Foreign direct investment versus local Indian market

For any economy to grow it is essential to have competitiveness in the market. Whether with the international market or within the local market, competition makes the market more attractive to all investments. Simple logic behind this is in a healthy competitive environment everyone has the chance to showcase the extra which ultimately benefits the economy overall. 

Now when we talk of competition it is also necessary to know with whom are we competing. As mentioned above within the local market or with the outside market. For an instance, if an economy is purely export based meaning it has few imports from other countries, there market competitiveness declines as others wants their piece to make use of it for their economy. For import based countries, the competition within local market is negligible reason being they don't have enough resources to make use of it and sell it outside which devalues their currency.So the foremost requirement for any nation is to have healthy export as well as import based economy. Exports makes the local market strong and attractive whereas imports brings in more competition in the market.

When we talk of India, lot of things come into picture. For an economy where over a billion people make their living it certainly needs a lot of  resources to meet the demands for all. We have nearly 20% people who are below poverty line. The majority is the middle class, both upper and lower and around 10% make into the affluent society. So it is natural that demands will be different and vivid for different classes. This is the primary reason why India is seen as the biggest economic hub. The simple answer is -variety in demand. And this gives scope for many people both inside and from foreign countries to invest in India. Whether its retail shops, single brand showrooms or lavish auto mobile showrooms, everything sells in India. So the foreign investment has increased in India. Earlier FDI used to be limited to some auto mobile manufacturing units and single brand showrooms but now it has been pervasive. Now investors want to invest in food sector retail shops, mining sector, power sector and many more. This is indeed necessary as more foreign money enters any economy means it is a progressing economy. It increases the demand of local currency and lowers down inflation rates. 

Now let us analyse this sector wise. First lets talk of retail sector. India has allowed to invest in both single brand and multi brand products. Big single brand investors ,for example- Nike, have been successful to attract people from higher class, because of the cost and the quality. Now they are venturing into attracting all classes by producing different variety for all sections of people. This not only increase their competitiveness but also benefits all sections. But when we look into local brand investors, they do get a bad hit in major places. With the emergence of such brands in major cities of the country many local brands have perished due to lack of demand. Although in majority of the places local brands rule, but the major profit comes from cities. So this is an area of concern how to keep balance between foreign investors and local investors so that both benefit. Again multi brand retail shops like Walmart or Carrefour are making their way into the country which will certainly ensure quality in products and even in low cost which definitely will affect the local retail & grocery shops. So we can say FDI in retail ,especially in food sector will not be much beneficial as many will lose employment compared to few who get employed. So main benefit will go to certain section but will leave behind other sections.


The historic "Make in India Policy" which was introduced by the Modi government has though lot of promising outcomes for the Indian manufacturing sector. In this policy FDI is expected to be introduced in many sectors such as defence and railways. FDI in defence will mean big foreign invstors on weapons and artillery as well as aircraft carriers and fighter planes will sow seeds in India use Indian raw materials and human resources in all. This will enhance India's manufacturing in defence materials and will make India proefficient rather than importing all from outside. This will aslo help in employing many sevtions of the society without hampering any section. FDI in railways will be acheived through public private partnership which will help improvise the present standards and technology used for manufacturing various products such as high speed trains and efficient railway tracks. So in these cases FDI surely will be a boon for the economy.


So to conclude we can say that FDI does have its pros and cons but using the investments in proper way and less corruption involved will certainly help India to become economic superpower.

