EDC: India

Question 1

Trade summary

Answer 1

• just under 50% of workforce in agriculture, but services are major source of economic growth, accounting nearly 2/3 of Indias output but employing less than 1/3 of its labour force.
• large educated English-speaking population so to become major exporter of information technology services, business outsourcing services and software workers.

Question 2

Trade statistics

Answer 2

Population = 1.389 billion (521.9 million labour force)
GDP per capita = US$6,100
Service sector = 61.5% of GDP

Question 3

Exports

Answer 3

Total: $484.95 billion (2020)
Destinations: USA 17% UAE 9% China 5%
Exported products: refined petroleum, diamonds , packaged medicines, jewellery, cars

Question 4

Imports

Answer 4

Total: $493.18 billion (2020)
Origin: China 15%, USA 7%, UAE 6%, Saudi Arabia 5%
Products imported: crude petroleum, gold, coal, diamonds, natural gas

Question 5

Services

Answer 5

Exports: $240 billion
Imports: $137 billion

Question 6

Indias growth

Answer 6

-1990s adopted import substitution trade policy with high tariffs on imported goods, restrictions on FDI to protect domestic industries
- since become liberal with trading partners. On of worlds largest exporters of merchandise, services and capital, and one of fastest growing economies.
-worlds major destination for outsourcing
-40% of IT industry = in Bangalore

Question 7

Reasons for growth

Answer 7

• educational institutions
• ability to rapidly interchange information
• lower infrastructure costs in one locality
• government incentives
• fluency in English
• low labour costs
• growth of emerging MNCs and BRICs

Question 8

Economic opportunities of international trade

Answer 8

• Share of merchandise exports has doubled between 2000-2013 from 0.7% to 1.7%
• Local multiplier effects
• Large scale agglomeration of industry
• Development of the port of Chennai for motor industry ad development of ancillary industries in the area

Question 9

Social/political opportunities of international trade

Answer 9

• HDI has risen from 0.483 in 2000 to 0.586 in 2013
  
  • creation of an open market economy
    -trade liberalisation
    -growth of FDI
    -investment in education
    -investment in infrastructure
    -development of global trade agreements
• Gini coefficient has reduced from 36.8 to 33.6 in the last seven years (reduction in inequality)

Question 10

Interdependence with trading partners: economic factors

Answer 10

• bilateral trade with China: caused growth in GDP, further investment, employment opportunities & raising incomes at all levels
• India’s outward FDI to China was US$27 million and the inflow from China US$25 million.
• 100 Chinese companies in India, 165 Indian companies in China

Question 11

Interdependence with trading partners: social/political

Answer 11

• political confidence: china and India have common goals of improving living standards.
• border disputes stabilised by improved trade relations.

Question 12

Interdependence with trading partners: environmental

Answer 12

• issues with china over water supply, deforestation and land degradation in Himalayan border areas.
• joint monitoring and investigation of these problems (trans-border rivers)
• china now provides flood season hydrological data showing beginnings of co-operation over emergency flood management
• both countries have signed climate change treaties in relation to air pollution.