track.
Today, the literacy rate has improved to over 75 per cent, the per capita income has crossed Rs 25,000, health care facilities are available in every
part of the country, and employment opportunities are growing. The large size of the population is actually a great source which can lead the country
to dizzy heights. Nearly fifty per cent of our population is young which means a great working potential, which, if properly utilized can increase
production and eradicate poverty. India is the biggest democracy in the world. The governments at the centre as well as at the states
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20. The Economic Reforms Of India Essay
1.INTRODUCTION :
The Economic Reform in India in 1991 has brought a virtual sea change in the framework of economic policy. This has been lead to make the Indian
economy progressively marketâoriented and has integrated it with global economic structure in a more meaningful way. The force of economic reform
have encouraged the entry of domestic firms into the global market and global firms into the Indian market which has been successfully in drastically
transforming society, culture, economics, and politics around the world. Perhaps the most significant development that has taken place in the
postâliberalization period in India has been the emergence of service sector as the driving engine of growth. Retailing activity is fast growing and
changing in India in the recent past, which is started with economic reforms, liberalization and globalization. Owing to an economic reform, India
may not be able to stop entry of foreign retailers or foreign direct investment (FDI) in the retail sector. The Indian retail industry is one of the fastest
growing industry in India. India is supposed to be the retailing hub for various goods and products with the highest density of variety of shops. The
Indian retail industry was and continues to be, highly fragmented due to its organized and unorganized retailing. Retailing in India is one of the pillars
of its economy and accounts for about 15 percent of its Gross Domestic Product. The Indian retail industry is the fifth largest in
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21. Indian Economic History Essay
ECON345
The Dragon and the Elephant: India and China in the Asian Century
1
Essay Topic No 1
"It is the context and circumstances prevalent in any nation that should determine its policies and strategies of growth" (Mahtaney, 2010, p. 159).
Illustrate the truth or falsehood of this statement with reference to either India or China
_____________________________________________________________________
"An ounce of practice is worth more than tons of preaching"
(Mahatma Gandhi, 1946).
Economic thought is an everâadapting philosophy, which has been 'preached' by many differing schools of thought throughout the centuries. In this
current global economic context, the majority of worldwide economic strategies and polices...show more content...
For example, it is among the most industrialised nations of today which leads the world in the Information and
Technology industry (IT), with their 350,000 IT and engineering graduates each year, and yet the majority of it's Gross Domestic Product (GDP) is
comprised from the agricultural sector where in 1991 it equated to 30% of all GDP (Rudolph, 1987, Table
One, p. 5). The rural sector of India remains vital today as 70% of the total Indian population dwell in either small rural villages or farms (World
Hunger and Poverty
Facts, 2013). India has therefore managed to combine its impressive economic achievements, which can match that of the developed world, whilst
continually facing humanitarian issues present in developing nations. This conclusion suggests that economic development does not necessarily have a
correlation with human development. Until recently, a common view of development referred to rising income levels and overall economic growth of
a country. However, in recent years a shift towards focusing upon humanity issues and circumstances rather than monetary concerns reflects the new
definition of a nation's development, which can be measured by the Human Development Indicator (HDI) produced by the United Nation
Development Programme in 1990. Discussions on the 'goals of development' now involve emphasizing the reduction of poverty, rather than raising the
average levels of income per capita (Anand & Ravallion, 1993, p. 133).
23. Impact Of Foreign Trade On India
IMPACT OF FOREIGN TRADE ON INDIAN ECONOMIC GROWTHâWITH 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 2004â2005 to
2013â2014.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
1950â51 to 1999â2000. 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 1950â51 to US $ 62.8 billion in 2003â2004 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 neoâclassic period these two theories became autonomous
relatively
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24. Wto and Its Impact on Indian Economy
WTO AND IMPACT ON INDIAN INDUSTRY
INTRODUCTION
India is a founder member of the General Agreement on Tariffs and Trade (GATT) 1947 and its successor, the World Trade Organization (WTO),
which came into effect on 1.1.95 after the conclusion of the Uruguay Round (UR) of Multilateral Trade Negotiations. India's participation in an
increasingly rule based system in the governance of international trade is to ensure more stability and predictability, which ultimately would lead to
more trade and prosperity for itself and the 134 other nations which now comprise the WTO. India also automatically avails of MFN and national
treatment for its exports to all WTO Members.
The WTO agreements cover goods, services and intellectual property. The...show more content...
Tariff barriers
The major liberalizations in respect of trade in manufactures are:
1. Expansion of tariff bindings. 2. Reduction in the tariff rates 3. Expansion of duty free access The UR agreement envisages substantial tariff
reductions in both industrial and developing countries. The main liberalization by industrial countries include the expansion of tariff bindings (i.e.,
commitment not to exceed a particular level of tariff) to cover 99 per cent of imports, the expansion of duty free access from 20â43 per cent of
imports, and the reduction of trade weighted average tariff by 40 per cent, from 6.2 to 3.7 per cent. However, the gains to developing countries from
the tariff cuts by industrial countries are less impressive. The reduction in the average tariffs on their exports to industrial markets is 30 per cent and
the labour intensive manufacturers (textiles, clothing, leather goods) and certain processed primary products (fish products), which are regarded as
sensitive have below average tariff cuts.
Table 2. Tariff bindings (Percentage of bound tariffs)
| |Before UR agreement |After UR agreement |
|Developed countries |78 |99 |
|Developing countries