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Trade Barriers

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Identify in the specific barriers to the natural resources and/or products in India.

Please see attached products and notes on India.

India is a developing country which has many natural resources and products to offer the international trading market. The following factors provide India a distinct comparative advantage in terms of exporting polished gems and jewelry of all kinds, software, and petroleum from India:
Jewelry and Gems: India has a significant advantage in terms of exporting gems and jewelry. Ultimately, India is the largest consumer of Gold in the world and possesses the largest industry related to cutting and polishing of diamonds. The ability of the Indian craftsmen, couple with cost advantages and a very strong domestic market for gems and jewelry, makes India a top destination for production of gems and jewelry.
Software: India is the leader in information technology and software outsourcing industry thanks to its large pool of English speaking information technology graduates, low cost of operating R&D and software development centers, and excellent support and incentives from the government (KPMG International, 2006). Sequentially, companies from all over the world come to India to source their software development requirements. India not only possesses cost related advantage, but also provides access to high quality engineers and skilled professionals in the software arena. Because of these factors, India stands tall in the software exports industry. Gradually, India is facing stiff competition from countries like China but its high quality software development capability and large pool of English speaking software professionals make it an ideal destination compared to other countries (KPMG International, 2006).
Petroleum: India is strongly emerging as a leader in petroleum refining industry in the world. In the years to come, large Indian Conglomerate in the petroleum sector are setting-up huge refining plants whose combine capacity will make India the largest refining hub in the world (KPMG International, 2006). The Government's policy for allowing full private participation in upstream exploration and production has already attracted a number of private investors. Six rounds of competitive bidding under the Government policy, named New Exploration Licensing Policy (NELP), have already been done, around 185 blocks were awarded and reserves estimated at 700 MMT2 of oil and gas have been discovered (KPMG International, 2006). India's key advantages for developing itself as an export refining hub includes cost competitiveness and location advantage. Ultimately, India has significant lower cash operating costs because of cheaper power and labor costs. The capital costs are also lower by as much as 25 to 50 % over other Asian counterparts (KPMG International, 2006).
The Gems and Jewelry Industry is one of the fastest growing industries in the world. The growth in purchasing parity of the middle class and surging income levels have resulted in consumption growth of gems and jewelry by about 11 percent in the five-year period preceding 2006-07. It also contributes over 15 percent of India's total exports and provides employment to 1.3 million people directly and indirectly. The two major segments of the sector in India are gold jewelry and diamonds. Gold jewelry forms around 80 percent of the Indian market, with the balance comprising fabricated studded jewelry that includes diamonds as well as gemstone studded jewelry (India Brands, 2007, p. 1).


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The response address the queries posted in 643 words with references.

//Before writing about the 'Trade Barriers' and specific products in India, we will write about the market potential and environment of the Country. On the basis of the analysis of different products and natural resources, the trade prospects in the Indian market will be evaluated. It will assist in understanding the business environment of India. //

Trade Barriers

As a developing country, India has a potential to offer many natural resources and products to the international market of trade. Iron ore, bauxite, and copper ore are some of the chief natural resources of India (Murthy, 1999). India is one of the major producers of iron in the world. Iron ore is found all over India, but the major contributor states are Bihar and Orissa (Murthy, 1999). Coal is the chief producer of energy in India. It is believed that India has around 120 billion tons of coal in reserve that is going to last for approximately 120 years. At the coast of Maharashtra and Gujarat, massive reserves of petroleum have been found (Murthy, 1999).

An important position has been occupied by the gems and jewellery industry in the economy of India. By ...

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The response address the queries posted in 643 words with references.