International Trade

Running head: INTERNATIONAL TRADE
International Trade
Name of the student
Name of the university
Author Note

1INTERNATIONAL TRADE
Table of Contents
Part A:........................................................................................................................................2
Part B:.........................................................................................................................................5
Part C:.........................................................................................................................................7
References:.................................................................................................................................9

2INTERNATIONAL TRADE
Part A:
Political Environment:
Political stability is an essential factor that can affect a business organization in either
positive or negative way. By involving in trade agreement and implementing tax policies, the
government can control the political environment of a country.
Being a liberal-capitalistic democracy, the state government of Australia interferes
significantly in various economic activities in this economy related to trade, for instance,
implementing taxes for protecting the self-interest of domestic business organizations and
national economy (Ma, Kent and Mulley 2018). It is beneficial to start business in some well-
known cities like Sydney and New South Wales of Australia, as they provide strong, stable
and open government with favorable tax system. Moreover, those cities have best
communicational and infrastructural facilities that can positively influence a business
organization to expand. Based on data of the World Bank, Australia’s rank is 32.
Figure 1: Political Stability Index of Australia (1996 – 2016)
Source: (TheGlobalEconomy.com 2018)
It can be seen from the above data that Australia’s political condition has remained
almost stable since 2003.

3INTERNATIONAL TRADE
India, one of the populous and leading democratic countries, has possessed a federal
form of government along with parliamentary system. The country’s political environment
has affected significantly by various factors like interests of politicians, ideologies of
different political parties and governmental policies. Consequently, those political factors
have affected India’s business environment (Schleifer and Sun 2018). With emerging
economy in world market along with strong infrastructural facilities, India is constructing a
positive business environment. The country has tried to maintain good relationship with other
developed countries, especially with the U.S.A, through international trade. However, the
Republic of India sometimes has faced political instability due to some domestic and
international causes, for instance, conflict between two opposite political parties and poor
relation with neighbor countries, which in turn have affected the business industry of this
country, adversely. Moreover, unemployment and poverty have negatively influenced India’s
economic growth, while corruption and terrorisms have also influenced India’s political
conditions, adversely.
Figure 2: Political stability Index of India (1996 – 2016)
Source: (TheGlobalEconomy.com 2018)
According to the political stability index of the World Bank, India has ranked 166
(TheGlobalEconomy.com 2018). It can be said from the above figure that until 2013, the
political condition of India has remained poor. However, after this year, the country has
moderately improved this situation.