An Analysis of India's Foreign Trade and Gross Domestic Product

Abstract

Before the onset of liberalisation, India was deliberately and significantly kept out of the international market to protect its economy and attain economic independence. Foreign direct investment was constrained by a ceiling on equity involvement, a ban on technology transfers, export requirements, and government permits, while international trade was subject to import tariffs, export levies, and quantitative restrictions. India's international trade has grown significantly since liberalization, with a rise in the GDP growth from 6.38% in 2012-2013 to 11.23% in 2021–22. As of now, the United States, the United Arab Emirates, China, Hong Kong and Saudi Arabia are India's top commercial partners. Following economic liberalization, India saw an average annual GDP growth of 6-7%. India is now considered one of the world's largest economies with the quickest growth rate.