"7 ConclusionsThe depreciation of the Indian currency can lead to an improvement in the trade balance as thedemand for exports and import are perfectly elastic, provided the supply shocks are curbed. Indiais prone to supply shocks due to high agricultural and imported raw material dependence whichreduces growth and increases inflation. India is grappling with high inflation (more thanthreshold limit of 3%) which reduces exports and increases imports. Also, when rupee falls butsupply remains the same, Indian exports may rise temporarily as production is diverted fromdomestic market to export market (since exporting becomes more profitable relative to domesticsales). But large exports will increase the domestic prices of exports and the initial gain ininternational price competitiveness will be neutralized by higher inflation. Stringent qualitativeand quantitative measures are required to check inflation which has social and economicinfluence. Inflation is also the result of supply not meeting demand due to economic loss becauseof the natural disasters. For instance, inflation reached 11 % in 2010 as food grain productionreduced by 17 million tone due to deficient monsoon (inflation was 14.7 for primary articles).The annual loss in India due to disasters is $10 billion and there is requirement for adequateinvestment in the Disaster Risk Reduction (DRR). This will not only reduce inflation but alsomake significant difference in achieving the national and international targets in terms ofimproving health, providing education, sustainable growth and output, thereby making exports’supply elastic. Policies also need to be adopted to restrict the negative impact of trade opennesswhen financial crisis occurs as they have negative impact on the exports and imports. Apart fromthese three factors, there is requirement to review the Free Trade Agreements of India as it isoften voiced that these are more for maintaining geo-political relationships rather thancommercial benefits. Also, it was pointed out in The Economist India Summit 2016 by21 Commerce and Industry Minister Nirmala Sitharaman that exporters are unable to exploit theFTAs to their favor and some of the exports that could have taken place in the absence of FTAsare not actually happening. Infact, some of the trade agreements have led to an increase in tradebut only on the import side and not exports as India maintains higher tariff rates as compared toits partners. To sum up, India needs to unveil the opportunity by adopting measures to curb factors leading tosupply constraint which affects exports negatively. This study concludes that demand of exportsand imports are perfectly elastic and Marshall-Lerner Condition is satisfied assuming perfectelasticity of supply of exports. Therefore, the constraints are definitely not due to global demand,instead due to insufficient supply of exports which is due to non-optimum inflation rate, highrates of natural disasters, global crisis and unfavorable FTAs. Thus, government needs to adoptstringent policies towards them. NOTES1. CEPR Policy Portal, accessed on 7 February 2017,http://voxeu.org/debates/commentaries/inflation-targeting-developing-countries-revisited(CEPR)2. US Thomas Reuters, 22 March 2014, accessed on 5 February 2017,http://blogs.reuters.com/india-expertzone/2014/03/22/how-much-inflation-is-good-for- growth/.3. The Times of India, 11 March 2015, accessed in 5 February 2017,http://timesofindia.indiatimes.com/india/Disasters-cost-India-10bn-per-year-UNreport/articleshow/46522526.cms4. Same asNote 3 5. Same as Note 322 6. Firstpost, 201 December 2014, accessed on 5 February 2017,http://www.firstpost.com/world/why-indias-fta-with-eu-is-very-bad-for-its-people- 675797.htmlth 7. Live Mint, 17 February 2016, accessed on 5 February 2017,http://www.livemint.com/Politics/9IBOogA8nYEQN5jCxp8uhP/Economic-survey-to- assess-impact-of-FTAs-on-India.html8. The Economic Times, 27 February 2016, accessed on 6 February 2017,http://economictimes.indiatimes.com/news/economy/foreign-trade/eco-survey-2016- need-to-review-ftas-as-imports-grow-more-than-exports/articleshow/51154923.cms th 9. The Times of India Business, 7 September 2016, accessed on 6 February 2017,http://timesofindia.indiatimes.com/business/india-business/Centre-taking-a-relook-at- free-trade-agreements-Nirmala/articleshow/54048915.cms10. Same as Note 611. Same as Note 112. Same as Note 2 REFERENCES1. Adnan Ali Shahzad (2013): “Relationship Between Exchange Rate And Trade BalanceOf South Asia: The J-Curve Pattern” International Journal of Research In Commerce,Economics and Management, Vol 3, No 7, pp 99-105.2. Aftab, Z., & Khan, S. (2008).: “Bilateral J-Curves between Pakistan and Her TradingPartners”:Pakistan Institute of Development Economics.