Question

What are the competitive advantages of India?
What is benefits and purpose of having trade agreements of a country and countries operating in that country?

Answer 1

Solution:-

Competitive Advantages of India

               Althogh india is a poor country,it has a strong competitive advantage in knowledge based services .Increasing level of contribution to india’s GDP come from the service sector, which has a much more globel presence than other sectors.Today,india is considered to be one of the major forces in the global economic market.Though india is developing country,its economy has a major impact on global trading.The majority of worlds leading developed nations are keen to have tied with india. This is because in the current scenario of globalization india is seen as a wonderland of investments.

    The government of india has take several initiatives to attract foreign investment in india’s Diverse sectors.it has announced a number of attractive schemes and policies from time to time to lure investments.Labour costs in india increases every year and in certain fields,such as software,employee feels that they will not get any further increment in their salaries .This plays a crucial role in protecting the cost benefits of foreign firms to invest in india.

       Competitive advantages of india for FDI in retail sector

               According to CRISIL (2012) analyzed that the organized retail is penetrated in india retail market at the 10% growth rate.in 2006-07 total retail market was Rs 10 trillion and organized retail had Rs 0.6 trillion market size.The retail sector account for 22% of india GDP and contributes to 8% of total employement.A.T Kearney released a report on FDI provides a unique look at the present and future prospects of international investment flow.In their analysis india come on the second ranking of FDI confidence index,this will possible because of current stand of indian government for the promotion of FDI policy in india.

Benefits and Purpose of Trade agreement between Countries

                Countries enter in to trade agreements for the purpose of raising taxes. The agreement will help countries to import goods they cannot produce it easily. The trade agreement helps to lower tariffs and taxes. Generally counties enter in to trade agreement to be able to sell their products very easily. Actually a trade agreement is a treaty between two or more countries where trade agreements are established between them, declaring as it will be the control of taxes , tariffs, and trade that will exist between the countries. Most of the trade agreements seeks to reduce or eliminating taxes ,tariffs or marketing restrictions between the signatory countries.

           Trade agreement will promote regional economic integration and build shared approaches to trade and invest between them.Trade agreement will also help address behind the border barriers that would otherwise impede the flow of goods and services, encourage investments, e commerce business etc..