Trade Policy of India new

8/7/2019 Trade Policy of India new

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Presented by:

Ekta Kumari

Manish Phukan

Gautom Borah

Bitu Das


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ROADMAP

Trade Strategy of India - At a glance

Period of Export Pessimism (1950s)

Era of Export promotion and Import

Restriction (1961-1991)Open Policy (post 1991)

Reform of Trade Policy

F

oreign Trade Policy (F

TP) FTP Objectives

FTP Strategy

FTP Promotional Measures


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TRADE STRATEGY OF INDIA - AT A

GLANCE

Strong inward oriented policy since 1951 to 1991

Instruments used to pursue this strategy:

Outright ban on many products Quantitative restrictions

Tariff wall (one of the highest globally)

Import licensing

Foreign exchange regulations


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TRADE STRATEGY OF INDIA - AT A

GLANCE

Result: Adverse effect on Indias export performance andeconomy as a whole

Early 1980s: India moved to export oriented strategy,

though strongly inward oriented In brief:

Period of Export Pessimism (1950s)

Era of Export promotion and Import Restriction (1961-1991)

Open Policy (post 1991)


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PERIOD OF EXPORTPESSIMISM (1950S)

Export earnings from tea, jute and cotton textiles,limits scope for substantial increase in exports

Perceptions driving the Export Pessimism:

Poor demand of traditional manufactures in theworld market

Unless industrialization developed, new

manufactures could not produce enough forexport


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PERIOD OF EXPORTPESSIMISM (1950S)

Result: Import substitution in basic, intermediateand machine building was a major element of tradepolicy

Outcome:

Neglect of export promotion

Available opportunities missed out


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ERA OF EXPORT PROMOTION AND IMPORT

RESTRICTION(1961-1991)

Started with the beginning of the 3rd Five-Year planand continued till the 8th

Characterized by import restriction and adoption of

measures for export promotion

Major development after 3rd plan, devaluation of theIndian rupee by 36.5%

Soon after, modifications, adjustments andextensions in export promotion schemes were made


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ERA OF EXPORT PROMOTION AND IMPORT

RESTRICTION(1961-1991)

Export Policy Resolution announced by Govt. of India in 1970

Resolved to:

Strengthen domestic production base

Strengthen and develop export marketing infrastructure

Develop oversea markets

Provide incentives to boost export sector

7

th

plan (1985-1990) Efforts to find sectors, industries and products having good

export potential

Fourteen broad sectors identified


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OPEN POLICY (POST1991)

Trade policy reform has been

an integral part of economic policy reformushered since July 1991


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REFORM OFTRADE POLICY

Exchange rate adjustment rupee devalued toencourage exports and discourage imports

Role of subsidiaries in export promotion wassubsequently reduced

Liberalization of imports substantiallyeliminating licensing, quantitative restrictions andother regulatory controls

Proceduralsimplification

Convertibility ofthe rupee


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FOREIGN TRADE POLICY (FTP)

Govt. of India announces five year Export-Import Policy(Exim policy)

The policy states that,

Exports and imports shall be free, except incases where they are regulated by the provisionsof this Policy or any otherlaw for the time being

in force.


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FOREIGN TRADE POLICY (FTP)

Restrictions are called when necessary for:Protection of public morals

Protection of human, animal or plant life or health

Protection of patents, trademarks and copyrights

Protection of deceptive practices

Prevention of use of prison labour

Protection of national treasures of artistic, historic or

archeological valueConservation of exhaustible natural resources

Prevention of traffic in arms, ammunitions and implementsof war


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FTP OBJECTIVES

1. To double our percentage share of the globalmerchandise trade within the next five years

2. To act as an effective instrument of economic growth bygiving a thrust to employment generation


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FTP STRATEGY

Unshackling of controls and creating an atmosphere oftrust and transparency

Simplifying procedures and bringing down transaction

costs Neutralizing levies and duties on inputs used in export

products

Facilitating India as a global hub for manufacturing,

trading and services


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FTP STRATEGY

Identifying and nurturing special focus areas, generatingadditional employment opportunities (special focus onsemi-urban & rural areas)

Facilitating technological and infrastructural upgradation of all sectors of the Indian economy

Activating our embassies as key players in our exportstrategy (real time trade intelligence and enquiry

dissemination)


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The new Policy envisages merchant exporters andmanufacturer exporters, business and industry as partners ofGovernment in the achievement of its stated objectives and

goals.

In order to obviate the need for litigation and nurture aconstructive and conducive atmosphere, a suitable Grievance

Redressal Mechanism will be established which, it is hoped,would substantially reduce litigation and further arelationship of partnership.


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SPECIAL FOCUS INITIATIVES

With a view to doubling Indias percentage share of globaltrade and expanding employment opportunities in semi-urban and rural areas. Certain special focus initiativeshave been identified for 5 sectors

agriculture,

handicrafts,

handlooms,

gems & jewellery and

leather & footwear sectors.


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FTP PROMOTIONAL MEASURES

Assistance to States for Infrastructure Development ofExports (ASIDE)

Market Access Initiative (MAI)

Market Development Assistance (MDA)

Towns of Exports Excellence (TEE)

Brand Promotion and Quality (BPQ)

Target Plus Scheme (TPS)

Duty Entitled Passbook Scheme (DEPB)

Export Promotion Capital Goods Scheme (EPCG)


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EVALUATION:

The policy has been widely hailed for its endeavour to

improve export infrastructure and export production,garnering of export surplus, removal of quantitativerestrictions on exports, attempts to reduce transaction costs,focused attention on export promotion.

The policy has been praised for going micro. For beyondsetting the impressive export target of $ 150 billion each formerchandise and services by the end of the decade, thepolicy aims to broadbase the export effort by co-opting smallexporters. By this the Govt. has recognized that an exportdrive cannot be meaningful unless the policy reaches out tothe smallest of business houses.


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THE FOREIGN TRADE (DEVELOPMENTAND

REGULATION) ACT, 1992

An Act to provide for the development and regulation

of foreign trade by facilitating imports into, and

augmenting exports from India and for matters

connected therewith or incidental thereto.


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Provisions:

Development and regulation

Prohibition and restriction Exim policy: Formulate, announce and amend

Director general of foreign trade: appointed by theCentral Government, The DGFT shall advise the

Central Government in the formulation of the exportand import policy and shall be reasonable for carryingout that policy.


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Importer-exporter code number : Granted by theDirector General or the officer authorized by theDirector General.

Issue, suspension and cancellation of license Search, inspection and seizure

Penalty for contravention : One thousand rupees orfive times the value of the goods involved, whichever

is more


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Thank You

Trade Policy of India new

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