FOREIGN TRADE POLICY OF INDIA

Presented By : Yogesh Verma Roll No.6414

Introduction

Trade is not an end in itself, but a means to economic growth and national development. The primary purpose is not the mere earning of foreign exchange, but the stimulation of greater economic activity.

Foreign Trade

As its name implies, foreign trade is the exchange of products, services, and money across national borders; essentially trade between countries. When consumers in the U.S. purchase Swiss-made watches, Chinese-made toys and electronics, and Japanese-manufactured automobiles, they experience the end result of international trade.

NEED OF Foreign TRADE

To import the goods that are not produced domestically

To export the goods that are produced over and above the domestic requirements

To encourage foreign direct investment to build the resource gap

Foreign Trade Policy Announced On 28th August 2009

The Union Commerce Ministry, Govt. Of India Announces The F.T.P. In Every Five Year.This Is Also Called EXIM Policy.This Policy Is Updated Every Year.The Foreign Trade Policy Which Was Announced On 28th August 2009 Is An Integrated Policy For The Period 2009-14.

What Is Foreign Trade Policy

Trade policy is a collection of rules and regulations which pertain to trade. Every nation has some form of trade policy which they think would be most appropriate for their country. The purpose of trade policy is to help a nation's international trade run more smoothly, by setting clear standards and goals which can be understood by potential trading countries.

CHALLENGES AND ISSUES

Burden of export promotion schemes. Risk of importing outdated machinery.  Policy fails to take a holistic view of trade issues.  Relative industry of the home market.  The nature or the degree of State intervention. Recessionary conditions in the global market.

Need Of Foreign Trade Policy

There are a number of issues with imports and exports that must be taken into consideration when conducting foreign trade. For example, some countries have industries they may want to protect. These industries may be in competition with foreign companies for the opportunity to sell products domestically. To protect domestic trade, countries may institute tariffs, which are taxes on certain foreign goods.

Objectives

To double India’s Exports Of Goods & Services By 2014.

To Encourage Exports Through a Mix Of Measures Including Fiscal Incentives And Efforts For Enhance Market Access Across The World And Diversifications Of Export Markets.

Targets

Export Target: $ 200 Billion For 2010-11

Export Growth Target: 15% For Next Two Years And 25% Thereafter.

ACHIEVEMENTS OF FOREIGN TRADE POLICY (2004-09)

Looking back, we can say with satisfaction that the UPA Government has delivered on its promise.

In the last five years ; our exports witnessed robust growth to reach a

level of US$ 168 billion in 2008-09 from US $ 63 billion in 2003-04.

Our share of global merchandise trade was 0.83% in 2003; it rose to 1.45% in 2008 as per WTO estimates.

On the employment front, studies have suggested that nearly 14 million jobs as a result of augmented exports in the last five years.

FTP (2009 – 2014)

The short term objective of current FTP is : To arrest and reverse the declining trend of exports and

to provide additional support especially to those sectors which have been hit badly by recession.

In the remaining three years of this FTP i.e. upto 2014, the country should be able to come back on the high export growth path of around 25% p.a.

By 2014, the govt. expects to double India’s exports.

SPECIAL FOCUS INITIATIVES

With a view to continuously increasing our percentage share of global trade and expanding employment opportunities special focus initiatives have been identified. Government of India shall make concerted efforts to promote exports in these sectors. These sectors are agriculture, handlooms, handicraft, gems & jewellery,leather sectors, etc.

EPCG Scheme

EXPORT PROMOTION OF CAPITAL GOODS

To Aid Technological Upgradation Of Export Sector, EPCG Scheme At Zero Duty Has Been Introduced.

Export Obligation On Import Of Spares,Moulds etc.Under EPCG Scheme Has Been Reduced By 50%

Jaipur, Srinagar and Anantnagar have been recognized as' Towns of Export Excellence’ for handicrafts; Kanpur,Dewas and Ambur for leather products; and Malihabad for horticultural products.

Market Diversification

In this policy, focus is on diversification of Indian exports to other markets, specially those located in Latin America, Africa, parts of Asia and Oceania etc.

26 new countries have been included under Focus Market Scheme.

Technological Upgradation

Such initiatives include :

EPCG Scheme at zero duty has been introduced for certain engineering, electronic products, plastics, handicrafts, etc.

A number of products including

automobiles have been included for incentives under Focus Product Scheme.

(3) Agriculture and Village Industry

A new scheme called the Vishesh Krishi Upaj Yojana (Special Agricultural Produce Scheme) for promoting the export of fruits, vegetables, flowers, minor forest produce, and their value added products has been introduced.

(4) Gems and Jewellery

Duty Drawback Is Allowed On Gold Jewellery.

Introduction Of New Facility To Allow Import On Consignment Basis Of Cut & Polished Diamonds For The Purpose Of Grading, Certifications.

In an attempt to make India a diamond international trading hub, it is planned to establish “Diamond Bourse(s)”. (A wholesale polished diamond exchange where trade merchants meet to transact business. Diamond bourses are held in major diamond cutting centers ).

(5) Green Products and Technologies

India aims to become a hub for production and export of green products and technologies. To achieve this objective, special initiative will be taken to promote development and manufacture of such products and technologies for exports. To begin with, focus would be on items relating to transportation, solar and wind power generation and other products.

RECOMMENDATIONS

More and more establishment of SEZ. Labour laws can be relaxed resulting in more

and more establishment of industries Promotion of investment from domestic and

foreign resources Convenient trade practices Establishment of infrastructure

Conclusion International Business plays a crucial role in

the economic development of a nation as it leads to industrialization, employment and reduction of scarcity of consumer goods. Our share of world trade has significantly increased over the years. At present, International Business opportunity in India exists in areas like IT, Telecom, R&D, Infrastructure, Retailing, etc. Sectors like health, education, housing, water resources, SMEs are untapped and offer huge scope.

Refrences

Wisegeek.com Locateindia.com Slideworld.com Commerce.nic.in

Any Query