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Thursday, May 21, 2020

The likelihood that India would enjoy a comparative advantage of some products.



India has competitiveness in international trade as the country The Indian auto industry is one of the most competitive industries in the world, India was considered the fourth largest passenger car exporter after Japan, Thailand and South Korea in 2009 and it maintained the third position in the year 2010. The industry then grew in next years to have a growth rate of 17% in 2015 and maintain sales estimated with 4 million Dollars but in next years after 2015 growth stopped and the country stopped maintain competitive advantage over the world. (Singh, 2020) Oil and gas industry is one of the main six industries in India as it is a factor for the country's growth and economy development. The country depends on oil and gas manufacturing and marketing which represents 15% of the country's GDP. In relation to the foreign currency, exports from gas and oil industry represent a7% of the country's total exports. India has also different investment opportunities in the oil industry field that are in refinery as India is ranked the fifth in this category, retail as the country connects its success in automobile market to oil industry and gas that total used gas in India is consumed highly there but there is still continuous demand for it and it is suggested that natural gas share increase in India in 2025 to represent 205 from its current 8%. (Investindia, 2020)

India has growing level in computer industry which is internationally prevailing and facing great competition from China. India has comparative advantage in the field of telecommunication, information services and computer trade that has increased recently but in comparison to China, it is decreasing. The commerce ministry shows that the country is developing according to an analysis of comparative advantage in different service segments related to computer and technology such as software and information technology. Yet India is scoring over China in computer and information services. India has been so strong in areas of telecommunication, information services and computer but its comparative advantage in this field was 1.62 and dropped to 1.5 through 2016 in front of China which represents a threat to it in that industry. India made total of 162 $ billion in front of China that made 209 billion 4 IN 2016 AS China has strong position in areas connected to computer such as transportation and physical inputs as well as maintenance and repair services. This makes the comparative advantage of India is in need to grow more in the field of computer. (Pattanayak, 2018)     

India has a strong comparative advantage in pharmaceuticals export to the whole world as a result of its ability for producing brand name drugs that is of low-cost and that has an important position in the Indian economy. The pharmaceuticals industry in India has grown up at 7.2 % with a contribution to the Indian gross domestic market that is 1.3% in 2004 that increased in next years to grow after that and master world market. The country depends on pharmaceutical firms and Indian companies focus on price advantage to maintain low-cost production. The Food and Drug Administration has helped Indian firms to grow in the pharmaceuticals industry and market its products mainly in developing countries and to spread after that in many destinations. India now has developed its industry to export drug intermediates too and its export amount is about 10% of the world production and about 40-50% of the industry total turnover.  The country's exports in the field of pharmaceuticals have developed to exceed the country's exports in all other fields and industries with a growth rate that is supposed to continue growing. The growth rate shows that the country  has developed its comparative advantage in that field throughout a time period that recorded erratic growth although there were areas of stabilization. The country's exports in pharmaceuticals include many segments such as cardiac, gastrointestinal, respiratory and anti-infectives. (Singh et al, 2015)

India has succeeded in the sector of gold and jewelry with a growing market size that is supposed to reach 103.06 US$ in 2023. Its demand for gold in 2018 was 760.4 tons and in 2019 was 496.11 tons which contribute to the Indian economy greatly with about 7% of its GDP and 15% of its total exports. The country depends on the industry of gold manufacturing to employ about 4.64 million workers and in 2022, this rate is supposed to raise to reach 8.32 million workers. This growth depends on its comparative advantage and the government supports the industry with measures for investment promotion in gold industry in addition to adding technology to the industry to market products in international markets under very common and attractive brand names. Brand India depends on high skilled labor and unique styling in polished gold that is supported with diamonds too. Indian market size in the gold and jewelry field is a great one that contributes for 29% of the world gold consumption and is supposed to grow more in 2023. (Ibef, 2020)

India is one of the most important trading partners with Oman, it has a bilateral trade that estimated with 5 billion Dollars in 2018-19 as India was the second larger importer from Oman to oil crude and Oman is a country that hosts more than 780.000 citizen from India working in different fields to express the second largest country with expatriates in Oman. Oman and India have made a Maritime Transport Agreement that supports India to expand its trade in Oman and the Persian Gulf. This supported them in many industries including petroleum industry as India is exporting oil from Oman to manufacture and refine it. Oman has allowed India to use its ports such as Duqm port for having joint-ventures in many fields such as integrated tourism, software and gold industries. Oman has licensed the State Bank of India to support marketing the different products related to computer industry such as software and hardware. (Chaudhury, 2019) India-Oman bilateral remains strong in many fields and industries such as automotive and pharmaceuticals products as India has a high and strong priority in making bilateral trade with Oman to support the countries' economic relations and grow them, the bilateral trade between them witnessed a decline in 2014 to increase again in 2017 from US $ 3.8 billion to 4 $ billion. Products of exports of India to Oman include mineral oils, fuels, machinery, iron, steel items and chemicals and the main items of the imports of India from Oman include mineral oils, fertilizers, organic chemicals from earth and sea and plastering materials. (Indemb, 2020)  

In conclusion, India has comparative advantage in many different fields and industries and the country is having trade deals with Oman in products such as oil, automotive industry and computer. 

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