India’s rising trade

Rising of imports and exports is a healthy sign of Indian economy. It simply connotes the fact that the circular flow of economy has swung into action. The rising imports will have beneficial impact upon the “consumerism” domestic economy, as now, more products in the market reflects the augmented purchasing power of the people. The increased purchasing capacity will provide a stimulus to the erstwhile stagnant economy.
Rising imports will have the favourable impact upon the countries, exporting their products to India. High exports will deliver a flip to the growth of those nations by aggravating the production capacity and thereby, recharging and rejuvenating the production function of these nations. This will have then direct impact upon the increment of the job opportunities of the people of those nations. All this interdependence among the different nations, signifies and reveal the sensitivity of the global economy.
But, India needs to be cautious at this juncture. It has to keep managing her balance of trade, which can have tremendous impact upon the exchange rate and other macro- variables. India is loaded with high trade deficit of around $15.44 billion by dec 2020. Keeping this background in mind, the rising imports doesn’t seems to be a too upbeat moment for India. It would be better, if it only serve as the initial point and not the whole story in itself. Where on the one hand, Imports serve as the leakage, exports, on the other hand, transformed itself into multiplier effect. This multiplier has huge potential of generating the consumption engine of the economy.

In the post-covid world, when the economic equations around the world will change, India has to load her arsenals with the economic fundamentals. This requires rectifying and streamlining the macro- economic fundamentals.
India’s growth story is very much biased towards the service sector, time is now ripe for shifting this balance in consonance with the changing scenario of the world.

About the author

vipal

My name is Vipal Bhagat, going to be doctorate in applied economics. My aim is to analyse and interpret the current economic happenings around us, according to the core and basic principles of economics.

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