International trade and its effect on Indian economy

Since independence Indian economy has seen many ups and downs. With the end of British era and establishment of a new democratic republic India has been a nation which has been developing at a good pace  in various sectors of economy. Whether its agriculture, industries (both small scale and large scale), services and what not India has made its mark in the global arena. And today India is one of the largest developing economies of the world.
      Now when we talk of economy how can we forget international trade which adds a lot of revenue to our booming economy. If we compare the situation 30 years back with the contemporary era there has been striking differences in the way our economy ran. Earlier doing trade was not an easy task for either India or the rest as there used to lot of trade tariffs involved. The License Raj system allowed very limited things to be imported inside or exported outside. Very few licenses were selected for various foreign investors to invest or set up enterprise in the country. This system helped the economy initially with high growth rates and social expenditure awareness but by 1980s it proved to be a big loss with slow growth rates and image of being a restrictive state. Until 1990, when the Liberalization Privatization and Globalization (LPG) policy came to India it opened all new gates for international trade. In a new globalized scenario lots of foreign investments came in, many trade tariffs on import and export of goods were lifted and many of our cities like Mumbai , Chennai and Kolkata became important economic hubs. Privatization not only reduced the economic burden from the government but also allowed more collaborations and joint ventures with foreign companies which boosted the production of goods and services. Today many Indians have access to all modern equipment in their day to day life starting from clothes to gadgets to vehicles. India is also a military superpower and is on the verge of becoming economic superpower by 2030.
       But that is just one side of the coin. India is an agriculture based economy which has 52% workforce but accounts to only 18% of the GDP. With the more and more foreign investments the indigenous sectors have taken a setback. India exports many agricultural products like rice, wheat, vegetables and meat of which the lowest quality is left for the home market. Farmers are not benefiting from this as the price at which they sell their produce is often low compared to the rates at which it is sold in both home and foreign markets. Moreover the subsidies for farmers has also become limited which has limited the produce. This has led to inflation as demand is exceeding supply. This may not be big problem for the middle class but is a nasty hit  to the poor. The result poor is getting poorer and the rich who deal with export of the products are getting richer. With population growing at a fast pace it will be difficult for supplying food to all sections of the society. Unemployment in rural areas has become obvious with people less exposed to modern world and growing burden on the agricultural sector. Even if people are employed but the basic wages are often low to earn the basic amenities.
         Not only the agricultural sector but many small scale industries like cotton mills have also taken a setback because of growing demand for foreign products. In urban areas, foreign investments in various sectors such as in retail has reduced the demand of local markets to a large extent. The result slow downfall of indigenous industries and many people getting engaged in informal sectors which is in turn loss to the government as no tax is paid by these sectors.
      Hence we can say that until the balance between the two situations is not maintained it is not really a great success for the economy in which majority of the money stays in the hand of handful of people.

India's pride- The A50 Phalcon AWACS

India before independence was a nation where people had very narrow view about the happenings in the world around them. This was basically because there was no proper mode of communication as India was industrially and technologically backward, though there were certain developments done by the British. But since independence India has certainly placed itself well in the global arena out of nowhere.Wether its industrial or technological advancement, it is certainly worth seeing on India's point of view.And all these have taken place in an exponential rate especially in last 10 to 15 years which has made India the 2nd largest growing economy in  the world.

                                       India is a large country with long borders with its neighboring countries. And not only long but also conflicting borders. Its hostile neighbors have certainly made India to develop its military power well enough in order to tackle any aggression from them. And today India is one also one of the most powerful nations as far as military and nuclear might is concerned and also one of largest in military budget. And to add to it was the acquisition of the airborne radar systems AWACS from a deal with Israel in 2009 worth $ 1.1 billion which has certainly enhanced our air combat missions to a large extent.

                                     Airborne warning and control systems or AWACS is basically an airborne radar system which uses basic radar technology for its operation. Radar stands for radio detection and ranging which uses radio signals for communication used for detection of unknown objects in sky or sea. And these AWACS system are used for long range detection of objects flying at extreme heights of somewhat 30000 feet high within a radius of more than 500 kms having a scan area coverage of 0.3 million sq.km which is as large as the state of Rajasthan. This means that if these systems are placed in Delhi it can instantly detect a plane entering into India's air border 

from Pakistan or China. In brief this can be explained as the short radio pulses that are used in this technology which have high frequency and penetration power for which they are less attenuated in the medium they travel and also do not get reflected back by atmosphere layers unlike other EM waves for which they can track objects at a distant place and flying at extreme altitudes. Also because of use of short pulses the objects can be detected more accurately than other radar systems as they do not get deviated from there straight path like a continuous radio signal does. These systems not only can detect the enemy aircrafts but also can communicate well with the friendly aircrafts and give them added stealth by informing them about the obstacles in their path and at what altitudes they are flying as well as help them to land safely on the runway despite of extreme weather conditions like rainy, foggy or cloudy conditions.

