The global or international environment is very important from the point of view of certain categories of business. It is particularly important for industries directly depending on import competing industries. For example a recession in foreign markets or the adoption of protectionist policies by foreign nations may create difficulties for industries depending on exports. On the other hand a boom in the export market or a relaxation of the protectionist policies may help the export oriented industries. In has been observed that major international developments have their spread effects on domestic business. Oil price hikes have seriously affected a number of economies. These hikes have increased the cost of production and the prices of certain products such as fertilisers synthetic fibers etc.
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