India has emerged into an up and coming economic power, and its history of trade is unlike that of most world powers.
When looking at trade in India, one has to consider the country’s transformation from a colonial outpost to a globalized trading powerhouse. It retains the institutions of British colonial rule, having established legal, political and business systems that have made it an attractive investment to foreign businesses, particularly from the west; however, in 1991, India transformed itself economically. The government of India liberalized its economic policies by reducing tariffs, interest rates, and ending public monopolies - allowing automatic approval of foreign direct investment.
India is an evolving powerhouse but still has internal issues that it needs to fix for it to become a true leader in the global economy. As India has become a stronger global player, it has experienced massive swings in its current account balance. There are a number of explanations for India’s current account swings, ranging from economic policy misalignments, to differentials in productivity growth.
As for India’s business environment, it is a trading dynamo. The country has a large, entrepreneurial work force and is making policy changes that will position it to become even more of a global player. Currently, the country is developing infrastructure and technology to match that of its competitors, such as China.
Although India has high potential, it could fall into the trap of a lot of emerging economies as they strive for powerhouse status; they may not address important foundation issues of their economy and begin providing false data to shore up their emerging powerhouse profile. As the country grows, it needs to address issues that come with growth, and one concerned economist, Riley Charles, writes, “for India, the storm clouds began to gather in January 2015 when the country's statistics bureau changed the way it calculates the size of the economy. Overnight, the pace of growth went from mediocre to eye-popping”. India is determined to become an economic giant, but the government’s actions over the next decade will be crucial for the country to realize its full potential.