Economics: Indian Economy in the Global Context: Meaning, Trade, Imports and Exports

Doorsteptutor material for IEcoS Indian-Economics is prepared by world's top subject experts: fully solved questions with step-by-step explanation- practice your way to success.

Download PDF of This Page (Size: 182K)

Meaning of Economic Relationship

Economic relations can be said to be an economic interaction among various countries of the world and their effect on global economy. In short, when exchange of various goods and services takes place between or among different countries is called Economic Relationship among the countries. When a country has economic relationship with other countries, then it is called an open economy.

Trade

Trade is the activity of buying, selling and exchanging goods and services between people or firms. When same thing happens between citizens of various countries, we call it as International Trade.

Imports

Buying of goods and services by domestic citizens from the foreign countries. This is called imports.

Exports

Selling of goods and services by the domestic citizens to citizens in a foreign country. This is called exports.

Importance of Trade

  • Helps to get varieties of goods and services.

  • It encourages production of new goods and services.

  • People of different countries meet and interact through trade.

  • Due to international trade it is possible to produce the goods more efficiently because it leads to specialization. This means goods can be produced at lower cost so that people will get them at lower prices.

Exports and Imports by India

The countries with which India is engaged in export and import activities are called India’s trading partners.

Exports and Imports by India

Exports and Imports by India

India’S Exports

  • The major items that India exports to different countries are engineering goods, handicrafts, chemicals and allied products, readymade garments, cotton yarn, iron ore, leather, fish, rice, fruits and vegetables etc. Some of the countries where Indian exports reach, are France, Germany, UK, USA, Iran, UAE, China,

  • Hongkong, Singapore and some African and Latin American countries.

India’S Imports

Petroleum and lubricants are the most important items that India imports from the Oil and Petroleum Exporting Countries (OPEC) such as Iran, UAE, and Saudi Arabia etc. India also imports non-ferrous metals, capital goods and fertilizer. Capital goods include electrical and non-electrical machinery and transport equipment. India’s imports come from most of the countries to which it exports its goods and services.

Globalization

Globalization is the spread of products, technology, information, and jobs across national borders and cultures. In economic terms, it describes an interdependence of nations around the globe fostered through free trade.

Comparison of Economic Development in India, USA and China

  • India and USA are the two largest democratic countries of the world and India and China are neighbor as well as developing counties.

  • Indian economy is mixed economy, USA economy is capitalist economy and China economy is socialist economy.

Brief Account of USA Economy

USA is world’s one of the most – developed economies. In USA private sector plays a major role in production of goods and services. There are 30 million small businesses in USA. 40% of world’s richest people stay in USA. USA’s agriculture is also very advanced. 85 percent of children enter public schools in USA. USA is one of the top three exporters of goods and services in the world and biggest importer from rest of the world. Inspite of its richness USA does have poverty and unemployment.

The Economy of China

Chinese economy is world’s second largest economy. China’s national income and per capita income are growing faster than India’s. Today China’s standard of living has improved so much that its poverty ratio fell from 51 percent in 1981 to 2.5 percent in 2005 while India had 27.5 percent of poor population at that time.

Developed by: