Question

Will the following be included in the domestic product of India? Give reasons for your answer
(a) Profits earned by foreign companies in India
(b) Salaries of Indians working in the Russian Embassy in India
(c) Profits earned by a branch of State Bank of India in Japan

Answer 1

(a) Profits earned by foreign companies in India: Profit earned by foreign companies in India will be included in the domestic product of India as they lie within the domestic territory of the country.
(b) Salaries of Indians working in the Russian Embassy in India: No, this will not be included in the domestic product as the Russian Embassy is not a part of the domestic territory of India.
(c) Profits earned by a branch of State Bank of India in Japan: No, this will not be included in the domestic product as the branch of State Bank is located in Japan and thus, is not a part domestic territory of India.