In today’s globalization era, international trade has changed the world drastically. Therefore, it is vital for investors, economists and policymakers to scan the world markets to find opportunities to diversify the products, markets and trade. They set priorities based on a country’s trade promotion, trade development strategies, sector-wise performance, and trade data in order to track the growth and potential for possible international tie-ups. India has always been a lucrative market for international trade because of its large population and high volume export and import capabilities.
In the last decade, the costs of transport and communication have decreased across the world. In result, the preferential trade agreements have emerged as a common phenomenon especially in developing countries. Last year, despite growing uncertainties on global markets, the growth in volume of global trade rose from 1.3% in 2016 to 2.4% in 2017. This year, WTO (World Trade Organization) has anticipated the merchandise trade volume growth of 4.4% as measured by the average of exports and imports. This progress can help the emerging market to revive their economies. However, the weak link between global trade and global growth can be challenge with the ratio even falling below 1:1 level.
Trade data shows that India’s merchandise exports boosted at moderate pace of 4.5% to US$ 25.83 billion in February 2018. Though the import data shows that import growth fell sharply to 10.4% at US$ 37.81 billion. The trade deficit narrowed to five month low of US$ 11.98 billion in February 2018 from US$ 16.3 billion in January 2018. Apart from oil imports, the industries that helped in this growth were electronic goods machinery, electrical & non-electrical, pearls, precious & semi-precious stones, organic & inorganic chemicals, coal, coke & briquettes, artificial resins, plastic materials, non-ferrous metals, and iron & steel.
In 2017, Asia had the fastest trade volume growth among all regions on both the export side (6.7%) as well as the import side (9.6%) following two years of tepid expansion. In April this year, WTO Director-General Roberto Azevêdo at the Annual Investment Meeting (AIM) said, “The growth in trade will be vital in fueling the economic growth and recovery while supporting the job creation, especially in developing countries. Though, this progress can be harmed by the restrictive policies by some governments. No issue is more urgent today than reviving global economic cooperation, liberalisation and growth.” While the trade world took positive initiatives, the Donald Trump administration put some difficult amendments for companies and individuals to get H-1B Visa. For ‘initial employment’, the number of H-1B visas for Indians dropped by 4% in September 2017, covering the period of 12 months.
For investors, it is imperative to find a potential economy for investment by examining the policies and understandings towards ease of doing business in a country including quality of infrastructure, regulatory conditions, and foreign investment friendliness among others. Easier to move goods in the country, easier for consumers to buy the products. The investors who consider these factors always have the leading edge in international trade market.
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