IB Economists

Throughout May, the situation between India and China at their border. In June, 20 Indian soldiers were killed in a clash at the Galwan valley which led to an escalation in tensions between the two economic and military powerhouses. This sparked anger among the Indians and many, including politicians called for a boycott of Chinese Imports. However, what is not known is if India can live without Chinese goods. China is India’s largest trading partner and India runs a trade deficit with China, which means the value of goods imported from China is more than the goods exported from India to China. The problem with boycotting Chinese goods is that the goods imported from China are to a large extent goods which are cheap but to an extent quality goods, such as mobile phones. Although goods from European and American competitors tend to be better than the Chinese, they are expensive and only a small proportion of Indians can afford them. Therefore, those who are rich are less likely to use g...

The Asian Infrastructure Investment Bank (AIIB) approved a $750 million loan for India to fight the Covid-19 Pandemic. The bank also stated that the fund will help with ‘bolstering economic aid for businesses, including for the informal sector, expanding social safety nets for the needy, and strengthening the country’s health care systems’.  India currently has the third highest number of coronavirus cases and according to the world bank 270 million people in India live below the national poverty line. While 81 million live in densely populated settlements with limited access to health care.  This loan is one of the many, banks across the world have provided India with funds to combat the coronavirus. The world bank has provided a $1 Billion package and the AIIB has also helped India previously with the help of loans.  This loan focuses on the informal sector and strengthening the healthcare systems, which is the need of the hour, since those working in the informal secto...

Recently, the prime minister of India Narendra Modi announced an injection of 20 lakh crore into the economy. The aim of the investment is to help India take a step forward towards economic stability. According to news, The PM claimed that it may take an extensive period of time to combat the outbreak of Covid-19, and hence it is salient for the economy to continue its economic growth to avoid a severe unprecedented economic crisis. Thus, the government decided to enhance economic activity by injecting money into the economy. Furthermore, the government of India also aspires to make India and reduce its economic dependency to avoid any vulnerability to the economy (in terms of relying on imports) during times of exogenous shocks. The injection into the economy may be controversial, and may not bring out the expected outcome for the economy. There are numerous theories and ideas which indicate that such a fiscal stimulus can have negative effects on the India economy. Fi...