Merchandise trade: Merchandise trade only includes trade in goods, not services nor capital transfers and foreign investments. Official merchandise trade statistics measure the level, month-over-month and year-over-year changes in total trades, exports and imports.
- Balance of Merchandise trade: Balance of merchandise trade is equaled to total exports minus general imports. Exports are defined as total exports which include 1. Domestically produced goods and 2. Re-exports, that is re-exporting of goods which are imported and warehoused in India. General imports constitute of imports for immediate consumption channels..
- GATS: The General Agreement on Trade in Services (GATS) is a treaty of the World Trade Organization (WTO) that entered into force in January 1995 as a result of the Uruguay Round negotiations. The treaty was created to extend the multilateral trading system to service sector, in the same way the General Agreement on Tariffs and Trade (GATT) provides such a system for merchandise trade.
All members of the WTO are parties to the GATS. The basic WTO principle of most favored nation (MFN) applies to GATS as well. However, upon accession, members may introduce temporary exemptions to this rule.
- International trade in Services: The definition of services trade under the GATS under WTO is four-pronged, depending on the territorial presence of the supplier and the consumer at the time of the transaction. Pursuant to Article I:2, the GATS covers services supplied from the territory of one Member into the territory of any other Member
- a. (Mode 1 — Cross border trade); in the territory of one Member to the service consumer of any other Member : A user in country A receives services from abroad through its telecommunications or postal infrastructure. Such supplies may include consultancy or market research reports, tele-medical advice, distance training, or architectural drawings.
- b. (Mode 2 — Consumption abroad);by a service supplier of one Member, through commercial presence, in the territory of any other Member: Nationals of A have moved abroad as tourists, students, or patients to consume the respective services.
- c. (Mode 3 — Commercial presence); and by a service supplier of one Member, through the presence of natural persons of a Member in the territory of any other Member: The service is provided within A by a locally-established affiliate, subsidiary, or representative office of a foreign-owned and — controlled company (bank, hotel group, construction company, etc.).
- d. (Mode 4 — Presence of natural persons): A foreign national provides a service within A as an independent supplier (e.g., consultant, health worker) or employee of a service supplier (e.g. consultancy firm, hospital, construction company).
- 5. Balance of trade: The balance of trade (BOT) is the difference between a country’s imports and its exports of Goods (merchandise) and services for a given time period.
- Wholesale Price Index: An Index is a statistic which assigns a single number to several individual statistics in order to quantify trends.
- A well-known index in India is the wholesale price index, which gives a sort of “average” value for inflation based on price changes for a basket of selected products having a defined weight for each one of them and a well- defined calculation methodology.
- The Consumer Price Index (CPI), SENSEX, Dow Jones and NASDAQ indexes are also index numbers.
- It is used as a measure reflecting the average of the proportionate changes in the quantities of the specified set of goods and services between two periods of time. Usually an index is assigned a value of 100 in some selected base period and the values of the index for other periods are intended to indicate the average percentage change in quantities compared with the base period.
- Currently in India the base year for WPI is 2004-5.
- WPI is calculated on the principle of weighted arithmetic mean, according to the Lasperyre’ s formula, which has a fixed base- year weighting diagram operative through the entire life span of the series.
- The formula used for the calculation of WPI in India is:
I = ∑(Ii x Wi)/ ∑Wi
Where ∑ represents the summation operation,
I= Index Number of wholesale prices of a sub- group/group/major group/All commodities
Wi= The weight assigned to the ith item/sub- group/group/major group
Ii= Index of the ith item/sub- group/group/major group
- Primary products: Primary products are goods that are available from cultivating raw materials without a manufacturing process. Significant primary product industries include agriculture, fishing, mining, and forestry.
- Manufacturing: The process of converting raw materials, components, or parts into finished goods that meet a customer’s expectations or specifications. Manufacturing may employ a man-machine setup with division of labor in a large scale production. It can be done on a small scale as well.