Determinants of trading partner
- 1. Determinants Of Trading Partners In INTERNAIONAL BUSINESS
- 2. • The two largest goods traded by India are Mineral fuels (refined / unrefined) and gold (finished gold ware / gold metal). • Trade is by its very nature a reciprocal activity. • From April through June, India’s top trading partners were China, the United Arab Emirates (or UAE), and the US. • India had the largest trade deficit with China in 2014. Its trade deficit was $36.2 billion. Among its top ten trading partners in the year, India maintained a trade surplus with four countries—the US, UAE, Hong Kong, and Singapore.
- 4. Balance of Payment • It is a double entry system of record of all economic transactions between the residents of the country and the rest of the world carried out in a specific period of time. • It takes into account the export and import of both visible and invisible items.
- 5. BOP statement includes • Capital received by residents • Services rendered • All the receipients on account of goods exported • Payment of residents • Capital transferred to foreign
- 6. Components of BPP • Current account • Capital account
- 7. Current account • It includes visible exports and imports, and invisible items like receipts and payments for various services. • It contains credit and debit items. • Credit includes merchandise exports and invisible exports. • Debt includes merchandise imports and invisible imports.
- 8. Capital account • It is the difference between the receipts and payments on account of capital. It refers to all financial transactions. • The capital account involves inflows and outflows relating to investment, short term borrowings/lending. • Account will show either surplus or deficit. • It includes : Private foreign loan flow, movement in banking capital, reserves , gold movement etc.
- 9. Government Interference Tariff and Non Tariff Barriers • Tariff Barriers – Taxes and duties government input on certain things. Tariff is a tax on goods which one nation imports from another. Many nations se tariff to protect their own industry from foreign competition.
- 10. Classification of Tariff – 1. On the basis of origin and destination : • Export duties • Import Duties • Transit duties 2. On the basis of Quanification : • Specific duty • Ad voloren duty • Compound duty
- 11. 3. Between different countries : • Single column • Double column 4. Tariff are served : • Revenue Tariff • Protective Tariff • Countervailing and antidumping duties
- 12. • Non Tariff Barriers – Non tariff barriers are used by developing countries to prevent foreign exchange outflow. They are used by developed economy to protect domestic industry which has lost International competitiveness or which are politically sensitive for their own countries. This includes Import licensing, Foreign exchange regulation, cancellation of imports etc.
- 13. Types of Non Tariff barriers– 1.Voluntary export restraints (VER) 2.Administrative policies • Health and Product standards • Custom procedures • Consular formalities • Licensing • Environment protection law • Foreign exchange regulation
- 14. CHANGE IN COMPETITIVENESS Competitiveness pertains to the ability and performance of a firm, sub-sector or country to sell and supply goods and services in a given market. Trade Policy can be used to establish unilaterally and multilaterally negotiated rule of law . Competitiveness results from a comprehensive policy that both maintains a favorable global trading environment for producers. These include incentives in the form of export promotion efforts and export financing.
- 15. SPECULATION These include transactions ranging from anticipation of seasonal movements in exchange rates for the extreme one, viz., flight of capital. In periods of political uncertainty, there is heavy speculation in foreign money. These speculative activities bring about wide fluctuations in exchange rates. A floating exchange rate can still have rapid appreciation and depreciations because the situation of an economy can change frequently.
- 16. Inflation TYPES OF INFLATION:-EFFECT OF INFLATION:- ON THE BASIS OF DEGREE OF THE GOVERNMENT CONTROL ON TH BASIS OF POLITICAL INFLATION ON THE BASIS OF SCOPE INVESTMENT INTERST RATE UNEMPLOYMENT DECRECING IN PURCHASING POWER
- 17. Causes of Inflation Demand pull Cost push Imported
- 18. Monetary measures:- Bank rate CRR open market operation Fiscal measures :- Increasing In Taxes Increasing in surplus budget Increasing in saving Controlling INFLATION
- 19. ECONOMIC GROWTH Benefit of economic growth Higher average income Lower unemployment Lower govt. borrowings Imported public services Investment Potential cost of economic growth Inflation Boom and bust economic cycle Enivermental cost Inequalities