(VOL)3. Alawattage, U (2005).“Exchange Rate, Competitiveness and Balance of PaymentPerformance” Staff Studies, Vol 3, No 1, pp 63-91.4. Awan, R. U., Shahbaz, M., Sher, F., & Javed, K. (2012): “Does J-curve PhenomenonExist in Pakistan? A Revisit.” Interdisciplinary Journal of Contemporary Research inBusiness, Vol3, No9 ,pp1456-14675. Bahmani-Oskooee, M. (1985): “Devaluation and JCurve: Some evidence from LDCs”.The Review of Economics and Statistics, Vol 6, No 3: pp 500 – 504. 23 6. Bahmani-Oskooee and Cheema (2009): “Short-Run And Long-Run Effects Of CurrencyDepreciation On The Bilateral Trade Balance Between Pakistan And Her Major TradingPartners” Journal Of Economic Development Vol 34, No 1, pp 19-467. Botzen, W. J. W., & van den Bergh, J. C. J. M. (2009):“Managing natural disaster risksin a changing climate” Environmental Hazards, Vol 8, No 3, pp 209–225,doi:10.3763/ehaz.2009.00238. Bruno, M.,& Easterly,W. (1998): “Inflation crises and long-run growth”Journal ofMonetary Economics, Vol 41, pp3–26.9. EM-DAT International Disaster Database (2015) :India,http://www.emdat.be/country_profile/index.html10. Gujarati , Damodar (2003) :Basic Econometrics, New York: The McGraw-HiliCompanies11. IPCC (2012): “Summary for Policymakers In Managing the Risks of Extreme Events andDisasters to Advance Climate Change Adaptation”, A Special Report of Working GroupsI and II of the Intergovernmental Panel on Climate Change, Cambridge University Press.12. Judith Olivia Canipe(2012): “Testing the Marshall-Lerner-Robinson Condition in Ghanaprior to 1983: Was a devaluation of the cedi justified in improving the trade balance?”Master's Thesis, University of Tennessee, http://trace.tennessee.edu/utk_gradthes/136613. Lal, A. K., & Lowinger, T. C. (2002): “Nominal effective exchange rate and tradebalance adjustment in South Asia countries”Journal of Asian Economics, Vol 13, No 3,pp371-383.14. Martin Gassebner, Alexander Keck and Robert Teh(2006) : “The Impact of Disasters onInternational Trade” Staff Working Paper ERSD-2006-04, World Trade OrganizationEconomic Research and Statistics Division, pp 1-25.15. OECD Database (2017): Inflation (CPI), https://data.oecd.org/price/inflation-cpi.htm16. Padmanabhan (2012): “What causes economics losses from natural disasters in India inHandbook of Research on Climate Change on Health and Environmental Subsidy”, pp157-173, Hershey PA, USA, IGI Global book series Advances in EnvironmentalEngineering and Green Technologies17. Perera, W. (2009). : “Bilateral J-curve between Sri Lanka and its major trading partners”.Staff Studies, Vol 39, No 1, pp69-8524 18. Ritesh Pandey (2013): “Trade Elasticities and the Marshal Lerner” Global Journal ofManagement and Business Studies, Vol 3, No 4, pp. 423-428.19. Sarel, M. (1997): “ Nonlinear effects of inflation on economic growth”IMF WorkingStaff Papers, Vol 43, No 1, pp 199–215.20. WMO. (2014):“Atlas of mortality and economic losses from weather, climate andweather extremes (1970-2012)” WMO No. 1123, World Meteorological Organization,Geneva, Switzerland,http://www.wmo.int/pages/prog/drr/ transfer/2014.06.12- WMO1123_Atlas_120614.pdf21. World Bank database (2015): Exports of goods and services as percentage of GDP(India), http://data.worldbank.org/indicator/NE.EXP.GNFS.ZS22. World Bank database (2015): Imports of goods and services as percentage of GDP(India), http://data.worldbank.org/indicator/NE.IMP.GNFS.ZS23. World Bank database (2015): Exchange Rate of goods and services as percentage of GDP(India), http://data.worldbank.org/indicator/PA.NUS.FCRF24. World Bank database (2015): GNI per capita of India,http://data.worldbank.org/indicator/NY.GNP.PCAP.PP.CD 25. World Bank database (2015): Trade as percentage of GDP (India),http://data.worldbank.org/indicator/NE.TRD.GNFS.ZS26. World Bank database (2015): Net Trade in goods and services (India),http://data.worldbank.org/indicator/BN.GSR.GNFS.CD25 "