India’s major exports consist of petroleum products, textile goods, gems and jewelry, engineering goods, chemicals and leather manufactures. Their major imports consist of crude oil, machinery, gems, fertilizer and chemicals. India’s trade is somewhat restricted, but they are moving towards free trade. (India Lower Tariffs) India tariff rate for manufactures is 34.1%. For clothing the tariff rate is 40% and textiles are 39%. Developing countries are much lower. For manufactures the tariff average is 13.5% and 18.1% for textiles. (OECD) Traditionally India has been a closed market from the west and even the east. The World Bank has been working with the Indian government to develop a plan to start domestic reform and international negotiations. Right now India has concentrated on trading within Asia. They have made trade agreements to ease tariffs with Bangladesh, Bhutan, Sri Lanka, Maldives, China, and South Korea. Even though India’s trade is restricted they still are investing in capital inside the country which will lead to short-term growth which would boost their GDP even more. In the situation of trade between the US and India, India has the comparative advantage in producing textiles and the US has comparative advantage in crude oil which is a major import for India. Since India has moved towards a free trade market their GDP has increased steadily showing a large correlations between trade and well being of the country. (World Bank)
Workman, Daniel. "India Invests In Lower Tariffs." Editorial. Suite101. N.p., 28 Jan. 2007. Web. 30 Nov. 2009.
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"India: Foreign Trade Policy." Editorial. International Economics & Trade in South Asia. World Bank, n.d. Web. 30 Nov. 2009 http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/SOUTHASIAEXT/EXTSARREGTOPINTECOTRA/0,,contentMDK:20592520~menuPK:579454~pagePK:34004173~piPK:34003707~theSitePK:579448,00.html.
"Simple Average Tariffs, Selected Countries." Organisation For Economic CO-Operation And Development. N.p., n.d. Web. 9 Dec. 2009. .
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