India is world’s one of the most-populous democracy which is growing, even during the time of global recession. The year 2007 saw an increase of 9.1 % in the GDP which made it world’s number two in the economic growth. Supported by the strength of fourth largest armed forces, India is considered as a strong regional power and a potential superpower by many countries in the world.
This improved economic stability has given India an edge over international issues and global affairs, as compared to the scenarios a decade back. India also has a long history of collaboration with the numerous international organizations most notably the Common Wealth, G 20, Asian Development Bank and the United Nation. It holds a strategic position in other organizations such as IBSA Dialogue Forum, East Asia Summit, IMF, World Trade Organization and G8+5. Some of the major regional organizations it is a part of include BIMSTEC and SAARC.
Until the economic liberation of 1991, India’s global relations were guided by policies of other countries. India intentionally chose to isolate itself from the international markets to protect its interests and achieve overall self reliance. Import tariffs dominated foreign trade policies, export duties and quantitative restrictions, while direct foreign investment was controlled by upper-limit equity contribution, limited technology transfer, government approvals and export obligations. Nearly 70% of the FDI sector took 7-8 years on an average to get necessary approvals.
These tedious restrictions ensured that annual FDI averaged only around $180M during 1980s. The scenario has changed now and a large percentage of the capital flow consists of commercial investment. Since linearization, the international trade of India has seen a double fold growth and has risen to 64,000,000 crores in 2004-05.
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