India's economic development & Foreign Policy
Foreign policy and economic development in India
India is currently the third largest economy of the globe, surpassed only by the United States and China (and the European Union, yet this is not an individual country). India has traditionally been a rather enclosed economy, with its economic operations focused mostly at the domestic level and limited interactions within the international market place.
Throughout the past two decades however, more emphasis has been placed on opening the country and liberalizing its economy. Some reforms that were implemented in this stance include the deregulation of industries, the privatization of state owned enterprises or the reduction of controls of international trade. These measures were implemented starting in the early 1990s decade and they have proved highly beneficial in the country's economic growth. Since 1997, India has averaged 7 per cent growth rate in its gross domestic product.
The process of market liberalization -- as part of the wider international policy of India -- has as such proven beneficial to the economic growth of the country. Nevertheless, at this stage, a question is being posed relative to the possibility of the economic growth in itself to have influenced the development and implementation of India's foreign policy.
In order to answer this question, a liberal theoretical framework for foreign policy would be employed, namely the liberal theory of international relations. Emphasis would also be placed on the economic stance of India, as well as the characteristics of its foreign policy throughout the past recent period (10-15 years).
2. The liberal theory of international relations
The liberal theory of international relations is a non-utopian model of analyzing the international relations of a country. It has initially originated from the analysis of the role of the social stance and the domestic laws, which influence the international relationships and decisions of a country.
The model has two distinctive advantages. On the one hand, it is realistic and considers reasonable and rational facts in its analysis. This means that the results it retrieves are pertinent and relevant in the context in which the assessment is conducted, not the context of an unattainable perfect market place. Then, the second benefit is represented by the fact that the liberal theory of international relations is a flexible theoretical framework. This virtually means that it allows the construction of several hypotheses of the impact on foreign policy, such as the role of democracy, nationalism, social inequality, international trade and commerce, international institutions, politics and so on (Moravcsik).
At this specific level, the implementation of the liberal theory of international relations framework for the current study commences at the creation of the following hypotheses, which will be assessed further on:
Hypothesis 1: The Indian foreign policy has not suffered notable modifications throughout the past years.
Hypothesis 2: Changes have occurred in the foreign policy of India and these have been generated by the development of economy.
Hypothesis 3: Changes have occurred in the international relations of India but these have been generated by elements other than the economic growth of the country.
2. The Indian economy
The Indian economy derives most of its growth through the services sector, yet the agricultural field continues to employ the largest share of the population (56 per cent). The economic activities in the country include village farming and modern agriculture, as well as handicrafts, modern industries and various services; the Indian economy is as such rather diversified.
The Indian population is well educated and most of the people speak English; the country has capitalized on this language and educational abilities and has commenced to sell IT services. Today, India is one of the largest exporters of IT services and these constitute the largest share of Indian exports in the segment of electronics products and services (Esc India).
The Indian economy has been registering steady growth throughout the past recent decades and this trend has also been revealed at the level of the living standards of the population. While 29 per cent of the population continues to live below the poverty line, the majority of the Indians have witnessed improvements in their living standards and purchase powers. This feature has helped the country overcome the internationalized economic crisis through an increase in domestic demand and consumption.
The future of India is positive due to the high level of education among the population and the large portion of the young population, as well as healthy savings and investment rates. Reforms since 2011 have nevertheless weakened due to numerous corruption scandals. Among the more notable challenges for India's future there are the "widespread poverty, inadequate...
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