During the mid-1980s, when a phenomenal growth was witnessed in private capital flows to developing economies, India was not among the favored destinations of private foreign investors. With the reforms of 1991, continuous efforts were made towards integrating India with the world economy and attracting private capital.

With the liberalization of the Indian economy (i.e., from July 24, 1991 to be precise) India's external trade sector recorded a continuous improvement. The major contributors have been the manufacturing, and the gem and jewelry sectors. As a result, India's performance in forex reserves has been satisfactory and sustainable.

Among the emerging economies, while India is a trade deficit economy, Brazil, China and Russia are the trade surplus ones. Exports are being recognized as the major driving force in the process of growth and development of the economies of these three nations. In 2002, exports as a percentage of GDP in case of Brazil was 15% while during 2005, this figure went up to 22% i.e., a net rise of 7% during a span of just three years. Exports as a percentage of GDP in China witnessed an increase of 12% i.e., from 28% to 40% during the same period. In case of Russia exports as percentage of GDP stood at 26%. But in case of India, this percentage was almost stagnant at 15% of GDP. This persisting trend in India is being attributed to domestic consumption and investment demand.

Treasury Management Magazine, Liberalization, Indian Economy, Emerging Economies, Gross Domestic Product, GDP, Asian Economies, Policy Makers, International Markets, Agricultural Goods, Industrial Intermediates, Global Standards, Manufacturing Sectors, Domestic Industry.