Globalization is the process of integrating the individuals across the world on a unified platform for the purpose of growing and evolving the business practices using advanced technologies. This not only reduces the geographical distances amongst the trading entities but also brings them closer to each other transforming the world into a single State.
India- the international business house
The Government has paved the way for entrepreneurial development of the country in order to elevate India's status on the international scale of trading. Contributions made in the form of incentivizing business policies have facilitated the World Bank's Ease of Doing Business global rankings for the country. Aiming at increasing the domestic production levels benefiting the Indian economy, offering employment opportunities to the working cadre and liberalization of the investment policies, the Government has been devising schemes for benefiting the corporates to expand their businesses in the country.
The exporting side
While the Government has made enormous efforts to promote commercial activities in the nation, focus has been to encourage trade overseas. Being a significant producer of various products, India exports a number of goods such as jute, tea, cotton, spices, engineering goods, refined petroleum, gems, jewellery, chemicals, agricultural products, textiles, etc.
In order to improve and boost the exports performance of India, the Government introduced the Foreign Trade Policy (2015-2020). It also aims to help diversification of India's export by aiding various sectors of the economy to gain global competitiveness to foster exports.
Exporting to U.S.
India has been into the business of export of various commodities to the United States of America such as certain musical instruments, leather, textiles, handloom, dairy, chemicals, agricultural produce including processed fruits and vegetables. Strengthening its commercial ties with developing countries, the Government of the United States of America accorded exemptions in respect of duty and taxes over the products imported therefrom under of the Generalized System of Preferences to promote their economic development. As per the provisions of the said scheme, India was able to avail benefit of USD 5.6 Billion in terms of duty concession, thus being the largest beneficiary thereunder.
U.S. revokes tax exemption
In its recent move, the Government of the United States of America, withdrew its preferential treatment of allowing duty-free access to the imports from the developing countries effective from November 1, 2018.1
This action of the Government of the United States of America has been clarified as not being aimed at any particular country. The sudden change of events brought forth is expected to seriously affect the export business of India as the largest beneficiary as stated in Generalized System of Preferences. However, these products may continue to be imported subject to the regular Most-favoured nation duty rates.
The changes in the international policies in respect on the applicable levies and duties brings significant impact in the business activities conducted by the commercial entities of a nation thus affecting its economic prosperity. The aforesaid modifications by the Government of the United States of America may result in restricted trading with the country.
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