Union commerce ministry (government of India), announces integrated foreign trade policy every five years also called EXIM policy.
Balance of trade (BOT) –
It is the most important element of the balance of payments.
Balanced BOT i.e. exports = imports.
Adverse BOT i.e. exports < imports.
Favorable BOT i.e. exports > imports.
Balance of payment (BOP) –
It is the record of all the economical transactions between the residents of a country and the rest of the world in the particular period.
These transactions are made by individuals, firms and the government bodies.
The current account might include –
Trade – buying and selling of goods and services.
Exports – a credit entry.
Imports – a debit entry.
Trade balance – sum of exports and imports.
Factor income – repayments and dividends from loans and investments.
Factor earnings – a credit entry.
Factor payments – a debit entry.
Factor income balance – the sum of earnings and payments.
Foreign direct investment (FDI) –
It is an investment in a foreign country through the acquisition of a local company or the establishment of an operation on a new Greenfield site.
Direct investment implies control and managerial and perhaps technical input.
Since 1st April 2010, in India FDI has been regulated by the consolidated FDI policy issued by the “Department of industrial policy and promotion” (DIPP).
Brownfield investment is when a company or government entity purchases or leases existing production facilities to launch a new production activity.
International organizations are the cooperation forums of the sovereign states. These are further classified into –
Economic organizations.
And political organizations.
Economic organizations –
International labour organization (ILO) –
Emerged from the treaty of Versailles in 1919.
Established on 11th April 1919.
Got associated with UNO on 14th December 1946.
Member countries – 185.
Headquarter is in Geneva.
Founded to give expressions to the growing concern for social reform after world war 1st and the conviction that any reform had to be conducted at an international level.
ILO has generated such hallmarks of industrial society such as.
The eight hour working day.
Maternity protection.
Child labour laws.
And a range of policies which promotes workforce safety and peaceful industrial relations.
Received Nobel peace prize in 1969.
Bank for international settlement (BIS) –
Headquarter is in Basel (Switzerland central banks).
It has 58 central banks members.
Established in 17th May 1930 in Rome.
Founding states were – Germany, Belgium, France, great Britain, northern Ireland, Italy, Japan, and Switzerland.
It has two regional offices.
The representative office for Asia and the pacific, Hong Kong.
The representative office for the Americas, Mexico City.
Main objective is to serve central banks in their pursuit of monetary and financial stability, to foster international cooperation in those areas and to act as a bank for central banks.
Bretton woods conference.
Officially known as the United Nations monetary and finance commission.
Was the gathering of the delegates from 44 nations from 1st to 22nd July, 1944 at Bretton woods, New Hampshire (USA).
To agree upon a series of new rules for the post (World War 2) International monetary system.
The two major accomplishments were the creation of the International monetary fund (IMF) and the International bank of reconstruction and development (IBRD) also known as the World Bank.
IBRD / World bank –
Since its inception in 1944, it has expanded to closely associated group of five development institutions.
Their mission evolved as the facilitator of post war reconstruction and development to the present day mandate of worldwide poverty alleviation, in close coordination with the international development association and other members of the World Bank group.
At today’s World Bank poverty reduction through an inclusive and sustainable globalization remains their overarching goal of their work.
IMF –
Came into formal existence in December 1945, when its first 29 member countries signed its article of agreement.
Begins its operations from 1st March 1947.
At present 188 nations are the members of IMF.
Its primary purpose is to ensure the stability of the International monetary system (the system of exchange rates and international payments) that enables countries and their citizens to transact with one another.