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  Authors

Dr.D.Princy

  Keywords

Trade Policy, WTO, Economic Growth, Balance of Payments

  Abstract


The Indian economy has been experiencing a major transformation since 1990's in the wake of unilateral economic reforms initiated since 1991 and the reorientation of the economy in accordance with the rules and regulations within the multilateral framework of GATT/WTO. Accordingly, the globalization of production process, market for goods as well as financial markets has been initiated, though slowly. This has generated debate on the linkage between trade policy and economic growth, in addition to other variables, the balance of payments and current account deficits. In this paper an effort has been made to study the impact of trade policy on India's economic growth, balance of payments and current account deficit. The evidence suggests that the trade liberalization policies pursued in India played a positive role in influencing economic growth. Indian exports have been doubled in dollar terms and there is an evidence of export diversification. Imports have been rising continuously and the current account showed a surplus in recent years. Empirical analysis on BOP indicates a statistically significant change during liberalization period. Finally, the open policies seem to have influenced current account balances positively. Finally, the evidence presented by us suggests that the expansion of the government sector is detrimental to growth, i. e., the government led-growth thesis is rejected by the data. An examination of this thesis at a disaggregated level shows that while the expansion of government investment has a negative impact on growth, the impact of growth in government consumption is insignificant. An interesting finding emerging from our study is that the investment ratio has an insignificant impact on growth in India The policy conclusion emerging from this study is that export pessimism of the past was misplaced and India would do well to pursue export expansion much more vigorously than hitherto. This would require policies aimed at offsetting the earlier anti-export bias, such as an aggressive exchange rate policy, lowering the degree and dispersion of protection further, de-reservation of (removal of reservation status for) the small-scale sector and liberalisation of the agricultural and consumer goods sectors.

  IJCRT's Publication Details

  Unique Identification Number - IJCRT2402259

  Paper ID - 251072

  Author type - Indian Author

  Page Number(s) - c249-c255

  Pubished in - Volume 12 | Issue 2 | February 2024

  DOI (Digital Object Identifier) -   

  No Of Downloads - 38

  Author Country - India, 600014, Chennai, Chennai, 600014, Arts All

  Publisher Name - IJPUBLICATION | www.ijcrt.org | ISSN : 2320-2882

  E-ISSN Number - 2320-2882

  Published Paper PDF : - http://www.ijcrt.org/papers/IJCRT2402259

  Published Paper URL: : - http://ijcrt.org/viewfull.php?&p_id=IJCRT2402259

  Published Paper PDF Downlaod: - download.php?file=IJCRT2402259

  Cite this article

Dr.D.Princy,   "A Study on the Impact of Foreign Trade on Economic Growth of India", International Journal of Creative Research Thoughts (IJCRT), ISSN:2320-2882, Volume.12, Issue 2, pp.c249-c255, February 2024, Available at :http://www.ijcrt.org/papers/IJCRT2402259.pdf

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