The paper "Emerging Market Economy - India’ s Industrial Structure " is an outstanding example of a macro and microeconomics case study. OECD breakdown of the patterns of trade and growth in six of the biggest non-OECD economies, which are: Brazil, Russia, India, Indonesia, China and South Africa, BRIICS shows that countries, as well as sectors that have largely opened, benefited the most in terms of growth. Several indicators indicate that some BRIICS have taken full advantage of openings offered by global services markets. The manner in which domestic industrial structure impacts either exporting or outward foreign investment is a subject matter considered essential in the area of economics as well as strategy.
Studies exploring the industrial arrangement in the home country reveal that international expansion has, in general, made stronger firms’ domestic market position along with the firm character that has enabled international expansion (Davies & Geroski, 1997). Hence, the superior gains probably rising from international expansion can spawn capital to stimulate investments in marketing, technological along with other abilities and boost the oligopolistic life of local industries in which overseas run firms play a part.
In the milieu of entrepreneurship, the industry structure is imperative, as it influences new undertakings, performance, as well as strategies, although in a domestic environment (Krugman, 1994). Below this paper explores India’ s industrial structure in a bid to unearth the effects it's opening to the world markets could have had on the economy. It is also important to look at macro-economic indicators and note their patterns. Lastly, trade theories and the relationship with each of the BRIICS are explored in order to identify the path followed by each country. Industrial Structure In the 1950s to the 1970s following India’ s attainment of independence in 1947, the economy was mainly agriculture-based with a diminutive services sector mainly involving government monopolies.
The services sector constituted 29.8 percent of GDP in the 1950s. Even though there was development in the service sector in the mid-1980s, much growth was experienced in the 1990s as soon as India kicked off a string of economic reforms subsequent to a cruel balance of payment predicament that befell the country then. The economic reforms were general in nature, but specific reforms that had an impact on the services sector included the amputation of foreign direct investment boundaries and a shake-up of authorization actions, which led to advanced privatization (Agrawal, 2007). India’ s the trade and industry transformation has sidestepped industrial expansion straight away to commencement of express development of the services sector.
This contrasted the majority of developing economies, where normally economic structure shift from agricultural to industrial ahead of progressively growing the service sector. At present, the services sector is leading in terms of growth in India.
The services sector contributes considerably to GDP growth, job creation, as well as trade and investment (Arora, 2001). Still, for the duration of the global financial crisis as of 2008 to 2009, the services sector stayed put to peripheral shocks. In 2009-10, the sector attracted a growth of 9.96 percent measured up against a growth of 8.81 percent in industries and a growth of 1.57 percent in agriculture. The brisk expansion of the services sector in India more than the past two decades is believed to be as a result of trade liberalisation plus reforms of the 1990s (Desai, 2005).
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