Chapter 27

India’s Import–Export Policies

HISTORICAL PERSPECTIVE

• Historically, export and import (exim) controls were first introduced in India in 1939 as a wartime measure under the Defence of India Act and Rules, 1939.

• After independence the import control did not undergo any structural change, but its objective became quite different.

LIBERALISATION POLICY OF EXIM

• The new government took office at a time when the balance of payment (BoP) position facing the country had become critical and foreign exchange reserves (FER) had depleted to dangerously low levels.

• Several changes were introduced in trade policy that aimed at strengthening the export incentives, eliminating a substantial volume of import licensing, and applying an optimal import compression in view of the BoP situation.

LIBERALISATION POLICY OF EXIM• Export Processing Zones (EPZs) and 100 Per cent Export-oriented Units (EOUs).• Automatic Approval Scheme.• Centralised Clearance.• Concessions to EOUs/EPZs.• Private Participation in Warehouses.• Simplifi ed Procedure for Import of Capital Goods.• Access to Non-OGL (Open General Licence) Capital Goods.• Harmonising Trade and Customs Classifi cation.• Canalisation of Exports and Imports.• Objectives of Public Sector Trading Organisations.• Export Houses and Trading Houses.• Foreign Currency Accounts for Exporters.• Board of Trade (BoT).• Re-orientation of the Offi ce of CCI&E.• State’s Role in Exports Promotion.• Reduction in Import Licensing.• Elimination of Licensing and QRs.

Objectives of the Exim Policy

Exim Policy

• Exim Policy, 1997–02• Modifi ed Exim Policy, April 1998• Exim Policy, 1999–2000• Exim Policy, 2000–01• Exim Policy, 2001–02• Exim Policy, 2002–07• Exim Policy, 2007--14

TRADE SCENARIO

SPECIAL ECONOMIC ZONES (SEZs)

The salient features of the SEZ Scheme are:

Some of the highlights of the SEZ Scheme are as follows:

AGRI-EXPORT ZONES (AEZs)

• The AEZ Scheme has been introduced to transform rural regions into regional rural motors of the export economy.

HIGHLIGHTS OF FOREIGN TRADE POLICY (FTP), 2004–09

The New Foreign Trade Policy (NFTP) takes an integrated view of the overall development of India’s foreign trade and essentially provides a roadmap for the development of this sector.

• Special-focus Initiatives• New Export Promotion Schemes• Simplification/Rationalisation/Modifications of the

Ongoing Schemes• Simplification of Rules and Procedures and

Institutional Measures

Highlights of the Annual Supplement 2010-11 to theForeign Trade Policy 2009-14

• The year 2009 witnessed one of the most severe global recessions in the post-war period.

• Exports suffered a decline in the last 10 months of 2009• Short term objective the policy is to arrest and reverse the

declining trend of exports and to provide additional support especially to those sectors which have been hit badly

• Long term objective : annual export growth of 15% with an annual export target of US$ 200 billion by March 2011.

• By 2014, the country should come back export growth of around 25% per annum.

• The long term policy objective for the Government is to double India’s share in global trade by 2020.

Mix of policy measures• Fiscal incentives, institutional changes, procedural rationalization,

enhanced market access across the world and diversification of export markets.

• Improvement in infrastructure related to exports;• Bringing down transaction costs, and providing full refund of all indirect

taxes and levies, would be the three pillars. • Goods and Services Tax rebates all indirect taxes and levies on exports.• Technological up gradation of exports is sought to• be achieved by promoting imports of capital goods for certain sectors

under EPCG at zero percent duty.• encourage production and export of ‘green products’ through scheme

and incentives for exports.

• In order to reduce the transaction cost and institutional bottlenecks, the e-trade project would be implemented in a time bound manner to bring all stake holders on a common platform.

• Additional ports/locations would be enabled on the Electronic Data Interchange over the next few years.

• An Inter-Ministerial Committee has been established to serve as a single window mechanism for resolution of trade related grievances.

• The industry and the Government, working in tandem, will be able to ensure that the Indian exports become globally competitive and that we are able to achieve the target, which we have set for ourselves.