International Economics Assignment Sample

Introduction Of International Economics Assignment

Summative assessment

The assessment has been developed by discussing the major criteria regarding the economic aspects of the country. India is well known for its trading relationship and the most important fact is that the country has the most effective yet diverse economical culture. Previously, the country has been to be the most effective yet specific regarding its trading and business relations with other organizations. They have developed and emerged with some effective global trading organizations such as WCO. The income has hiked in a fast manner in recent years and millions of Indian people have been lifted out of poverty. The country has also become one of the most effective key players across global economics. The fine implementation of a proper ambitious set of reforms has supported economic activity and at the same time, assisted in putting a break in inflation. Upon both fiscal and the same time, deficits of the current accounts have also been reformed respecting to the socio-political and socio-economical aspects.

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However, the background information of the country, the tax exchange rate, and trading behaviors has been developed in this part of the report. Apart from that, the impact of globalization on the Indian economy and in business has also been developed through the help of some effective journals and articles. Balancing and payments of the country have been depicted here in this part of the report.

Aim

The aim of this particular report is to deliver a piece of quick information regarding the economical aspects of the country India. Apart from that it also sheds light on the transition economical aspects of the country.

Objectives

• To signify the trading relation of India with other countries
• To evaluate the impact of globalization on the Indian economy and its socio-political areas
• To navigate the balance of payments across the country

Background information of the country

India is considered to be one of the most developing and emerging countries that has a population of 140.76 crores. With a federal type of governmental structure, the country recently has moved to a highly demanding nation. According to a report from the RBI, it has been noticed that the country has successfully managed to trade with over 18 countries and recently it has developed this number by 4 more (RBI.com, 2023). The per capita income of the country has been $420 which suggests a moderate to high-income ratio of Indian people. The GDP rate of the country has been $390 billion along with a real growth rate of 6.8% (RBI.com, 2023). There are different firms and industries that have been contributing effectively and consistently to the Indian economy. The agriculture industry of the country has been contributing 25% to the entire economy of the country. Recently the number has moved up to 28% and the reason behind this increment is the free marketing approach of the country (State.gov, 2023).

In this aspect, jute, textile, mining, cement, and transport along with other industries have been generating around 29% of the total GDP for the country. Trade and export is also phenomenal aspect that has been assisting the country to develop an effective economical area. Relations with other countries and subcontinents have assisted the country to emerge with maximum capital. The trading and export of the country generate $34 billion with respect to agriculture products and engineering products. On the other hand, from imports, India gets $42 billion each year (State.gov, 2023).

According to the above-mentioned figure it has been seen that India has been developing quite effectively in front of the global trading organization. Apart from that, the figure also depicted that foreign policies have also assisted the country to achieve success in business and develop the infrastructure of the entire country (Statista.com, 2022).

Apart from all these economical aspects, the country has been found to face a consistent civilization since 2500 B.C. and it has assisted the country to settle its effective place in front of the globe. The country itself has developed a typical urban culture that is based on commercial aspects and it is sustained by the trade of agriculture in the country. The overall literacy rate of the country has been 72% which has assisted the country to consider and determine changes. Technological developments have also assisted the country to level up its businesses. Apart from that, there is a massive impact of political factors on the country and its businesses. It has been observed that the ruling governments have signified different changes in the country and it has assisted the country to go further (Bhambra, 2020). The government of the country has successfully launched different social welfare policies and also impact fully envisaged others as well. In order to eliminate other defections, around 100 million toilets have been made by the government that has successfully changed the environmental aspect of the country. However, the participation of Indians in the global economy has been so high and rising as well. The clear exposure to the trade has surged just after the reduction in the tariff barriers.

The exchange rate and the country’s currency in relation to trade

Promoting global trade following the domestic currency will surely assist in the protection of the Indian rupee. Along with that, it would also reduce the costs of developing the business in the global business markets. The economic survey of the country has said that the business organizations of the country have successfully managed to anticipate a maximum value of Indian exporters. Along with that, the survey also suggests that this particular factor can assist the country to explore its economic developments and at the same time, it will also protect the currency of the organization (Bhambra, 2020). In July 2022, the Reserve banks bank of the has issued that a circular positioning in trading has successfully assisted the country to achieve greater deals in the business so that the purpose of trading can remain effective and minimized as well.

