CHANGING GLOBAL TRADE PATTERNS
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The document discusses changing global trade patterns and India's trade trends. Some key points are: - Trade between developed countries dominates globally and is growing fast. Regional manufacturing hubs are emerging in Asia while agriculture hubs are found in America. - India's exports have shifted southwards towards developing countries in recent decades. Exports of manufactured goods to developed countries fell by 7% while rising 40% to developing nations. - India has potential to emerge as a hub for service exports due to its large skilled workforce, but China has become dominant in manufacturing exports due to supportive policies and incentives.
CHANGING GLOBAL TRADE PATTERNS
- 1. CHANGING GLOBAL TRADE PATTERNS AN OVERVIEW Presented By: Anamika Abhishek Shrikant Varun
- 2. HIGHLIGHTS • Trade between developed countries dominates the world and is growing fast • Emergence of regional patterns; Manufacturing in Asian countries, Agriculture in America • Hub Formation among South Africa, Brazil and China, India emerging as a secondary hub • The recession in 2007-09 resulted in the fall of both output and prices globally • De-coupling of developing nations resulting in low impact of recession as compared to the ROW • The decade of 1995-05 saw India increasing export in manufactured goods and minimal increment in agricultural exports • The case reflected that India’s exports to developed countries came down to 7% while it increased by 40% to the developing nations • India’s current capacity of exporting goods is not sufficient to meet the requirements of fresh and new markets like GCC/Gulf • India’s major export has been to African countries • India has with time emerged well in the exports of service sector but on the contrary, our nearest neighbor China has acquired a dominant position and become a hub for many exporting countries
- 3. INDIA’s FOREIGN TRADE INDIA’s EXPORT TRENDS – SHIFTING SOUTHWARDS
- 4. Case Questions • Would India emerge as a hub of service exports? • Yes, India has the potential to emerge as a hub of Service Exports as it has big pool of young generation within the age group of 25-45 years and is producing professionals at a high rate in the field of consulting, medication, law , finance and other professional fields • Cost Effective availability of services in India. This is reflected from the fast growth of Medical Tourism in India • Why did India miss the bus (given its demographic size) in Manufactured Exports? • India although being a country of high potential and good export capabilities, missed out on account of Manufactured Exports due to stringent labor laws and difficult entry to foreign investors and industrialists to expand their businesses. Such environment became a hurdle in expansion of the Manufactured Export Markets • Huge and multiple taxation in India also contributed to lack of global competitiveness • Difficulty in setting up Industries de motivated people( departmental and political issues) • What was special about China? • China has a skilled and hard working mass which had the potential to perform on high standards of manufacturing requirements of foreign markets. Also, there was a provision of good incentives provided by the Government to promote to enhance Exports
- 5. MERCANTILISM is ALIVE and WELL in the TWENTY-FIRST CENTURY Presented By: Anamika Abhishek Shrikant Varun
- 6. HIGHLIGHTS • Countries still continues to impose restrictions on International Trade • Most countries restrict import of agricultural commodities, textile, shoes and steel etc • These trade restrictions are implemented to:- • Protect domestic environment • Protect industry from foreign competition • Encourage domestic hi-tech industries • Subsidies provided to industries like Computers and Telecommunications to encourage international competitiveness and future growth • Developed nations like European Union are strict in regards with health, hygiene and components of goods imported by the other developed nations • This case indicates the presence of mercantilist approach amongst both The Developed as well as Developing Nations even in the Twenty First Century in order to protect self interest
- 7. Case Questions Why is there a need to restrict trade? Protect domestic employment: When we start receiving foreign goods there are chances that the domestic products demand is lost and thereby companies profits & margins reduce due to which the cost cutting is done and most often there is a shredding in the jobs Development of domestic companies: The companies are given subsidies for technological advancement so as to internationally compete
- 8. Case Questions cont…. Compare Trade Restrictions put by India vis-a-vis a Developed Country ? TRADE RESTRICTIONS BY INDIA Protection of public morals Protection of human, animal or plant life or health Protection of patents, trademarks and copyrights and the prevention of deceptive practices Prevention of prison labor Protection of national treasures of artistic, historic or archaeological value Conservation of exhaustible natural resources Protection of trade of fissionable material or material from which they are derived; and Prevention of traffic in arms, ammunition and implements of war TRADE RESTRICTIONS BY USA Export licensing became stricter with the US imposition of sanctions in May 1998, after India’s nuclear tests. BXA (Bureau of Export Administration) denied all export and re-export applications to India for dual- use items controlled for nuclear or missile non-proliferation reasons under the Export Administration Regulations (EAR) to all end users in India Piracy and counterfeiting problems persisted in many countries such as India, Sweden, Mexico, China etc due to which exporting became difficult as many developed countries started rejecting the exported goods US continues to deny GSP (Generalized System of Preferences) benefits to India on nearly 800 product lines pertaining to chemicals, agro-chemicals and pharmaceutical products. This denial has ostensibly been made due to alleged lack of sufficient Intellectual Property Rights (IPR) protection in India. The restoration of GSP to India for these products would boost Indian exports of these items to the USA