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The exports and imports that a country makes together make up its
foreign trade. If exports are more than imports, it is called trade surplus
and if imports are more, it is called trade deficit. India almost every year
since Independence had a trade deficit.
Exports are foreign exchange earners. They stabilise and strengthen the
exchange rate, if they grow. They may be necessary for some importsfor example, jems and jewellery industry imports stones and carves them
into jewelry in India. Experts make the domestic economy efficient as
international market requires high quality low price goods and services.
Imports are important for exports, domestic capital formation and
consumption. They make domestic producers competitive.

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Export Composition
Great changes in the sectoral compostion of India’s export basket seen in
the 2000s decade have accelerated in the beginning of this decade. While
the share of petroleum crude and products increased by 11.8 percentage
points during the 10-year period from 2000-1 to 2009-10, it further
increased by 4.8 percentage points from 2009-10 to the first half of 201112. The share of the other two sectors, i.e. manufactures and primary
products fell almost proportionately by 11.6 and 1.1 percentage points
respectively during 2000-1 to 2009-10 and 1.4 and 2.2 percentage points
from 2009-10 to the first half of 2011-12. The inter-sectoral composition
changes within manufactures exports have also been great -

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-with the bigest losers being labour-intensive manufactures like
textiles, leather and leather manufactures, and handicrafts from 23.6,
4.4, and 2.8 per cent respectively in 2000-1 to 8.7, 1.6, and 0.3 per cent in
the first half of 2011-12. The biggest gainer is the engineering goods
sector with its share increasing from 15.7 per cent in 2000-1 to 22.2 per
cent in the first half of 2011-12.

India’s Services Exports
For more than a decade, Indian growth story has been dominated by
the services sector. This domination was also evident from the trend
in export of services (receipts) which grew at a CAGR of 23.4 per cent
during 2000-1 to 2010-11 while merchandise exports grew at a CAGR
of 18.6 per cent during the same period.

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While growth in exports of travel transportation, and insurance services
services was higher in the first half of 2011-12 than in the first half of
2010-11, overall growth moderation in services exports in the first half
of 2011-12 was due to low export growth (10.7 per cent) of miscellaneous
services which accounted for nearly 72 per cent of total services
exports.

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Under the FMS in the Foreign Trade Policy, fifty two (52) African
countries, thirty one (31) Latin American countries, ten (10)
Commonwealth of Independent States-Central African Republics, five
(05) East European countries, eleven (11) Asia-Oceania block countries
and one (01) Asian county have been notified for benefit on exports of
all products.

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Under the MLFPS in the Foreign Trade Policy, several non-traditional
export markets in Africa, Middle East Asia, East Asia, Latin America,
Central Asia such as Algeria, Egypt, Kenya, Nigeria, South Africa,
Tanzania, Brazil, Mexico, Ukraine, Cambodia, Vietnam, Qatar, Singapore,
Bahrain, Kuwait, Bangladesh, Philippines, Saudi Arabia, Iran, Korea PR,
Japan and China have been notified for benefit on exports of select
products.

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There are at present eleven Export Promotion Councils under the
administrative control of the Department of Commerce and nine export
promotion councils related to textile sector under the administrative
control of Ministry of Textiles These Council are registered as non profit organisations under the Companies Act/Societies Registration
Act. The Export Promotion Councils perform both advisory and
executive functions. These Council are also the registering authorities
under the Export Import Policy, 1997-2002 These Councils have been
assigned the role and functions under the said Policy.

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One of the major dimensions of the economic reforms undertaken since
1991 was globalizing Indian economy of which liberalization of foreign
trade is a central aspect. The following reforms were made

• Devaluation of the currency in 1991 to boost exports
• Rupee convertibility on the trade account since 1992 to incentivize
exporters

• Cutting down the peak customs duty that stood at above 300% in 1991
to 10% in 2009 to import goods and services primarily for facilitating
exports

• Simplification of procedures
• SEZs
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• FTAs/Cepa/Ceca
• WTO-led schedule for global trade integration
• Incentives exporters like DEPB, interest rate subsidy (subvention) etc.
• Sector specific packages
• diversification
The effect is that exports have registered remarkable growth; created
employment; given the country adequate forex; made the economy
competitive; brought in FDI etc.