The frame of commerce can largely reduce the net demand for the exchange of foreign currencies. The globalization here implied that the Indian rupee might be freely transacted through both the resident and non-residents. It can also be used as a reservoir of currency for global trade. It basically involves the promotion of the Indian rupee for cruciality in global trade. According to Sugiharti, Esquivias, and Setyorani, (2020), the serious impact of the exchange rate along with the volatility has successfully impacted the Indian economy and it has also provided a clear growth to the entire capital. This study also examines how the exchange rate volatility over the primary export of India has developed and it has also developed its trading channel with more five countries. Application of the ARDL method or theory assists to measure the actual effect of the ERV over the export to the defined destination countries. The aggregate exports have been compared by employing the method along with the non-linear factors.

However, the findings of this paper suggest that the ERV of exports to other countries such as China only impacts on plastic goods. On the other hand, across India, the ERV impacts the largest number of commodities that are related to exports. The fine impact of the Index of industrial production has a solid effect that is long-term on the export of Asian countries. Apart from that, an imperial analysis of the study related to the discussed matter has successfully mentioned that there is a proper impact on the macroeconomic prospects in the economy of India. As mentioned by Jamil et al., (2023) there are different contributions for the markets that fill a gap in the economy of a market. This has provided a positive impact on India’s economic growth mostly after the pandemic outbreak globally. This rate is high compared with the surplus of the previous year which was $18.8 billion. As per the report of RBI, the BOP of India can help the Indian Government to take precise decisions on trade policies and fiscal. Apart from all that, it can provide vital information to examine and comprehend the financial dealings of the entire country mostly with other neighboring countries. This research also clarifies the serious impact of using most of the statistical frameworks. The study also adopted the logit of ML binary and at the same time, successfully investigated the change in the fine rate of exchange that has developed due to the macroeconomic variables (Giráldez, 2022). The imperial result has confirmed that Japan, Australia, and many more countries' markets have taken an exchange that is time-related to the regimes of the made decisions.

However, all these factors have successfully managed to interpret the economical aspects of India. Globalization has successfully managed to implement effective benefits and opportunities to the country and at the same time, it has successfully made the country to get explored positively across the global audience.

Globalization's effects on the country’s trade relations

The proper reduction of the subsidies of exports along with the import barriers has successfully enabled a free treading market that has made up an untapped Indian market to look attractive incredibly. There have been particularly three types of development that have come to Inda through the help of globalization. There has been a massive influx of both the investment of foreign capital and the existing organizations that have been offshoring and expanding in India. The pharmaceutical and manufacturing industries have been the most promising aspects that have deliberately assisted in the development of Indian trading and economy. As per \the view of Zafar et al. (2019), globalization has also developed green growth in industries across the Indian market. Being sustainable has been the major motto for the organizations and that has attracted multiple trading organizations to do business with India. Green growth is considered to be a healthy sign for the global economy. In this aspect, India has successfully managed to move forward with their trading and started to generate a massive number of products in the business. The study here has deployed real intentions for investigating the effective role of the FDI. The developed economy has been made open for "foreign direct investment" across the nation and more impactful and liberal trade policies have made ready to acquire new yet effective innovations that are related to the technologies.

A generic concept of globalization for bringing a lot of opportunities and benefits regarding trading has been described here properly. Whereas according to the different economists, there are some particular reservations that are properly attached to the fact (Zhao et al., 2019). In response to globalization, the domestic market of the country has faced some challenges regarding the socio-environmental aspects.

The country’s balance of payments

The “Balance of Payments” or BoP record is the process that makes proper dealings within goods, services as well as assets between citizens of the country along with the rest of the world. The BoP generally counted for a specific period of time within a year. Hence, it can be noted that the BoP of India pursues the “Double Entry System” to register transactions with the rest of the Credit side as well as the Debit side. Thus the formula that the BoP Surplus follows is “Credit Side > Debit Side”. On the other hand, in the Balanced BoP, the “Credit Side = Debit Side”. Lastly, the BoP Deficite generally evaluates the fact that Credit Side < Debit Side. The components of this country’s balance of payments are generally divided into two parts including the Current account and the Capital account. The current account included the components of the export and import of goods and services. On the other hand, the Capital account consisted of borrowings, lending, investment, and foreign exchange.

As per the above figure, it can be analyzed the fact that a country can operate its “forex reserves” to counterbalance its all deficit of the balance of payments. As per the case of India’s Balance of Payments, it can be noted that the Reserve Bank sells its foreign exchange only when there are a few deficits and this process may be called an “official reserve sale”. Apart from that, the decrease, as well as the increase within the official reserves, is generally called the “Surplus” or the “overall balance of payments deficit” As per the analysis of the above framework, India’s change in the reserve has reached upto $ 40 million dollar at the end of 2022 (Rbi.org.in, 2022).

