BUS Unit 4 DB SA FWP - Essay Example

INDIA AND SAUDI ARABIA Assessment one The analysis about India is accurate because of the following facts: India had not opened up to the world till the year 1980 since the rate of growth developed in the 1980s. The economy grew at a yearly rate of 5.5 percent, and 3.3 percent on a per capita basis (Mukherji, 2011). Industry developed at a yearly rate of 6.6 percent as well as agriculture at a rate of 3.6 percent. It was a closed economy and the foremost objective was to guard its market from foreign antagonism (Krueger, 2002).

The aim of its policies was to ensure the countrys independent policy and maintain regional peace as well as stability through the projection of Indian power. India was the founding member of the GATT i.e. the world trade organization in 1947 as well as WTO i.e. World Trade Organization in 1995 and the main objective was to decrease the barriers of international trade through the decrease of tariffs, quotas plus subsidies (Krueger, 2002). The drift in Indian economic trade policy is a response to the spaghetti bowl effect which is often cited as a problematic of free trade agreements.

It refers to the development of overlapping bilateral as well as regional trade agreements (Mukherji, 2011).Nevertheless the average tariffs overdid 200 percent, quantifiable restrictions on imports were widespread, as well as there were stringent restrictions on foreign investment (Mukherji, 2011). India is pushing for extra liberal global trade since protective tariff and of free trade is the foundation of classical economics, it has anticipated a leadership role amongst developing nations (Krueger, 2002).

The only thing that is amazing is, India has a developed economy but it has high rate of poverty and in accessibility to basic needs like health care (Krueger, 2002).Assessment TwoThe following analysis about Saudi Arabia is accurate since: An analysis of trade restrictions in Saudi Arabia displays that various restrictions besides challenges regarding regulatory and bureaucratic management in this country occurs up to now (House K, 2013). It is true that Saudi Arabia is a member of the Gulf Cooperation Council and the Greater Arab Free Trade Area GAFTA, it is an executive program to stimulate the Trade Facilitation as well as Development Agreement (House K, 2013).

Import tariffs are only useful for products from third countries. Saudi Arabia also restricts or prohibits importation of certain products and needs licenses for products too. Prohibited items are for example firearms as well as alcohol (House K, 2013).Some examples for products that need licenses from Saudi Arabian authorities are medical devices and religious material that does not relate to Islam (House K, 2013). The procedure for applying for a license can be long-lasting and poses a test for applying in companies.

Restrictions that apply to the exercise of certain professions are important in Saudi Arabia. Practicing law, medicine, and financial services is not permissible for everybody (House, 2013). Saudi Arabia enforces superior limits for insurance companies and banks. In both cases the percentage of foreign equity is inadequate. Direct foreign contribution in the stock market is also forbidden (House K, 2013). Foreign investments into Saudi Arabia necessitate a distinctive license. Hence companies seeking to capitalize in Saudi Arabia must apply for this license as well as need to renew it on a regular basis.

It is so amazing that Saudi Arabia restricts most of international operations and business that would contribute to it development. ReferencesHouse, K. E. (2013). On Saudi Arabia. New York: Random House Incorporated.Krueger, A. O. (2002). Economic Policy Reforms and the Indian Economy. New Yrok: University of Chicago Press.Mukherji, R. (2011). India Since 1980. New York: Cambridge University Press.