Global Economy Indian Economy
Global Trade Relations
The Republic of India is the world's most-populous democracy and has one of the fastest economic growth rates in the world (8.9 percent GDP increase in 2007;( The second-fastest major economy in the world after China). With the world's fourth largest armed forces, and fourth largest economy (in PPP terms), it is considered to be a regional power and a potential superpower. It is India's growing international influence that increasingly gives it a more prominent voice in global affairs.
India has a long history of collaboration with several countries and is considered as a leader of the developing world. India was one of the founding members of several international organizations, most notably the United Nations, the Non-Aligned Movement, the Asian Development Bank and the G20 industrial nations. India has also played an important and influential role in other international organizations like East Asia Summit, World Trade Organization, IMF, G8+5 and IBSA Dialogue Forum. Regional organizations India is a part of include SAARC and BIMSTEC.
After India gained independence from the United Kingdom in 1947, it soon joined the Commonwealth of Nations and strongly supported independence movements in other colonies, like the Indonesian National Revolution. During the Cold War, India adopted a foreign policy of not aligning itself with any major power bloc. However, India developed close ties with the Soviet Union and received extensive military support from it. The end of the Cold War significantly affected Indian foreign policy, as it did for much of the world. The country now seeks to strengthen its diplomatic and economic ties with the United States, the People's Republic of China, the European Union, Japan, Israel, Mexico, and Brazil. India has also forged close ties with the member states of the Association of Southeast Asian Nations, the African Union, and the Arab League.
Though India continues to have a very strong military relationship with Russia, Israel has emerged as India's second largest military partner while India has built a strong strategic partnership with the United States reflecting India's balanced and soverign foreign policy.
India has taken part in several UN peacekeeping missions and in 2007, it was the second-largest troop contributor to the United Nations. India has also actively participated in UN reforms and is currently seeking a permanent seat in the UNSC, along with the G4 nations.
India currently accounts for 1.2% of World trade as of 2006 according to the WTO Until the liberalisation of 1991, India was largely and intentionally isolated from the world markets, to protect its fledging economy and to achieve self-reliance. Foreign trade was subject to import tariffs, export taxes and quantitative restrictions, while foreign direct investment was restricted by upper-limit equity participation, restrictions on technology transfer, export obligations and government approvals; these approvals were needed for nearly 60% of new FDI in the industrial sector. The restrictions ensured that FDI averaged only around $200M annually between 1985 and 1991; a large percentage of the capital flows consisted of foreign aid, commercial borrowing and deposits of non-resident Indians.
India's exports were stagnant for the first 15 years after independence, due to the predominance of tea, jute and cotton manufactures, demand for which was generally inelastic. Imports in the same period consisted predominantly of machinery, equipment and raw materials, due to nascent industrialisation. Since liberalisation, the value of India's international trade has become more broad-based and has risen to Rs. 63,080,109 crores in 2003–04 from Rs.1,250 crores in 1950–51.India's major trading partners are China, the US, the UAE, the UK, Japan and the EU. The exports during April 2007 were $12.31 billion up by 16% and import were $17.68 billion with an increase of 18.06% over the previous year.
India is a founding-member of General Agreement on Tariffs and Trade (GATT) since 1947 and its successor, the World Trade Organization. While participating actively in its general council meetings, India has been crucial in voicing the concerns of the developing world. For instance, India has continued its opposition to the inclusion of such matters as labour and environment issues and other non-tariff barriers into the WTO policies.