The
United States and India have been having an agreement for years to set up trade
between the two countries. But India being the third largest economy in the
world they are the 13th largest trading partner with the United States.
This is due in large part to the trade restrictions that India put on their
trades with other countries. As found in India
Undermines Its Own Economy. This
talks about how India puts unfair amounts of tariffs on goods at the borders. They
also have enormous amounts of restriction on entries to new industry. These tariffs and other restrictions that
India is putting on its own economy is making it hurt badly. This can be seen
by the fact that their economy is only going to grow at 5% witch is its lowest
in a decade.
By
doing these things to its own people leads to America not wanting to trade with
them. This causes their terms of trade to drop; this is because if there is no
one out there trading with you then your terms of trade is going to drop. This
can be caused by the import price going through the roof because other countries
might tax you for their goods. By doing this though the U.S. is also hurting
its own terms of trade because they are taking the third largest economy off
the list because it has weird laws. This
cuts into the Unites States terms of trade decreasing also, because they are missing
out on all the demand from India if they were to trade more with them. So the
price of our exports will drop not dramatically but somewhat thus hurting our
terms of trade. So I ask you do you think that in order to help both of our
countries should we open up more trade with India?
The U.S. should not open up more trade with India for that being said simply. If India decreased their tariffs, India and other countries will benefit will benefit. It will allow for more trade with other countries both importing and exporting. The import tariffs hurt India and all trading companies. The terms of trade for India will improve when they decrease the tariffs because their import prices will go down. Unless the export prices lower more than the tariff decrease, India's will have better terms of trade. For other countries that trade with India, such as the U.S., it will be beneficial to their terms of trade too. Their prices of exports to India will decrease because of the lessened or abolished tariff but also the imports from India will have a lower price since there is more in world supply. I think if India were to decrease their tariffs, there would be more of a demand to export there and it would be better for the countries like the U.S.
ReplyDeleteI think that the U.S. and India should open up more trade with each other, because when they just trade a little with each other, both of their terms of trade are low, which are bad for their countries. If India can decrease tariffs, more products will be imported by Indians and the U.S. can export more. At the same time, Americans are willing to import from India. As we known, India has the second largest population all around the world and has relative less capital than the U.S.. Thus, India is labor abundant, which can gain from exporting labor-intensive goods. If it does not improve its exports, products will be surplus and many people will lose their jobs. But if it can trade more freely, these problems can be solved and it can gain a lot. For the U.S., it is capital abundant and should export capital-intensive goods. Because of the large population in India, its consumption power is also high. When these two countries trade more freely together, it allows the U.S. to export more capital-intensive products to India. During this process, both of these two countries can gain.
ReplyDeleteIf India lowered its tariffs, it would be beneficial for the US to open trade with the country. By doing so, our terms of trade would be lowered due to the size of India's economy and the amount of goods the country would add to the market. The US might benefit from opening to trade even with India's restrictive tariffs, but perhaps not enough to make the decision worth giving into. We would benefit from having the additional demand of India's market for our exports as well as importing those goods which India is more efficient at producing. India would be benefiting its own country and better their terms of trade as well if they loosened their trade restrictions and allowed for more trade.
ReplyDeleteThe U.S. should open up more trade with India. Initially, US-India bilateral trade has nevertheless doubled every 5 years since 2002 and is approaching the $100 billion mark. I think that India will become one of the world's biggest drivers of middle-class growth in 10 years, India is a powerful friend for trading. Secondly, the rich human capital and vast consumer market will complement US strengths in technology, advanced manufacturing and finance.Moreover, liberalized trade with the US would help India eliminate the importing-tariff and regulatory barriers that penalize Indian consumers, while improving market access for Indian exporters.
ReplyDelete