                        This was all about the technology used in brief. Now coming to the A50 Phalcon AWACS which 

India now posses, well this has certainly revolutionized our air military to a great extent. India got its first system of this kind from deal with Israel in 2009 with two other units to be delivered in 2011 which is worth $ 1.1 billion.

This system is placed on the Russian Ilyushin 76 aircraft in Agra. This system has some unique features like it can simultaneously detect 250 flying objects within a radius of 800 kms and also has the 'look down capability'

to monitor movements in sea or ground basically by the use of global positioning systems or GPS and sateliite imaging systems and thus not only can help in air combats but also to the army and the navy by informing them about the positions and locations of enemy hideouts and bunkers.

                                       We being Indians are certainly proud that we posses these kind of ultra modern technology which is certainly a boom to our military might.

                                                                  

                                                                    Jai    Hind !!!!!

Pakistan - Our blood related hostile neighbor

 Before India was independent there were many mass uprisings against the British rule by people of all communities. Unity in diversity was the biggest strength the society then possessed and everybody had a single goal of overthrowing the British out of our country. Many political leaders and organisations took active part in making this dream come true and finally in 1947 India was independent of once viewed as a never ending imperialism of the British. But were we independent in real sense...............
                         Soon after India was independent it was divided into two nations on the basis of religion
following the British divide and rule policy. A separate nation of Pakistan was created. The reason for which our society was cherished certainly seemed to be on verge of subversion .And this partition was not the end of the crisis. Thousands of hindus and muslims were mercilessly killed, homes were burnt and lakhs injured following the communal riots that arose. This bloody game of so called partition was regarded as the blackest day in the Indian history. So Pakistan was created by pouring down the blood of thousands of innocent people. And till now 63 years after partition its horror is not over and virtually will never be over.
             Pakistan is basically a Muslim country formed after British India was partitioned into two the other being divided India with majority of Hindus. And since partition Pakistan has been our bloody enemy and at least 4 major wars have been fought between both. There has been basically sour relations between both even though certain measures had been taken to improvise on the relations. The major issue being Kashmir issue,an issue yet to be solved. Kashmir, during the British rule had been a princely state and after partition when other princely states were joining to either India or Pakistan, the then king of Kashmir, Hari singh, decided not to join any of the countries and remain independent. But Kashmir being a Muslim majority state was subjected to invasions by Pakistani forces. The king became helpless and asked for Indian help. India agreed to help on the condition that the state was acceded to India in return. The king signed the instrument of accession and made Kashmir a part of India. Indian army immediately took to action and stopped further Pakistani invasion.
The matter was then taken to the UN and a cease fire was declared. India claimed Kashmir to be its integral part and declared the accession as final ,on the other hand Pakistan did not accept the accession and termed it to be illegal and forcibly done by India and thus demanded a vote of Kashmiri people to the UN which is yet to be done.Since then Kashmir has remained a bone  of contention between both. In 1972 Simla agreement a line of control was demarcated in  Kashmir to relive tensions but it still continues. And since Siachen war in 1984 the relations were worsened and Pakistan had made several attempts to cause disturbances on the Indian side of Kashmir. It has created terror outfits and trained the terrorists in its soil. Lots of people have been killed so far in the Kashmir valley and it seems unending.
        The 1971 war was another instance which separated east Pakistan from Pakistan and Bangladesh was created as a result. India played the major role in the creation of  Bangladesh for which Pakistan reacted strongly making the relations worse. Lots of people in east Pakistan were killed and several homeless who took refuge in India. The 1999 Kargil war was also because of the attempts made by Pakistan to invade Kashmir valley and it continues till now.
                   This was about the Kashmir issue. There are also other issues which are indeed a threat to our national integrity. There are strong evidences of all the terror outfits in the Pakistani Kashmir to have direct links with Pakistani army and Pakistan's intelligence ISI. It is a fact that Pakistani army trains these terrorists
and funds them with money and modern weapons. ISI has been suspected to carry out the Mumbai train blasts and 26/11 attacks on Taj hotel and several other places. On the other hand Pakistan also suspects Indian external intelligence agency RAW to carry out several serial blasts in Pakistan by funding the Taliban  and to have spread bad air in Baluchistan against Pakistan govt.
                               Other issues have also been there which are also equally disturbing. The drug tunnels discovered by the Indian sources on the India Pakistan border has been a major cause of concern. The illegal
drugs as well as arms smuggling has direct links to Pakistan and Mumbai underworld plays a major role in it.
It is also suspected that maoists in India are supplied with arms through this.
                               With so many issues there, several attempts have been made to build a peaceful atmosphere between both countries. There has been bilateral meetings of premiers of both the countries to solve problems and bring peace. The starting of Samjhauta express between Lahore and Amritsar and bus service between Srinagar and Muzzafrabad for instance have been quiet encouraging. Also during the 2004 earthquakes in Pakistani Kashmir Indian army came forward with a helping hand to Pakistan which was welcomed by both the countries. So these have been some instances which have made relations improve to certain extent but the main issues still remain unsolved.
                              Created of same blood, actually India and pakistan are blood brothers but have become
blood pouring enemies of each other. Well we are certainly waiting for the day when we can really say
                                           "Hindustan  Pakistan  bhai bhai"
May love overcome hatred and both remain in peace for ever. Both India and Pakistan will then rock.

