India·s foreign trade policy

GROUP:

ODD MBA

(IB)

INTRODUCTION:

Traditional objective was protection of domestic market from foreign competition. ´ Until 1980, not interested in exporting its goods and services abroad and not ready to open its economy to foreign investments. ´ The aim of its economic policy was to ensure the country·s independent development (the swadeshi) principle ´ In 1980·s India was one of the most closed economies in the world.
´

Therefore. as well as the implementation of the International Monetary Fund·s 1991 Structural Adjustment Program. and a multifaceted trade policy. deregulation and globalization of its economy. ´ With the Soviet Union·s collapse and the first Gulf War. ´ . India launched a new policy of privatization .CONTD The idea of a Free Trade Zone was abhorrent. India was left out of the Asian economic boom.

bilateral and multinational trade agreements including SAARC. its new policies on trade helps to increase the growth rate by 3% ´ . south east Asian nations. US. OPEC.EU. south Asian neighbors.CONTD ´ India signed regional. Indian international trade policy is a good example of the central contradiction in India·s economic policy .

. 1992. and augmenting exports from. the main legislation concerning foreign trade is the Foreign Trade (Development and Regulation) Act. India and for matters connected therewith or incidental thereto. The Act provides for the development and regulation of foreign trade by facilitating imports into.FOREIGN TRADE POLICY OF INDIA ´ In India.

(II) MAY PROHIBIT. . RESTRICT AND REGULATE EXPORTS AND IMPORTS. IN ALL OR SPECIFIED CASES AS WELL AS SUBJECT THEM TO EXEMPTIONS. THE GOVERNMENT :- (I) MAY MAKE PROVISIONS FOR FACILITATING AND CONTROLLING FOREIGN TRADE.AS PER THE PROVISIONS OF THE ACT.

including formulation and implementation of the export-import policy. (iv) is also authorised to appoint a 'Director General of Foreign Trade' for the purpose of the Act.CONTD iii) is authorised to formulate and announce an export and import policy and also amend the same from time to time. . by notification in the Official Gazette.

‡To act as an effective instrument of economic growth by giving a thrust to employment generation.OBJECTIVES ‡To double the percentage share of global merchandise trade within the next five years. .

industrialization and trades.STRATEGIES : ‡Removing government controls and creating an atmosphere of trust and transparency to promote entrepreneurship. ‡ Simplification of commercial and legal procedures and bringing down transaction costs. ‡ Simplification of levies and duties on inputs used in export products. .

particularly in semi-urban and rural areas. Facilitating technological and infrastructural up gradation of all the sectors of the Indian economy. while attaining global standards of quality. especially through imports and thereby increasing value addition and productivity. and developing a series of ¶Initiatives· for each of these sectors ‡. . trading and services. ‡ Generating additional employment opportunities.CONTD: ‡ Facilitating development of India as a global hub for manufacturing.

CONTD: ´ Neutralizing inverted duty structures and ensuring that India's domestic sectors are not disadvantaged in the Free Trade Agreements / Regional Trade Agreements / Preferential Trade Agreements that India enters into in order to enhance exports. to global standards. both physical and virtual. Up gradation of infrastructural network. related to the entire Foreign Trade chain. ´ .

Involving Indian Embassies as an important member of export strategy and linking all commercial houses at international locations through an electronic platform for real time trade intelligence.CONTD ´ Revitalizing the Board of Trade by redefining its role. ´ . giving it due recognition and inducting foreign trade experts while drafting Trade Policy. inquiry and information dissemination.

These thrust sectors include: (i) Agriculture. specific policy initiative for these sectors has been announced. . Accordingly.´ The FTP has identified certain thrust sectors having prospects for export expansion and potential for employment generation. and (iv) Leather & Footwear. (iii) Gems & Jewellery. (ii) Handlooms & Handicrafts.

Under the scheme. flowers. exports of these products qualify for duty free credit entitlement (5 per cent of Free On Board (f.b) value of exports) for importing inputs and other goods.o. vegetables. permitting the installation of capital goods imported under EPCG for agriculture anywhere in the Agri. Duty free import of capital goods under Export Promotion Capital Goods (EPCG) scheme.FOR THE AGRICULTURE SECTOR :´ A new scheme called "Vishesh Krishi Upaj Yojana (Special Agricultural Produce Scheme)" to boost exports of fruits.Export Zone (AEZ) ´ . minor forest produce and their value added products has been introduced.

tubers and planting material.CONTD: ´ Utilizing funds from the 'Assistance to States for Infrastructure Development of Exports (ASIDE) scheme' for development of AEZs. and liberalization of the export of plant portions. bulbs. derivatives and extracts to promote export of medicinal plants and herbal products ´ . Liberalization of import of seeds.

b) value of exports duty free import of trimmings and embellishments for handlooms and handicrafts.o.FOR THE HANDLOOMS AND HANDICRAFT SECTOR : ´ Enhancing to 5 per cent of Free On Board (f. Exemption of samples from countervailing duty (CVD). ´ ´ ´ . and Establishment of a new Handicraft Special Economic Zone. Authorizing Handicraft Export Promotion Council to import trimmings. embellishments and samples for small manufacturers.

b) value of exports.FOR THE GEMS AND JEWELLERY SECTOR :´ Permission for duty free import of consumables for metals other than gold and platinum up to 2 per cent of Free On Board (f.o. ´ Duty free re-import entitlement for rejected jewelery allowed up to 2 per cent of f.o. 1 lakh. Increase in duty free import of commercial samples of jewelry to Rs.b value of exports. and Permission to import of gold of 18 carat and above under the replenishment scheme ´ ´ .

