World Trade Pattern

It is said that the world is witnessing a shift in trade pattern driven by various factors. Analyse this shift and examine what this shift implies for India. (200 Words)

The Shift
  • Post 2008 Sub-prime crisis, Keynesian macroeconomics model entailed in the US, which is [was] based on improving the demand, which encompassed massive bond buying and cheap money quantitative easing programme. And similar Suit is followed by Eurozone and Japan. This Resulted in ‚ÄúStrengthening Rupee in respect to various currencies”
  • Powerhouse of Trade China has been showing decreasing trade numbers, both in exports and imports. Such is also affecting those economies like Australia and brazil from which “raw material ” was sought by china
  • Now Meanwhile Commodities priced mainly energy viz. oil have plummeted Hence it affected such Oil based economies. In this scenario with greater money availability in those advanced economies and lower value of Energy products have caused accumulation of Surplus viz. Germany which is approx. 7-8% of GDP.
From past experiences, such surplus will be re-invested in “emerging World” The Shift and its Meaning to India:
  • Greater foreign investment
  • Well timed Diplomacy of Indian prime minister in his recent German visit
  • Low Chinese trade number can help increasing Indian’s export competitiveness
  • Just with Conducive trade environment and red carpet and not red tape can help in gaining from this environment
  • Rupee is strengthened as a result of past quantitative easing in Advanced economies. Slight moderation and Watch over Yuan can help boost the Indian economy

 

 

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