International Business



International Business

Introduction

The Indian economy has undergone dramatic changes over the last 20 years, thanks in large part to economic reforms. One way to measure the impact of the change would be to analyze how trade has evolved Indian goods in this period. Some changes are so obvious that you cannot ignore. For instance, exports have grown rapidly. 18,000 million in 1991-92, about 7% of gross domestic product (GDP) of India, exports increased to 246.000 million in 2010-11, equivalent to 14% of GDP (Panagariya, 2003). Imports also grew rapidly in this period, from 20,000 million, 8% of GDP in 1991-1992 to 350,000 million in 2010-11, amounting to nearly 20%. If India manages to keep growing and remains stable despite the sharp increase in the trade deficit in this period, mainly due to reforms opening the economy (Bhat, 2011).

Discussion

In the past few decades, the objective of the India International Trade Policy was to focus on their own markets and products. Until the 1980s, they were not interested in opening their massive market to the foreign world, neither they were interested in exporting their products and services to the globe. Foreign investments were not appreciated. The objective of this practice was to make the country independent on its development. India was one of the most closed economies in the world by the 1980s (Panagariya, 2003). Though their bilateral trade policy was on paper supportive of open trade and market, as according to the policy, the country promoted the transfer of technology and services and having partnerships for development, though on actual terms, there was nothing as such, as they followed the map of communist countries. The idea of Free Trade Zone was nonexistent. Therefore, when we look at the growth charts of the early 1970s and 80s, an observer would ...