´ For the leather and footwear sector. the specific policy initiatives are mainly in the form of reduction in the incidence of customs duties on the inputs and plants and machinery .FOR THE LEATHER AND FOOTWEAR SECTOR.

Also. The supplement provided renewed thrust to agricultural exports by extension of 'Vishesh Krish Upaj Yojna' to poultry and dairy products and removal of cess on exports of all agricultural and plantation commodities .1ST ANNUAL SUPPLEMENT APRIL 2005 ´ It provided for an active involvement of the State Governments in creating an enabling environment for boosting international trade. by setting up an InterState Trade Council. different categories of advance licences were merged into a single category for procedural facilitation and easy monitoring.

To further meet the objective of employment generation in rural and semi urban areas. which was renamed as "Vishesh Krishi and Gram Udyog Yojana". . export of village and cottage industry products were included in the 'Vishesh Krishi Upaj Yojana'.2ND ANNUAL SUPPLEMENT APRIL 2006 ´ announced the twin schemes of 'Focus Product' and 'Focus Market'. Also. a number of measures were introduced in order to achieve the objective of making India a gems and jewellery hub of the world.

´ (iii) permission to export polished precious and semi precious stones for treatment abroad and re-import in order to enhance the quality and afford higher value in the international market. These include:´ (i) allowing import of precious metal scrap and used jewellery for melting.refining and reexport. ´ (ii) permission for export of jewellery on consignment basis. .CONTD .

with rationalization and change in export performance parameters. ´ (iv) expansion of ceiling. ´ (iii) categorization of exporters as 'One to Five Star Export Houses' has been changed to 'Export Houses & Trading Houses'. ´ (ii) service tax on services rendered in India and utilized by exporters would be exempted/remitted.3RD ANNUAL SUPPLEMENT APRIL 2007 (i) exemption from service tax on services (related to exports) rendered abroad. scope and coverage under the 'Focus Market Scheme (FMS)' and 'Focus Product Scheme (FPS)'. ´ .

´ Income tax benefit to 100% EOUs available under Section 10B of Income Tax Act is being extended for one more year. beyond 2009.4TH ANNUAL SUPPLEMENT ´ Import duty under the EPCG scheme is being reduced from 5% to 3%. ´ To promote export of sports and toys and also to compensate disadvantages suffered by them. an additional duty credit of 5% over and above the credit under 'Focus Product Scheme' is being provided. . in order to promote modernization of manufacturing and services exports.

CONTD: ´ Our export of fresh fruits and vegetables and floriculture suffers from high incidence of freight cost. ´ ´ .5% over and above the credit available under Visesh Krishi and Gram Udyog Yojana (VKGUY) is proposed. an additional credit of 2. DEPB scheme is being continued till May 2009. Interest relief already granted for sectors affected adversely by the appreciation of the rupee is being extended for one more year. To neutralize this disadvantage.

MSTC.TRADE FACILITATION MEASURES 26TH FEBRUARY 2009. Special package of Rs. GEM & JEWELLERY EPC and STAR TRADING HOUSES added as nominated agencies for import of precious metals. ´ DUTY CREDIT SCRIPS under DEPB scheme to be issued without waiting for realization of export proceeds. DIAMOND INDIA. 325 crore for leather and textiles sector. STCL. Gem and Jewellery export: import restrictions on worked corals removed. ´ ´ ´ .

Threshold limit for recognition as premier trading houses reduced to Rs. 7500 crore. Under EPCG scheme. DEPB/DUTY CREDIT SCRIP utilization extended for payment of duty for import of restricted items also.CONTD: ´ Bhilwara and Surat recognized as towns of export excellence for textiles and diamonds. ´ ´ ´ . export obligation extended till 2009-10 for exports during 2008-09.

Value cap under DEPB revised for two products. ´ ´ ´ ´ .CONTD: ´ Procedure for claiming duty drawback refund & refund of terminal excise duty further simplified. Electronic message transfer facility for advance authorization and EPCG to be established. A new office of DGFT to be opened at Srinagar. FPS and FMS allowed. Re-credit of 4% SAD for VKGUY.

4.CONTD ´ Gem & Jewellery units in EOU to be allowed ² personal carriage of gold up to 10 kg.2002 requiring MODVAT/CENVAT certificate dispensed with. Advance licenses issued prior to 1. Early refund of service tax claims & further simplification of refund procedures on the anvil. ´ ´ ´ . Export obligation period against advance authorizations extended up to 36 months. Reimbursement of additional duty of excise levied on fuel to be admissible for EOUS.

Thank you .

Sign up to vote on this title
UsefulNot useful