Integrating India’s domestic economy with both trade and capital growth has resulted in a boost in the country’s foreign trade relations in the past decade. India’s strong foreign trade policy is one of the primary reason India has emerged as an economic powerhouse, facilitating easy and safe trade with foreign nations. India’s trade policy has proven very beneficial in the economic sector and the overall economic growth and per capita income have improved in the past few years.
Current events in the nation’s foreign trade domain
1 – ASEAN dominance
On 26 January 2018, members of the Association of South East Asian Countries (ASEAN) gathered in India and were guests of honour at the Republic Day celebration. Prime Minister Narendra Modi’s travel to foreign countries has further strengthened India’s economic relations with other countries. The new policies adopted by India show the willingness to open their trade channels for other countries in order to accelerate economic growth and take it to new heights.
The member countries of ASEAN work together to help each other boost their trades and incomes. With countries already being involved in China’s Belt and Road initiative, they are careful as China’s land disputes, and other political tiffs have been rampant. India has benefitted a lot from this by providing an alternate leadership path as compared to China further boosting trade relations.
2 – Foreign Trade Outlook going the Right Way
India’s Prime Minister, visited Palestine while on his trip to the UAE and Oman. This visit was the first by any Indian Prime Minister and it showed India’s willingness to strengthen foreign relations with other nations to accelerate growth. The maiden visit to Israel was also a step in the direction of strong foreign trade relations.
While the leadership in Israel and Palestine have nothing in common, India continues to enjoy tremendous goodwill in both nations. This can be a good sign for foreign trade from India’s point of view. In addition to trade and energy supplies, India has forged close security ties with its West Asian counterparts. This too has made a positive impact on the Foreign Trade Policy of India.
How does it complement the political climate?
Financial reform actions should not be overshadowed by petty political pressures. A classic example is the recent raise in import duties announced by the Prime Minister. While it may have been done keeping the 2019 elections in mind, it is also counter-effective to building a dominant position in West Asia and to ensure a protectionist regime for locals. The rise in import duties on parts for electronics, mobiles, and automotive items is likely to have trading partners like US and Germany to look at China as an alternative for exporting goods.
Along with the various cross border initiatives by Prime Minister Narendra Modi and the increasing Foreign Direct Investment (FDIs) and Foreign Institutional Investments (FIIs) it shows that the environment is conducive for India’s Foreign Trade Policy.