Adhering to the World Trade Organization is an important step to help India attend the international trade, and as a result, it promotes to change the pharmaceutical industry of India. With rules of WTO, the pharmaceutical companies have to respect to the intellectual property rights, and as a reward, the Indian companies achieve agreements with the Western companies as commercial partnerships in India's pharmaceutical sector. Those have made a big change in India's pharmaceutical industry. Before signing the WTO agreement, India is a country manufacturing cheap knockoff of drugs stemmed from copying Western patents illegal. The violence of the intellectual property rights caused an isolation of the Indian market in the international market, especially the Western market.
2. What factors have contributed to the growth of India’s pharmaceutical industry?
First, the agreements of outsourcing from the Western firms are the production and packaging of pharmaceutical products, while research and development, marketing, and sales activities are kept on the firms' home market. The outsourcing helps the dramatic development over India's pharmaceutical sector. According to the textbook, more than 10 years from 2000 to 2011, India's pharmaceutical export increased more than 10 times, from $1 billion to $11.5 billion. Second, India has an educated workforce with good English and a low level in pay. The workforce and local start-ups experienced a stage of the international pariah in the pharmaceutical market, so they help to make a market of investigation and work in the pharmaceutical products as well as expertise in negotiating with regulatory agencies in Western countries. Third, Indian plants are accepted by FDA to product the pharmaceuticals for the U.S. market, today.
Closing Case: The Rise in Bangladesh's Textile Trade
1.What international trade theory, or theories, best explain the rise of Bangladesh as a textile exporting powerhouse?
Cost of direct labor and allocated overhead are two of the main factors in structure of product cost, so when the costs lows, the product cost will lower. Bangladesh's textile has the two advantages of costs, cost of direct labor and overhead. The overhead is low and efficient by three-quarters of all inputs stemmed from the country which help to save transportation costs, import taxes, and storage costs. According to Ricardo's theory of comparative advantage, if the production of Bangladesh's textile is more efficient in comparison with the textile production in the U.S. and other Western countries, the countries should buy Bangladesh's textile, and the trade happened in stage of the economic crisis in 2008. That helped Bangladesh's exports of textile continued to increase and overcame the stage of the economic crisis.
2. How secure is Bangladesh’s textile industry from foreign competition? What factors could ultimately lead to a decline?
Bangladesh's textile is attractive to the Western countries' importers because of its low cost, and because it also offers a chance for replacing on the imported garment from China, which can be too risky because of as a unique source. However, despite there is a good position in the international market, Bangladesh is still facing some serious challenges over its infrastructure, such as roads, ports, and power generation, which could affect its exports of textile. To keep the advantage, securely, Bangladesh should invest the infrastructure to avoid disruptions which can affect its supplies and discourage the importers.
