REASONS OF THE RUPPEE DEPRECIATION One of the main reasons for the depreciating rupee is the widening current account deficit. India is running a persistent current account deficit in excess of 5% of GDP for the last several years. This can be seen in the chart below. Throughout the 1990s, India's merchandise exports expanded rapidly in line with the country's economic liberalization. The impressive growth continued in 2002–08, reflecting continued demand from its traditional and new markets even in an environment of slowing global demand, and likely reflecting India's relative competitiveness vis-à-vis other emerging markets. India's exports are also well diversified, comprising textiles and garments, automobile parts, and chemicals and pharmaceuticals. As with the country's outflow of commodities, India's imports expanded over the 1990s as demand rose for raw materials and consumer goods in the burgeoning economy. India's domestic demand remains far stronger than external demand, resulting in relatively sharp higher imports. (India Country Monitor, Dec2013, p. 18) The current account deficit was moderate till 2009, however became alarming in 2010 because the west went into a recession and the entire world was facing financial turmoil. So the Indian export sector was hit hard by the sharp ad protracted global recession, but the imports continued because the Indian economy was doing well. India's large trade deficit is primarily attributable to a rise in non-oil imports and investment goods in particular. Thus the country's need for energy import and import of other raw materials and commodities steadily kept going up. India's crude oil production is virtually stagnant at around 30 million barrels per annum and that of coal a... ... middle of paper ... ...ntelligence: Report. EBSCO Industries, Inc. India Country Monitor. (Dec2013). Country Intelligence: Report: India. EBSCO Host. India times. (Jan2014). 10 reasons why rupee is sinking each passing day. MarketLine Industry Profile. ( Aug 2013). Construction & Engineering Industry Profile: India. Market line, p1-35. 35p. Money Today. (Jan2014). What to expect from various sectors in 2014. Money Today, p14-14. 1p. Money Today. (Sep2013). How RBI steps to check Re fall impact you. EBSCO Host, p3-3. 1p. S.K.Ray. (2007). The Indian Economy. New Delhi, India : Asoke K. Ghosh, Prentice-Hall of India Privatte Limited. Vadra, R. (July1, 2012). State Level Initiatives of Power Sector Reforms in India. Journal of Institute of Public Enterprise , 1- 2. Venkataraman, N. (August 2013). Falling rupee reflect alarming signals. CHEMICAL BUSINESS, Vol. 27 Issue 8, p9-10. 2p.
Though the world economy as a whole has grown in recent years, a factor that is not taken into account is that the number “of the poor in the world has increased by 100 million” (Roy 3). In other words, the gap between rich and poor is widening. For India, this has startling implications. Though it is a nation that is developing in many ways, it also is a nation blessed with over one billion citizens, a population tally that continues to grow at a rapid rate. This population increase will greatly tax resources, which can create a setback in the development process. The tragedy, of course, is that the world is full of resources and wealth. In fact, Roy quotes a statistic showing that corporations, and not even just countries, represent 51 of the 100 largest economies in the world (Roy 3). For a country struggling to develop, such information is disheartening. However, there is also a more nefarious consequence of the growing disparity between rich and poor, and power and money being concentrated in the hands of multinational corporations: war is propagated in the name of resource acquisition, and corruption can reign as multinationals seek confederates in developing countries that will help companies drive through their plans, resulting in not only environmental destruction but also the subversion of democracy (Roy 3).
The economic and technological development since the twentieth century has been fuelled mainly by oil, just as the early industrial revolution of the eighteenth and nineteenth centuries has been fuelled by coal. ...
Global trade patterns have changed greatly from 1750 to the present. Certain regions have gained and lost their importance to the world wide economy. This shift in trade from the Indian Ocean to the Atlantic, and finally to the Pacific highlights how different factors influence the demand for different goods.
"Oil Imports and Exports - Energy Explained, Your Guide To Understanding Energy." Web. 26 May 2011. .
The U.S. trade deficit has risen more or less steadily since 1992. In the second quarter of 2004, the trade deficit relative to GDP surpassed the 5 percent mark for the first time. Many economists already considered trade deficits above 4 percent of GDP dangerously high. The fear is that continued growth in this external imbalance of the U.S. economy will ultimately spook overseas investors. http://www.americanprogress.org/issues/2004/09/b193700.html
Walker, Bruce. "Euro Likely to Keep Losing Value." The New American. The New American Magazine, 7 July 2010. Web. 23 May 2011. .
[6] Kripalani, Majeet & Egnardio, Pete. The Rise Of India. Business Week Online. December 8, 2003. http://www.businessweek.com/magazine/content/03_49/b3861001_mz001.htm
Subramanian, Arvind. India’s Economy is stumbling? The New York Times. August 31, 2013: A19. Print.
ii. Placed against targets to achieve 65 percent of the international market by 2010, India’s gem and jewellery industry has registered an impressive 21.33 percent growth in exports
Because of the increase in the profit India imported 184.5 million tonnes crude oil in 2012-13 as the supply of the oil improved and the demand decreased.
This coupled with rising number of coal-fired power plants being set up in India to supply electricity for its vast population as well as India’s favorable geographical position towards Indonesia is evidence to Indonesia’s comparative advantage in the production and export of coal. Also, the domestic consumption of coal in Indonesia is relatively low. Therefore, the high national production along with high foreign demand leads to a scenario of larger
...based energy system at the expenses of energy resources. The complex geopolitics required Indonesia maintaining a relative stable international relationships with its allies by long-term energy supply. Through multilateral cooperation, Indonesia can easily upgrading its energy industry by setting up hydro plants and thermal plants instead of its coal plants. Importing equipment and hiring skillful experts from advanced country contributes to Indonesia auto research and management innovation in energy sector. An improvement in energy producing efficiency can great alleviate energy poverty and cut carbon dioxide emissions and to some extent better management in energy consumption.
In 1996, the US current account and emerging market plus developing country current account were each about zero. In 2008, US current account was in deficit by $ 600 bn, the emerging market/developing country current account in surplus by $ 900 bn. (sect. 1.1)
During this period, global consumer price inflation presented a trend of fluctuation reduction. According to World Bank data (2015), world real GDP growth slightly which is from 2.4 to 3.3 in 2012-2016. Moreover, weaker investment environment lead to the job creation rate decrease of 1.4% every year after 2011, the unemployment rate is high correspondingly (world economic situation prospects 2016). Industrial commodities like energy, metals and minerals both decline more than 35 each from the beginning of 2011 to the end of 2014 and this trend will continue (World Bank 2015). Meanwhile, China as the world’s largest exporter and the second largest importer country, economic growth becomes slowing than before (Chen 2016). It has the significant impact on the global trading environment. At the same time, global trading volume
Machiraju, H. R. , 2002. International Financial Markets And India. 1st ed. New Delhi: New Age International.