Which of the following is an impact of globalization on India's trade?

Correct option is C

The correct answer is (c) It has increased the volume and diversity of trade

• Globalization has significantly impacted India's trade by increasing the volume and diversity of trade.

• The liberalization of trade policies, the opening of international markets, and advancements in technology have led to India increasing its trade with various countries across the globe.

• As a result, India has witnessed a growth in exports and imports, with a greater variety of goods and services being traded. This includes products like information technology services, textiles, pharmaceuticals, and agricultural products.

Information Booster:

• Impact of Globalization on India’s Trade:

  • Increased trade volume: The adoption of trade liberalization policies in the early 1990s opened up new markets for Indian businesses, leading to a surge in both imports and exports.

  • Diversity of trade: With globalization, India has diversified its export base to include high-tech products, software services, and luxury goods, in addition to traditional exports like textiles and agricultural products.

  • Access to international markets: Indian companies now have access to a broader array of international markets, contributing to economic growth and global economic integration.

• Related Policies and Acts:

  • New Economic Policy (NEP), 1991:

    • Introduced by P.V. Narasimha Rao and Dr. Manmohan Singh, this policy marked a significant shift towards economic liberalization. It reduced tariffs, decreased import duties, and opened up the economy to foreign investment. This was a crucial policy for expanding India's trade volume and diversity.

  • Foreign Trade Policy (FTP) 2004-2009:

    • The Foreign Trade Policy aimed at enhancing exports and promoting trade relations. It provided incentives like duty drawbacks and export subsidies, further diversifying India’s trade portfolio.

  • Goods and Services Tax (GST) Act, 2017:

    • The GST streamlined India's tax system, helping to reduce the cascading effect of taxes and improving the flow of goods across borders. By simplifying the trade process, it made India more competitive in the global market.

  • Make in India (2014):

    • The Make in India initiative, launched by Prime Minister Narendra Modi, aims to boost manufacturing and exports, encouraging foreign companies to set up production facilities in India. It has also contributed to the diversification of trade by focusing on sectors like electronics, automobiles, and consumer goods.