India presents one of the strategic growth areas for e-commerce companies all over the world. In fact, this has so much been the case that various international brands such as Amazon and Alibaba are seeking to find investment opportunities in the Indian market. This paper considers India’s economic background, its national goals for trade and significant political activity affecting its operation as a potential investment region.
India Economic Background
The history of India economy begins with the Indus valley civilization (2800 BC - 1800 BC). This economy largely depended on agriculture, domestication of animals, making of tools and weapons from copper and tin and trade with Middle Eastern peoples. During the second urbanization, a number of urban centers grew in North India. This gave a major boost to trade and commerce. The ancient Indians mostly traded with far off lands like the Middle East, the Roman Empire and the South East Asia. Many Indian trading colonies were settled in other countries (Pekkanen, Ravenhill, & Foot, 2014). Therefore, India has always been a business hub even within its historical background.
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In the last three decades, India’s economy has been marked as one of the fastest growing economies in the world. This has made it an attractive investment destination in the world. With the introduction of foreign direct investment (FDI) in several sectors, India has become an eye-catching destination for overseas investors. The relaxation of norms by the government has also created a vast opportunity for foreign players, who are competing for a greater role in the Indian market. Sectors projected to do well in the coming years include automotive, technology, life sciences and consumer products.
National Goals
The main national objective is to achieve the goal of economic development. This will help to solve the problems of general poverty and unemployment in the country. Better utilization of human resource and increasing employment opportunities is another objective. This is to tap into the 1.2 billion strong population that presents human labor in the Indian market. It has been a national goal that the country becomes food secure as well as self-sufficient by producing industrial raw material such iron and vehicles among others. This, in turn, will help reduce foreign aid by increasing export trade. Each Plan and goal has aimed at reducing economic inequalities.
National Trade Policies and Emerging Trends
Education has been made a pillar of India’s economy. The government has formulated education policy in order to deal with adult literacy, thereby providing skilled labor in the Indian market. As a result, the populace has now been equipped with financial management skills through skill development initiatives which educate learners on trends in market prices, total risk development and vulnerability reduction and promotion of woman and child development (Bajpai, 1995).
Political Events Leading to Improved Economic Environment
Demonetization has led to mixed success. Last year, Prime Minister Modi declared that India’s highest-denomination banknotes accounts for 86% of cash (Shephard, 2017). This has proven to have long-term benefits as it has increased the number of digital transactions being conducted within India’s economy, making it easier to track and to tax. The government has carried out some economic reforms. This includes the passage of the GST multiple tax rates (Bajpai, 1995). This reform does enough to keep the economic momentum going.
On the other hand, noisy democracy has greatly brought risks to the India economy. The Indian government blames the euro crisis for contributing to the slowdown, but the current mess is largely self-inflicted. Corruption seriously affects India’s economy. The increasing rate of corruption scandals since the late 2000s have damaged the government’s integrity. It has therefore caused major loss in tax revenues, led to social unrest and widened income inequality (Gilmartin, 2009).
References
Bajpai, A. D. (1995). Emerging trends in Indian economy: papers in honour of Prof. Daya Shankar Nag. New Delhi: Atlantic.
Gilmartin, D. (2009). Empire, Identity, and India: Peasants, Political Economy and Law. Chicago: The Historian.
Pekkanen, S. M., Ravenhill, J., & Foot, R. (2014). Oxford handbook of the international relations of Asia. Oxford: Oxford University Press.
Shephard, W. (2017). How India Is Surviving Post-Demonetization . Retrieved from Forbes: https://www.forbes.com/sites/wadeshepard/2017/07/29/how-india-is-surviving-post-demonetization/#50cf66221164
