International Trade Analysis of India: Economic and Political Factors

This report provides an analysis of India's international trade, focusing on its emergence as a rapidly growing economy and attractive investment destination. It examines India's GDP growth, political and economic influences, socio-cultural and technological factors, and national resources that contribute to its competitive advantage. The report also delves into foreign currency and exchange influences, India's existing trade policies, systems, barriers, and incentives, including the Foreign Trade Policy (FTP) and various export incentives. It highlights the existing levels of Foreign Direct Investment (FDI) in India and provides recommendations for investment, particularly in the real estate sector, considering the depreciation of the Indian Rupee. The report references key sources and data, offering a comprehensive overview of India's economic landscape and its role in international trade.

INTERNATIONAL TRADE
Analysis of India

INTRODUCTION
 The assignment focuses on the analysis of
India as a new emerging market where rapid
GDP growth has created attractive
investment opportunities.
 Growth in the GDP of a country is used as a
primary indicator to measure the health of
the economy.

OVERVIEW OF INDIA
 India is a country located in South Asia and is
also called Republic of India (Malik, et. al.,
2016.
 It is the 7th largest country in terms of area,
most populous democracy and second most
populous country in the world (Statista,
2018).

GDP OF INDIA
 A large proportion of the Gross Domestic
Product (GDP) in India is contributed by
agriculture.
 India has emerged as one of the fastest
growing economies in the world and is
further expected to become one of the top
three economic powers of the world in the
upcoming 10- 15 years as per the
International Monetary Fund (IMF) and
Central Statistics Organization (CSO).

POLITICAL AND ECONOMIC INFLUENCES/
BENEFITS/ ADVANTAGES
 Political interference has been reduced to a
great extent for supporting Foreign Direct
Investment.
 India’s political situation is characterized to
be stable.
 President constitutes policies for attracting
FDI in India.
 The GDP level of India is constantly growing
continuously leading to the creation of
investment opportunities.

SOCIO-CULTURAL AND
TECHNOLOGICAL INFLUENCES/
BENEFITS/ ADVANTAGES
 The culture and
lifestyle in India is
changing and the new
generations in India
are significantly
adopting the western
culture.
 The IT sector of India
is one of the strongest
IT sectors in the world

NATIONAL RESOURCE AND FACTOR
ENDOWMENTS THAT CREATE
COMPETITIVE ADVANTAGE
National resources are resources that exist in the
environment of India without any human activity.
It includes-
 Soil
 Mineral
 Livestock
 Horticulture
 Fisheries
 Forest
All the factors namely land, labor, capital and
enterprise are also sufficiently endowed by India.

FOREIGN CURRENCY AND
EXCHANGE INFLUENCES
 The depreciation of Rupee against other
currencies allows investors to make
investment at lower prices.
 The norms made by the Government of India
in respect of foreign exchange are user
friendly which further attracts investment in
India.
 It allows investors to increase diversification
of portfolio (Chandra, 2017).

INDIA’S EXISTING TRADE POLICIES,
SYSTEMS, BARRIERS AND
INCENTIVES
 Foreign Trade Policy (FTP) 2015-20 has
significantly enhanced the scope of Service
Exports from India Scheme (SEIS) and
Merchandise Exports from India (MEIS)
scheme.
 The existing trade system of India has made
it the 18th largest export economy across the
globe.

INDIA’S EXISTING TRADE
POLICIES, SYSTEMS, BARRIERS
AND INCENTIVES
Trade barriers have been reduced to a great
extent in India by way of eliminating the
requirements related to import licensing for
majority of the consumer goods.

TRADE INCENTIVES
The important export incentives include
 Free Trade Zones (FTZ)
 Software Technology Parks/ Electronic
Hardware Technology Park
 Duty Exemption Entitlement Scheme (DEEC)
 Export Promotion Capital Goods Scheme
(EPCG)
 Deemed Export, Duty Drawback and
Manufacture under Bond.