India Goes Global--Chapter 4

Chapter 4: Maintaining Competitiveness in the Global Economy

Well, I enjoyed this chapter, but after spending some time reading this book, I feel like it is too much like the previous book I read to continue. Although I find it interesting, I also am aware of the short time left in this semester. I want to focus in more on Calcutta (where we will be going--yay!) from this point more specifically. Anyways, with all of that said, this chapter discussed the imports and exports in India. As with most everything else, it seems, India is improving--but is still behind other countries it its share of global exports.

Since 2002, the rupee (the Indian dollar) has appreciated by approximately 6% to 8% against the United States dollar. Imports have also been growing at a rapid rate, along with an acceleration of export growth. The export growth is led by service exports, and exports account for about 1/5 of the Indian Gross Domestic Product. This is up 10% from where it was 10 years ago. But, like I previously stated, although progress is being made, India's export performance has lagged that of Asia and its share of global exports remains low. The author of the book is surprised that India has not made larger gains in world export markets because of India's low wages and strong productivity growth. The author states that "steps to lower trade tariffs and non tariff barriers and improve the investment climate, as well as flexibility in exchange, rate management, will be key if India is to build on its advantages and become a leading exporter." This seems to be a common thread, but India has made progress, but still has a ways to go before it attains a level of market penetration that can compete with its rival Asian neighbors.