Economic and Political Situation in India

Paper Info
Page count 2
Word count 557
Read time 3 min
Subject Economics
Type Essay
Language 🇺🇸 US

Global Meltdown and Indian Economy

The evident connections between macroeconomics, money, and finance are one of the primary aspects to focus on when entering a market in a foreign country. Thus, to enter the Indian market and start developing the business there, it is crucial to get information on its financial stability, macroprudential regulation, as well as asset prices. India is experiencing a currency crisis which has been a major contributor to negative aspects of the country’s macroprudential regulatory structure of the country.

It is important to mention that the supervisory and regulatory bodies were largely criticized for their actions towards preventing the crisis or managing it (Khasnabis and Chakraborty 11).

When entering the Indian market, the management should consider the negative economic aspects of the Indian market and adapt to them accordingly.

Effect of the Indian Economy in the U.S.

According to the report conducted by the United States International Trade Commission, the part of American companies that were greatly negatively affected by the strict Indian policies ranged between 18 percent in 2007 and 26 percent in 2013 (5).

Thus, to respond to barriers provided by the Indian policies, the majority of the companies tried to target fewer resources to the market. Taxes and financial regulations are the two main areas in which the U.S. companies experienced the most pressure from the Indian policies. However, there is a solution for increasing U.S. investments in India. If the restriction in taxes and investments were eliminated and established similarly as in American or European economies, the U.S. exports to India would increase by approximately two thirds while the American investments to India would increase twice the amount.

To extend the company’s coverage and proceed with investing and working in India, it is crucial to weigh all the advantages and disadvantages of the restrictions put by the Indian government on foreign investors.

India Overcoming China for Foreign Investments

Even though the previous memo discussed the negative impact Indian policies had on the American investors in India, it is important to look at the positive aspects of the Indian economy and its effect on foreign investments. According to Panda’s article on The Diplomate, India was the primary recipient of foreign investments in 2015 (par. 1). Thus, over the last year, India experienced major GDP growth due to foreign investments.

Furthermore, the gap between the Indian and the Chinese investments from foreigners was approximately sixty-three billion dollars. Thus, with China experiencing twenty-four percent in capital investments, India is currently the top recipient of foreign investments.

The company has great potential for growth when it comes to extending its business in India. By overcoming China in foreign investments, India is nowadays the primary recipient of global investments.

Justice in India

According to The Economist article “Justice in India: Dropping the Scales” the justice system in India can be called paradoxical (par. 2). The complex structure of the federal system of India and the slowly developing Parliament do not allow for the court to make rational and thought-through decisions in terms of improving the already existing laws that are no longer sustainable. Such an inability for change is evidenced by the recent ruling against the petition to change the 156-year-old law on defamation. The court upheld the law created in the colonial era, refusing to agree with the progressive views of the politicians.

Works Cited

Khasnabis, Ratan, and Indrani Chakraborty. Market, Regulations, and Finance: Global Meltdown and the Indian Economy. New Delhi, India: Springer. 2014. Print.

Panda, Ankit. India Takes Over From China as Top Global FDI Destination in 2015. 2016. Web.

The Economist. Justice in India: Dropping the Scales. 2016. Web.

United States International Trade Commission. Trade, Investment, and Industrial Policies in India: Effects on the U.S. Economy. 2014. Web.

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EduRaven. (2021, October 31). Economic and Political Situation in India. Retrieved from https://eduraven.com/economic-and-political-situation-in-india/

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EduRaven. (2021, October 31). Economic and Political Situation in India. https://eduraven.com/economic-and-political-situation-in-india/

Work Cited

"Economic and Political Situation in India." EduRaven, 31 Oct. 2021, eduraven.com/economic-and-political-situation-in-india/.

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EduRaven. (2021) 'Economic and Political Situation in India'. 31 October.

References

EduRaven. 2021. "Economic and Political Situation in India." October 31, 2021. https://eduraven.com/economic-and-political-situation-in-india/.

1. EduRaven. "Economic and Political Situation in India." October 31, 2021. https://eduraven.com/economic-and-political-situation-in-india/.


Bibliography


EduRaven. "Economic and Political Situation in India." October 31, 2021. https://eduraven.com/economic-and-political-situation-in-india/.

References

EduRaven. 2021. "Economic and Political Situation in India." October 31, 2021. https://eduraven.com/economic-and-political-situation-in-india/.

1. EduRaven. "Economic and Political Situation in India." October 31, 2021. https://eduraven.com/economic-and-political-situation-in-india/.


Bibliography


EduRaven. "Economic and Political Situation in India." October 31, 2021. https://eduraven.com/economic-and-political-situation-in-india/.