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Current Issues Economic

In: Business and Management

Submitted By JaanamD
Words 299
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Current Issues Assignment- Economic/Financial

India and China announce trade deals during Xi’s visit to Delhi

The article demonstrates China’s interest in investing $20 billion in India and providing its companies with greater access to key Chinese markets (Burke 2014).

The agreement formed between the two nations is an international trade agreement, which involves the cooperation of both China and India towards reducing trade barriers (Fletcher and Crawford 2011, 60). China has proposed to provide India with financial foreign aid, in the form of $20 billion over the course of five years to develop and modify industrial parks and railways, with the intention of further developing Asia as a prosperous continent (Burke 2014).

In return, two of India’s largest banks have agreed to extend their line of credit by $1 – 1.8 billion for projects including those importing Chinese products. Axis Bank, a private lender in India signed an agreement with China Developmental Bank to help Chinese companies in India (Burke 2014). This shows how the agreement between both countries results in the decrease of trade barriers, which are restraints on the flow of international goods or services (Fletcher and Crawford 2011, 62).

Although this preferential trading agreement between the two most populous countries in the world is intended to provide both nations with prosperity, it is essential to consider the factors of the trading environment. Trading environment factors are regulated through governments (Fletcher and Crawford 2011, 45) outlining what firms can and cannot do in foreign markets.

References

Burke, Jason. 2014. “India and China Announce Trade deals during Xi visit to Delhi.” The Guardian, http://www.theguardian.com/world/2014/sep/18/india-china-trade-deals-xi-delhi

Fletcher, Richard and Heather Brown. 2011. International Marketing: An Asia-...

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