IMT - 19: INDIAN FOREIGN TRADE

PART - A

Q1. What are the major steps which are announced by India to accelerate export growth rate of the country? Discuss in reference to EX-IM Policy (2002-2007).

Q2. Describe the major shifts in global trade over the last ten years. What are the implications of these shifts in influencing the Indian foreign trade?

Q3. What do you understand by capital account transactions? How do these transactions differ from balance of payments on current account? What are the major items of current accounts .Discuss in reference to current scenario of Indian foreign Trade?

Q4. How India's commitment with WTO does influence its trade policy objectives? Discuss by citing some relevant examples in support of your answer.

Q5. Explain why governments of developing countries are usually hesitant to undertake trade policy reforms to achieve out-ward oriented strategies.

PART - B

Q1. Explain the process of Dumping? What are the major dumped items in India over the last few years? What measures can the government of importing countries take to guard against this process? Discuss.

Q2. What are the various instruments of trade policy? What combination of these instruments would you suggest for a country aiming at rapid economic growth?

Q3. What are the major exporting items from India? How the destinations of India's exports have changed in last few years? Discuss.

Q4. What are the major services areas, which are having good export potentials? Cite these and discuss their performance over the last few years.

Q5. Identify some important goods and services from the point of view of export opportunities in coming years. Discuss, what are the major steps must be taken by India to accelerate their growth rate?

PART - C

Q1. What are the major areas of infrastructure in Indian Economy, which require Direct Foreign Investment? Discuss. 

Q2. Discuss the emerging scenario of joint venture in India. The approach and policy in your opinion is good enough to motivate companies to enter in to joint venture alliance. Discuss.

Q3. What you mean by "Special Economic Zones"? What are its benefits? Discuss the significance of special economic zones in making Indian Economy globalised. 

Q4. Discuss the roles of various export councils in promoting exports from India.

Q5. Select any five major players of Software - Industry. Discuss their strategies for accelerating the software exports from India.

CASE STUDY - 1

In his famous Report on Manufactures (1791), Alexander Hamilton proposed to encourage the growth of manufacturing by protecting youthful industries from foreign competition. According to this doctrine, which received the cautious support of free-trade economists like John Stuart Mill and Alfred Marshall, there are lines of production in which a country could have a comparative advantage if only they could get started.

Such "Infant industries" would not be able to weather the initial period of start-up and experimentation if they had to face unprotected the sales of international competition. With some temporary shelter, however, they might develop economies of mass production, a pool of skilled labor, inventions well adapted to the local economy, and the technological efficiency typical of many mature industries. Although protection will raise prices to the consumer at first, the industry will be so efficient once it has grown up that cost and price will actually fall. A tariff is justified if the benefit to consumers at that later date would be more than enough to make up for the higher prices during the period of protection.

This argument must be weighed cautiously. Historical studies have turned up some genuine cases of protected infant industries that grew up to stand on their own feet. And studies of successful newly industrialized countries (such as Singapore and Korea) show that they have often protected their manufacturing industries from imports during the early stages of industrialization. But the history of tariffs reveals even more contrary cases in which perpetually protected infants have to shed their diapers after so many years.

Questions:

1. What exactly do you understand by the term 'infant industry'?

2. Analyse the infant industry argument for tariffs. What is its relation to comparative advantage?

3. In this age of liberalization and free trade, does the argument of infant industry protection have any relevance? Is it possible for the governments to adopt policy measures to support infant industries?

CASE STUDY - 2

WHY NATIONS TRADE

While many countries may be able to clean self-sufficiency from the standpoint of foodstuffs, very few, if any, are able to provide all the goods necessary for a "modem" standard of living.

Foreign-supplied goods, services and raw materials have become a necessity, not an option. Rather than produce everything needed in an economy, countries have, over time, become specialists in certain goods and services. Agrarian, industrial, technological and the new service-based economics all coexist and coalesce in today's world of commerce. Countries vary greatly in their export-to-import ratios but there is not a nation on the planet that does not actively seek out opportunities to sell or purchase goods and services from its neighbors.

World trade in 1950 totalled little over US$ 50 billion but had exceeded US$ 4 trillion just four decades later. This remarkable growth was triggered by advances in transport and communication as well as the opening of world markets brought about by the Bretton Woods Conference of 1944. In many ways the flow of goods and services between nations became as facile as trade among the provinces of a domestic market. Nations now began to view each other as trading partners and as sources of materials that were unavailable at home. As market interdependencies replaced political rivalries among the major economies, former enemies and current allies began to work out balance of payments and trade deficits over conference tables rather than take to the battlefield.

Questions:

1. Why Breton Woods conference of 1944 is so important in International Economy?

2. In this era of Globalization how has interdependence between nations increased?

3. Discuss the business opportunities and business challenges in the context of international trade.