Indian economy - a brief report

Since independence there has been lot of changes and reformations that have enhanced the image of our country in the global arena.We have, out of nowhere, come to a position which is worth seeing. Whether its technological advancement or industrial boom it has been a long and tough journey over these years which have boosted up our economy and have given India an international platform for becoming a developed nation from the current developing one. And today India enjoys the tag of being one of  largest and fastest growing economies of the world.
            Indian economy, basically an agro based economy, has its roots dated back to ancient times thousands of years before during the Indus valley civilization when people basically practiced agriculture, made sharp tools and domesticated animals for trade.The basic exports included silk, steel, handicrafts and textiles and agricultural products basiclly during the Mauryan Empire . In early medieval period during 1000 AD India was the world's largest economy with its gross domestic product or GDP 33% of the world GDP. During the Mughal period also India was one of the largest economies of the world. But industrially, India boomed during the British raj which saw development of large industries, railways, telegraph etc. This was indeed a revolution which had a lot benefits with more employment but also caused lot of famines due to deforestation. Basic export was that of food grains and the traditional money exchange and taxation systems included barter and zaminndari systems, but poverty then also remained a major hindrance in the path of economic development.
                                After independence there were lots of economic reforms made which helped in a lot of ways in boosting the economy. Basically from 1947 to late 1980's our economy was characterized by license raj systems with lot of trade tariffs, public ownership and slow growth. But with the economic reforms in 1991 India saw an emerging economy. With the liberalization globalization and privatization or LPG policy it enhanced foreign trade reducing trade tariffs. There were lot of foreign investments which enhanced our financial growth and today India is the 11th largest  and 2nd fastest growing economy  of the world with a net GDP of  $1.3 trillion and growth rate of  8-9% on an average in the fiscal year.There were lot capital flow from foreign direct investments and exports as well as there were lot of imports from other countries. The major export partners are US, China and UAE whereas major import partners are China, US, Saudi Arabia and Germany.
               Now lets briefly look into the different sectors of  our economy which are the backbone of any nation's growth.
1) Agricultural sector or the primary sector                              
With a rural area of 70%, agriculture still remains the major occupation accounting to more than 50% employment followed by service sectors like banking and industrial sector. But services account to 55% of India's GDP followed by industries and agriculture. But India has the largest farm yield of the world and  is self sufficient in rice grains and also exports outside.India is also one of the largest producers and exporters of wheat, cotton, silk and tobacco. This has been possible by various schemes providing subsidies to the farmers for use of better technology, fertilizers for better yield by the government since the Green revolution. But till now farmer suicide remains a major problem due to natural disasters like famine and floods and also due to non repayment of debt for which govt has many a times exempted the debt of the farmers taken from the govt.

