The Influence of Global Trade on The Financial Growth of India

Abstract

Continued debates and research on the outcome of trade on financial growth have been prompted by the rising scale of foreign trade. By reducing trade obstacles, the research empirically analyses the effect of foreign exchange on Indian financial development. The wald test demonstrates the co-integration of the series. The long-term estimates for the link between exports and internal investment with GDP show a positive and vital relationship. There is a harmful and statistically relevant connection among imports and exchange rates for GDP. Short-term connection estimates show a positive and vital correlation between export and domestic investment and GDP, though negative but statistically unimportant, in the short-term import-exchange rate relationship. There was also a considerable speed of adjustment time. The short-term causality results show short-term causalities between exports, local investment and GDP exchange rates. The Policy Recommendation involves improving the export promotion and import discouragement coupled with domestic investment promotion and improvement and exchange rate reduction.