Another issue is that the Indian government enforces an export duty on domestic

Another issue is that the indian government enforces

This preview shows page 1 - 3 out of 3 pages.

Another issue is that the Indian government enforces an export duty on domestic companies, restricting foreign trade. This results in inflated current rental rates for capital, which limits production in most of their capital-intensive exports. These government regulations have limited the nation’s trading capabilities, which has pushed the production possibilities frontier inward. Ultimately, this pushes India’s isocost line towards the origin, reducing the size of the trade triangle .
Image of page 1