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FOREIGN TRADE POLICY or EXIM POLICY is a set of guidelines and instructions and various policy decision taken by the government in the sphere of foreign trade i.e.
It is prepared and announced by the Ministry of Commerce. Initially it was introduced for the period of three years. After 1992, it is being made for 5 years.
POLICY FRAMEWORK
2.
Restrictive import policy Encourage cash flow of paper notes(income earned through exports)
To build foreign reserve and make a mark in foreign market To fulfil the requirements of capital goods Increased import led to a negative balance in foreign reserve
Adopted the policy of import liberalisation to encourage export promotion. New technology, raw materials of better quality and those which were not available within the country were imported.
EXIM Policy Committee appointed in 1962. Mr. V. P. Singh announced the EXIM Policy on the 12th of April, 1985 for a 3 year period.
Objectives:
Major Implications:
201 items of industrial machinery were placed on OGL (Open General License). Import export pass book scheme was introduced Import of 67 items of raw materials & components was transferred to limited permissible list
Announced on April 30, 1990 a new export import policy for a 3 year period. Objectives:
To encourage rapid and sustained growth in export. To streamline the procedures of import licensing and export promotion. To support research institution for building up scientific & technological capability.
Major Implications:
In order to liberalize imports and boost exports, the Government of India introduced the Indian EXIM Policy on April 1, 1992 for a period of 5 years.
Major Implications:
The duty-free Export Promotion Capital Goods (EPCG) scheme was introduced.
Export processing zones (EPZ) and 100 % export oriented units (EOUs) were granted several concession.
Objectives:
To accelerate the economy from low level to high level of economic activities. To improve technological strength and efficiency of Indian business sectors. To create new employment. To give quality consumer products at practical prices.
Major Implications:
Imports Liberalization Export Promotion Capital Goods (EPCG) Scheme Duty Entitlement Pass Book (DEPB) Scheme It encourage foreign investment in India.
Objectives:
merchandise trade.
Major Implication:
Objectives:
Major Implications:
Target plus scheme acted as an incentive to exporter. All goods and services were exempted from service tax.
To come back to a growth rate of 25% pa by 2014. To double export of goods and services by 2014 To double Indias share in global trade by 2020. To promote Brand India through 6 or more Made in India shows To accelerate growth in the export of services
1950s
1960-61
Government and private imports increased. Government set up 12 Export Promotion Councils.
1964-65
The trade regime was based on a complex system of licensing. Indias trade policy heavily relied on quotas rather than on tariffs There was a slow and sustained relaxation of import controls with the export-import Policy of 1977-78.
Main areas were tariffs, exchange rates, non-tariff barriers and capital flows.
Import licensing on all intermediate inputs and capital goods were abolished.
The policy focus was on liberalization of capital goods and inputs for industry, to encourage domestic and export-oriented growth.
The major task set for 1990s and beyond has been to lower tariff rates and lifting of foreign exchange control.
In February 1992, a dual exchange rate system was introduced. From February 1994, many current account transactions were permitted at the market exchange rate.
Rupee was officially convertible on current account. Restrictions on FDI and portfolio investment were eased. Measures were taken to relax control over foreign trade. Private sector was encouraged to enter into foreign market.
Trade initiative has moved towards the Special Economic Zones (SEZ) to enable exporters to avoid bureaucratic red tape governing
With respect to trade policy, India has been a proponent of multilateralism. However, in recent years, it has entered into bilateral
There has been opening up of the service sector to private participation, both domestic and foreign.
Many services have been placed on automatic approval route for FDI.
The key strategies outlined to achieve the recent foreign trade policy modifications are:
1.
Unshackling of controls and creating an environment of trust and transparency to unleash the capabilities of enterprises;
2.
Neutralizing incidence of all levies and duties on inputs used in export of products;
3.
Simplifying the procedures and bringing down transaction costs; Facilitating technological and infrastructure up gradation of all
sectors.
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