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In recent years, one of the important objectives of trade policy has been
to integrate it with the process of economic development and creation of
more employment opportunities.
However, in recent years, the exports have not been doing well and their
share in the country’s exports has been declining.
Government identified 12 export sectors as employment intensive
textiles and garments, leather goods, gems and jewellery, cereals,
horticulture, flowers, fruits and vegetables, dairy products, processed
foods, toys and sports goods, pharmaceuticals, automobiles and autocomponents consumer electronics and electronic hardware.
Special efforts are needed to promote exports from these labourintensive sectors.

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MAI scheme is intended to provide financial assistance for medium term
export promotion efforts with sharp focus on a country / product.
Financial assistance is available for Export Promotion Councils (EPCs),
Industry and Trade Associations (ITAs), Agencies of State Governments,
Indian Commercial Missions (ICMs) abroad and other eligible entities as
may be notified.
A whole range of activities can be funded under MAI scheme. These
include, amongst others,

• Market studies,
• Setting up of showroom / warehouse,
• Sales promotion campaigns,
• International departmental stores,
• Publicity campaigns etc.
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Objective is to offset high freight cost and other externalities to select
international markets with a view to enhance our export
competitiveness in these countries. Duty Credit scrip benefits are one
available.
FOCUS (LAC), Focus (Africa), Focus (CIS) and Focus (ASEAN + 2)
programmes are operating.
Helps the country diversify the geographical base and withstand any
economic crisis.

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Objective is to incentivise export of such products, which have high
employment intensity in rural and semi urban areas, so as to offset
infrastructure inefficiencies and other associated costs involved in
marketing of these products. Some Special Focus Initiatives are for
Agriculture, Handicrafts, handlooms, Gems & Jewellery and Leather &
Footwear sectors.

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The Export-Import Bank of India (Exim Bank) is a public sector
financial institution created by an Act of Parliament, the Exportimport Bank of India Act, 1981. The business of Exim Bank is to
finance Indian exports. Bank’s primary objective is to help exportrelated companies by offering them a comprehensive range of
products and services.

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The Duty Entitlement Pass Book (DEPB) scheme was discontinued with
effect from 30.09.2011. Since a Duty Drawback Scheme was already in
existence, the erstwhile DEPB products were incorporated in the Duty
Drawback Schedule (DDS) 2011-12 with effect from 01-10-2011.
Approximately 1100 additional entries were made in the DDS for those
erstwhile DEIB products that were not already specifically mentioned in
the DDS. Appropriate rates of duty drawback were provided across the
DDS. These range from 1 per cent to 17 per cent of FOB value. Many of
the export goods with duty drawback rates more than 3 per cent have
been provided with drawback caps.

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Special Bonus Benefit Scheme, within the Focus product Scheme,
covering 49 products in Engineering, Pharmaceutical and Chemical
sectors, was introduced to provide special assistance @1 per cent of FOB
value of exports for 6 months from 1.10.2011 to 31.3.2012.

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GSI (Global Standards) India is a not-for-profit standards body
promoted by the Ministry of Commerce and Indian Industry to spread
awareness and provide guidance on adoption of global standards in
Supply Chain Management by Indian Industry for the benefit of
consumers, Industry, Govt. etc.
GSI India is the only organisation in India authorised to issue company
prefix numbers for use in barcodes, RFID tags etc. for unique,
unambiguous and universal identification of products, cartons,
containers etc. GSI standards find wide application in Supply Chains
across sectors. GSI standards are the de-facto global standards in
identification of consumer products in Retail. GSI India is an affiliate of
GSI Global Office, twin headquartered at Brussel (Belgium) and New
Jersey (U.S.A.).

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