Thursday, March 15, 2012

International trade and India's story

Trade is done simply to satisfy the wants, Trade is conducted not only for the sake of earning profit; it also provides service to the consumers. Trade is an important social activity because the society needs uninterrupted supply of goods forever increasing and ever changing but never ending human wants. As per Wikipedia, Trade is the transfer of ownership of goods and services from one person or entity to another by getting something in exchange from the buyer. As per Wikipedia , International trade is the exchange of capital, goods, and services across international borders or territories.[1] In most countries, such trade represents a significant share of gross domestic product (GDP) International trading system is severely impacted by the Industrialization, advanced transportation, globalization, multinational corporations, and outsourcing.
 Following are different types of trades,
Trade can be divided into following two types, viz. a. Internal or Home or Domestic trade. b.External or Foreign or International trade United States is the largest by International trade In this post I will restrict my focus on understanding the Indian perspective and we shall come to conclusion on the India’s position in International trade. International trade now accounts for nearly 53% of the gross domestic product (GDP), pointing to increased integration with the global economy, which is not limited to the stock market and the banking system alone. In 2004-05 , global trade accounted for 37% of the GDP. It is the rapid growth in shipments in and out of the country, driven by lower customs duty, which has spurred this sharp growth. India's share in global trade is now near the 2% mark, compared to a mere 0.7% in 2000. The rise of other trading partners has pushed the US to the third slot. US has been displaced by UAE as India's largest trading partner, followed by China, since 2008-09. In the first six months of the current financial year, however, China overtook the UAE to be the top trading partner. There has been a gradual shift in India's manufactures exports from labour-intensive sectors like textiles, leather and manufactures, handicrafts, and carpets to capital and skill-intensive sectors. The Economic Survey 2011-12 highlighted the growing imbalance in trade, with increase in gold and silver imports being major contributors. Gold and silver imports stood at $50 billion in 2011-12. Source: ET and Wiki

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