DEVELOPMENT OF FOREIGN TRADE POLICY

Control of foreign trade initiated after second world war

Concentrate on restricting imports initially in the Defence

Sep 1946, Emergency Provisions(Continuance) Ordinance Act for import control

Replaced by Imports & Exports Control 1977 Fluctuations in the tenure of EXIM policy Finalized in 1992(1992-1997) to have 5 year policy Foreign Trade (Dvpt & Regn)Act,1992

GLOBAL ECONOMY

Inspite of the turmoil in the world capital market, the global mkt kept growing since 1997

Growth of world trade and GDP was high in 1997 than ever in 90s

Indicator of this economic expansion is the per capita income growth recorded by most of the developed countries

126, out of 153 WTO member countries, have registered increase in per capita income

The year 2001 witnessed an unexpected decline in world trade which fell down by 1.5% ever since 1987. but this got reversed by 2001

A good yardstick for the measurement of World economy is GDP which can be defined as “ Sum total of the value of all goods and services produced in the country”.

RESULTS OF THE DVPT IN FOREIGN TRADE

Goods or services provided are expected to be of international quality and price

Service sector has grown and is now 20% of the world trade

Imports are allowed for certain Commodities

Explosion in the visual and written media made people demand high quality goods and as per convenience

The growth of Information technology industry has touched the life at all levels

IMPACT OF RECENT CHANGES IN THE DVPT OF FOREIGN TRADE Dismantling of industrial license which enabled most of the entrepreneurs to

decide on the productive ventures

Allowing foreign investment without setting limit

Allowing NRI and FII to invest in industries

Free flow of technology for modernizing and upgrading industries

Removal of certain restrictions on imports with reduction in tariff rates

Full convertibility of Indian rupee on the trade account

Allowing the retention of forex earnings by exporters for meeting their expenses

Allowing private ventures in the field of banking, civil aviation and telecom

Private sector investment in Oil, Refining, exploration, marketing and in other infrastructural dvpt’s

EXPORT PROMOTION

Reasons for countries to concentrate on exports:

Foreign markets provide opportunities to achieve economies of scale and growth

Demand in overseas is more than domestic demand Enables to achieve export led growth Export market reduce effects of domestic recession Boost forex reserve & meet international competition

OBJECTIVES OF EXPORT PROMOTION

Compensate for high cost of production Assist new and infant exporters Increase profitability

ORGANISATIONAL SETUP

Ministry of commerce

Admn general

Finance EconomicTrade policy

Foreign trade

territorial

Export product

Service Industries

AUTONOMOUS BODIES

1. Commodity board2. Export inspection council3. Indian Institute of Packaging4. IIFT

a. Training of personnelb.Research in problems of FT

5. EPC6. FIEO7. Indian Council of Arbitration8. MPEDA9. APEDA10.Indian Trade Promotion Orgn (TDA & TFAI)

PUBLIC SECTOR UNDERTAKINGS/ CANALISING AGENCIES

State trading corporations and its subsidiaries MMTC Spices trading Corporation ECGC