2) Industrial sector or the secondary sector
Industrial sector accounts to 14% of employment and 28% of GDP. The major industries are telecomm., software,chemicals, pharmaceuticals and also automobiles. India is the 4th largest auto exporter in Asia and
the largest IT services exporter as far as outsourcing is concerned. But still small scale industries like textiles employs 1/3rd of total industrial force rest being medium scale and large scale. India is also rich in natural resources  like iron ore, bauxite ore , manganese, coal and thorium reserves which is also enhancing growth of industries and better employment opportunities.Nuclear power plants, for eg:-are also being set up following the nuclear deal and with large thorium reserves in the country. Many projects have been set up and proposed including foreign projects which has boosted up the foreign direct investments.Foreign automobile companies have set up there plants in India and also several telecom and steel industries which has enhanced our economy in a large way. Petroleum refineries have also been set up by many oil exploring companies but the net output is not sufficient for the rising crude oil demand for which it is imported from other countries like Saudi Arabia.

3) Service sector or tertiary sector
This accounts to 34% of employment and 55% of the GDP. These basically includes banking sectors, IT services, finance sectors, hotel services etc which aim in providing service to consumers. India has largest human resources and cheap labor which has also made India stand in global platform by methods of outsourcing.

                   With no of exports listed above there are also lot things imported into the country starting from crude oil to automobiles. India being a developing nation is one of the largest consumer of  crude oil and is thus imported. Lots of machineries are also imported for industries to run. Automobiles like cars are also imported for luxury purpose making India one of the largest importers of the world. The exchange rates and foreign investments and the economic policies by the govt have certainly made India an ideal place for a risk free investment which indeed is encouraging more and more investments both internal and foreign.
                        
But still poverty, illiteracy and unemployment remain major problems on path of economic development. And financial issues like inflation, fiscal deficit, internal public debt through various bonds and
external debt have made things worse. The money in our country is very non uniformly distributed with one
being a billionaire and the other below poverty line with an income of less than $1 a day not able too fulfill there basic needs of life. These problems make the basically the lower class and the middle class to suffer which is the majority of population. About 20% of the population lives below poverty line creating a lot of contrasts and economic gap in the society. So even though we are one of the largest economies of the world we will really be large when everybody will have food to eat, a shelter to live and clothes to wear. then only we can dream of a prosperous India.

Pseudo secularism - can we be secular in India?

India is a nation with over a billion people having all sort of diversities starting from religion,caste,languages spoken and culture to background,status and getups. It is perhaps, as said by one, the land with most vivid culture and people.This is certainly a factor which makes our country great because despite of so many differences we are a single geographical entity. But!!! but what........ i mean are we really a single geographical entity in our minds. Well the answer is still a mystery truly a mystery we don't know in real sense.
                                     India is sovereign, socialist,secular, republic and a democratic country which does not see difference in any religion.Every religion is given equal importance and freedom and thus is a secular country.But in real sense a secular country is one which does not see difference in any religion and also does not give importance to every religion. You need to give importance to critical things only, not to the welfare of individual religions or minorities. A secular state is basically a welfare state for every people and you dont need to show it for minorities separately which is done in India. And the big question here is, what does minority group mean as if India is a secular state then there is no difference in religion so there should be no one minority here but it still prevails in our society. And we are the 2nd largest Muslim population in the world. And the facilities for so called minorities if are a problem for the so called majorities that are the hindus then these are of no use. The minority reservation for an instance is creating 100% difference among the people which is not a sign of a secular country. So this is a big contradiction made of India being a secular country.
                                            Being secular means to be secular in minds not only on the political base. Meritocracy
is perhaps what should be the aim of a secular society with all people enjoying equal freedom. This means that always merit of a person should be given importance not that he is a minority. But is it done. Well the answer is no to a large extent.We have right to freedom of religion and speech in our country but it is practiced to what extent. There are some religious fundamentalists who compel people of other religions to change their religion otherwise are either threatened or murdered. There are many instances of this which leads to several riots and mass killings. This leads to many people claiming themselves that one can never be secular in India.
There are long speeches given by many religious fundamentalist groups who want every reason to blame other religion it might be related to their practices or culture. So isn't this secularism only on papers but certainly not in minds which is certainly a form of pseudo secularism. And its not that only religious groups are responsible for this. These groups certainly have directly or indirectly support of some of our self interested  politicians and parties wanting to fulfill their vested goals which leads to lots of conflict among our fellow countrymen.
                                              These sort of incidents not only destroy the image of a secular society but also
leads to poor governance and democracy and for sure loss of human ethics. The inhumanity caused in the name of religion is perhaps the biggest threat to a well valued society where peace can never prevail. A true
secular society is one where humanity is religion and work is worship. So this should what be our motto and
we are the only ones who can help in making humanity our biggest strength because after all we are humans and should posses qualities like humans not animals.

