An Economic Analysis of India and the

United Kingdom

Kristopher Sykes

Chadwick Moore

Jessup Gravitt

Brenau University

Team 3 – BA787

Introduction

• Economic Histories of the United Kingdom and

the Republic of India

• Current Economies of the United Kingdom and the Republic of India

• Current International Trade in the Economies of the United Kingdom and the Republic of India

Economic History of the United Kingdom

• Economic structure founded upon Mercantilism– Protectionism based Commercial Trading.

• Leader of the Industrial Revolution– Moved toward freer trade in the mid 1800s.

• Increased Global Competition with the US and Germany– Leader in finance, shipping and trade during Edwardian Era.

• World War I and the Great Depression– High Unemployment and the abandonment of the Gold

Standard.

Economic History of the United Kingdom

• World War II and Post-War Economy– Mobilization of workforce and increased productivity.

– Rapid economic growth throughout the 1950s & 1960s.

• Oil Crisis and the rise of Margaret Thatcher– 1973 Oil Crisis led to double digit inflation and rising

unemployment.

– Thatcher imposed privatization, deregulation, tax changes and restructuring industrial policies.

– Resulted in GDP growth of 5% and UK assets rose from £12 billion to £110 billion.

Economic History of India

• Independence from the United Kingdom

– Economic stagnation plagued by corrupt government.

– High poverty rates, increasing unemployment and inflation into the 1990s.

– Collapse of the Soviet Union pushed India toward the global market for oil.

– In 1991 India ended its closed door economic policy.

Economic History of India

• Trade Liberalization and the rise of India in the global market– Reformation led to lower tariff levels, lineated

industrial licensing policies, and improved policy of exchange rates.

– Barriers removed allowing for increased foreign direct investment led to rising prosperity

– Increased middle class and growth of domestic consumption led to further increases in the level of foreign direct investment.

British East India Company-

The First MNE

Current Economic State of the

United Kingdom• The United Kingdom is a capitalistic economy

that has displayed the strongest growth of the G20 economies since 2010 – The key sectors most impactful to the United

Kingdom’s economy are services, manufacturing, and construction.

– The country has seen a decreased growth rate during the first half of 2016, and with the recent exit of the country from the European Union, the trend in the decreasing growth rate is likely to continue through at least the current year.

India’s Current Economic Situation

• India has the world’s fastest growing economy, growing at 7% annually.

• Six years ago, India proudly joined the club of trillion dollar economies.

• India is ranked the 10th largest economy in the world bringing in $2.04 trillion in GDP.

• Inflation is 5.5%.

India’s Current Economic Situation

• Outsourcing is a major economic driver in the service industry.

• The Corporate tax rate is 30%.

• 50% of the population works in agriculture and more than 40 percent live on a $1.00 per day.

The United Kingdom and

International Trade

• Leading in international trade– The United Kingdom’s success in foreign trade is due

mainly to the country’s strong economic fundamentals.

– These include a low tax economy, low levels of industrial disruption, a strong system of contractual law, and strong international financial institutions.

– Seven out of the ten top markets in which the United Kingdom experiences a trade deficit are members of the European Union, and the U.K.’s trade deficit with the EU as a whole is roughly $90 billion.

India’s International Trade

• India has a competitive advantage in the service labor market.

• India exports approximately $287 billion a year while importing 432 billion a year.

• Their major trading partners are the U.S., China and UAE.

• Factors slowing trade: Corruption, unpredictability, poor infrastructure

UK-India Collaboration

Questions??

References