According to the annual report RBI, the CAD or the “Current Account Deficit” stood at 3.3% of GDP for the first half of the 2022-23 Fiscal year. It is desired to negotiate in the second half of the 2022-23 financial year (Mospi.gov.in, 2018). As a result, it remains eminently effortless within the parameters of viability. After that as per the gathered report of the Reserve Bank of India, in January 2023, the “Trade Deficit” was limited to $17.7 billion which was directed by an abrupt fall in non-oil imports (Rbi.org.in, 2022). The FPI flows have declined the gold imports too besides the went-up Workers’ remittances.

The “Balance of Payment” or BoP of this country can be described as frequent information on all economic transactions of the entire country. The BoP of India is generally counted by comparing it with the rest of the world’s economic condition and the duration may become a specific period of time, usually one year. Hence, the Balance of Period of India is generally maintained by the Reserve Bank of India and it indicates the country has a deficit or surplus mostly on trade. It can be depicted that, while the exports overextend imports, a trade surplus occurred and when imports surpass exports, then a trade deficit occurred. The basic purpose of the Balance of Payments of India is to reveal the economic and financial status of the country (Mospi.gov.in, 2018). Apart from that, this process can be generally used as an arrow that can easily determine the currency value of the country depreciating or appreciating. It can be noted that the “Balance of payments” of India delivered a surplus of $3.4 billion mostly in the fourth quarter of the financial year 2020-21.

Conclusion

The entire report here has successfully proposed the clear result about the economic aspects of India. The beginning part of this report has successfully portrayed a brief yet concise analysis regarding the background country. In the report, it has been seen that the global economy has put a massive impact in the business infrastructure of the country. In this aspect the globalization has successfully managed to impact in the economy and treading of the country. Through a detailed secondary research method, the report has been developed and it has also put enhancement to the research. Different database such as Google scholar has been used in this report to intensify the meaning of the research. Apart from that, the balance in payments regarding India has been successfully put here. All these effective analysis and discussion have successfully fulfilled the needed areas of the research.

References

Bhambra, G.K. (2020). Colonial Global Economy: Towards a Theoretical Reorientation of Political Economy. Review of International Political Economy, [online] 28(2), pp.307–322. doi:https://doi.org/10.1080/09692290.2020.1830831.

Giráldez, A., 2022. Metals and monies in an emerging global economy. Routledge.

Indiatimes.com (2021). Indian economy in transition phase, growth to come back: SBI Chairman. The Economic Times. [online] Available at: https://economictimes.indiatimes.com/news/economy/indicators/indian-economy-in-transition-phase-growth-to-come-back-sbi-chairman/articleshow/71735967.cms.

Jamil, M.N., Rasheed, A., Maqbool, A. and Mukhtar, Z. (2023). Cross-cultural study the macro variables and its impact on exchange rate regimes. Future Business Journal, 9(1). doi:https://doi.org/10.1186/s43093-023-00189-1.

Mospi.gov.in (2018). 10.9 Balance of Payments | Ministry of Statistics and Program Implementation | Government Of India. [online] mospi.gov.in. Available at: https://mospi.gov.in/109-balance-payments [Accessed 21 Apr. 2023].

OECD.com (2021). India Economic Snapshot - OECD. [online] www.oecd.org. Available at: https://www.oecd.org/economy/india-economic-snapshot/.

RBI.com (2023). Reserve Bank of India. [online] Rbi.org.in. Available at: https://www.rbi.org.in/.

State.gov (2023). Background Notes: India. [online] State.gov. Available at: https://1997-2001.state.gov/background_notes/india_0003_bgn.html [Accessed 21 Apr. 2023].

Statista.com (2018). Infographic: Indian rupee hits record low against the dollar. [online] Statista Infographics. Available at: https://www.statista.com/chart/15431/indian-rupee-against-the-dollar/.

Statista.com (2022). India: GDP from construction 2021. [online] Statista. Available at: https://www.statista.com/statistics/1069818/india-gdp-contribution-by-construction/.

Sugiharti, L., Esquivias, M.A. and Setyorani, B. (2020). The impact of exchange rate volatility on Indonesia’s top exports to the five main export markets. Heliyon, 6(1), p.e03141. doi:https://doi.org/10.1016/j.heliyon.2019.e03141.

Zhao, H., Qu, S., Guo, S., Zhao, H., Liang, S. and Xu, M. (2019). Virtual water scarcity risk to global trade under climate change. Journal of Cleaner Production, 230, pp.1013–1026. doi:https://doi.org/10.1016/j.jclepro.2019.05.114.