Hawala trade

In today's world illegal activities have become quiet common and has found its roots from traditional methods of illegal trade. Starting from illegal gold and other costly items smuggling in 1970s to drugs smuggling in early1990s continuing till now to illegal money and fund transfer all have been a major sources of income of many. These are things that have not only become the mainstay of many but have become the money source of different terrorist and insurgent organisations in the middle.Illegal money transfer through hawala has today become a major source of terrorist fundings who have claimed lives of many innocent.
           The history of hawala dates back to ages.It has its origins in Islamic law and is also mentioned in many Islamic texts.Basically this system acts as a bridge between money suppliers known as hawaladars and the customers for money transaction from one place to other. In short we can say that this is parallel to a banking system to some extent.In fact this system functions totally like a bank in some countries which are backward and have no banking facilities like Afghanistan.It is also helpful for people who want money transaction to remote areas. So it is therefore a legal system in many countries including USA but it was made illegal after the Sep. 11 attacks. So in broad sense it is certainly a type of banking system which is accepted but using this
many illegal activities are also undertaken.
                          The major and the most critical of all is the money supply to different terrorist organisations.
And in India its root starts from the Mumbai underworld. The Mumbai underworld is one of the most active
mafia groups in the world which have claimed lives of many innocent people not only in Mumbai but also outside the city. Basically they charge high profile personalities with a huge amount of ransom or they say it 'protection money' for the protection of their lives otherwise threaten them to kill and use this money for funding the terrorists. The ones who are not willing to pay the ransom are either threatened or killed. The underworld has a very wide chain of people troughout the world basically in the Gulf countries and countries in Africa by which they carry on their so called ' Dhanda'. Not only that the crores of money involved in scams like match fixing is also a major source of terrorist funding and all this is done through hawala. In countries where hawala is legal their govt. itself funds the hawladars with sufficient money. There have been scams like the hawala scam for an instance in India in which some high profile politicians were involved only to satisfy their vested goals. Also the huge amount of money collected from international smuggling especially drugs is also the source of terrorist funding through hawala itself. And the most recent method of fund collection are the cyber crimes such as hacking into security and other sites of a nation which also involve lots of money are also linked to this trade. So hawala now has become the easiest way of money funding for illegal activities.
                                                     Hawala is a preferred system not only because it can be used for money transaction in remote areas but also becuase of low commission charged as compared to banks. Not only that this an informal value transfer which has links with the foreign exchange rates of many countries. It involves money transaction from one country to other seeing the market value of their respective currencies with respect to basically US dollars through max. trading in the world is done. This certainly needs a lot of skill
and concrete evidence of market position. Basically this is done by the hawaladars in one city  who transfer money to the recipient in another or same city.
                                 So it is certainly a fact that whatever man has created is certainly for benefit of each other but there are certain anti social in fact anti human elements who are always responsible for demolition
of  humanity and therefore mankind. It can all change if we being humans can want it to change.