International Trade and Organizations

Challenges of globalization

Introduction

  1. Globalization refers to the integration of economies, cultures, and societies through international trade, investment, technology, and migration.
  2. While globalization offers many opportunities, it also poses significant challenges to nations and individuals.

Economic Challenges

  1. Economic Inequality: Globalization has widened the gap between developed and developing nations and within societies.
  2. Unemployment: Automation and offshoring due to globalization have

FDI and FPI: Trends and policies

Introduction

  1. Foreign Direct Investment (FDI) refers to investments made by a company or individual in one country in business interests in another country, involving control or ownership.
  2. Foreign Portfolio Investment (FPI) involves investing in financial assets such as stocks and bonds in a foreign country without direct control or management of the company.

Importance of FDI and FPI

  1. FDI promotes long-term economic growth through capital formation, technology transfer, and infrastructure develop

Impact on Indian economy

Introduction

  1. Globalization refers to the integration of economies, societies, and cultures through trade, investment, technology, and information.
  2. India's economic liberalization in 1991 accelerated its participation in the global economy.

Positive Impacts of Globalization on India

  1. Boosted economic growth by attracting foreign investments and increasing trade.
  2. Encouraged the inflow of Foreign Direct Investment (FDI), which enhanced infrastructure and created jobs.

WTO, IMF, World Bank, and their roles

Introduction

  1. The World Trade Organization (WTO), International Monetary Fund (IMF), and World Bank are key international organizations in global economic governance.
  2. They play distinct but complementary roles in facilitating international trade, economic stability, and development.

World Trade Organization (WTO)

  1. The WTO was established in 1995, succeeding the General Agreement on Tariffs and Trade (GATT).
  2. It aims to promote free

Exchange rates: Fixed, floating, and managed

Introduction

  1. Exchange rate is the value of one country's currency in relation to another country's currency.
  2. It plays a vital role in international trade, influencing exports, imports, and foreign investments.
  3. There are three main types of exchange rate systems: Fixed, Floating, and Managed.

Fixed Exchange Rate

  1. In a fixed exchange rate system, the currency value is pegged to a specific value of another currency or a basket of currencies.
  2. The cent

Balance of trade vs. balance of payments

Introduction

  1. The Balance of Trade (BOT) and the Balance of Payments (BOP) are key indicators of a country's economic health.
  2. Both are used to analyze a nation's international trade performance and its overall financial position.
  3. The BOT focuses specifically on the trade of goods, while the BOP provides a comprehensive view, including services, capital, and transfers.

Balance of Trade (BOT)

  1. The BOT represents the difference between a country's exports and
International Trade and Organizations