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) Yes, it will be included in domestic product because it is a factor income earned within domestic territory of India.
(b) No, it will not be included in domestic product because Russian Embassy is not a part of domestic territory of India.
(c) No, it will not be included in domestic product as profits are not earned within domestic territory of India.