FOREIGN TRADE POLICY OF INDIA
To become a major player in world trade, a
comprehensive approach needs to be taken through the Foreign Trade Policy of
India. Thus, while incorporating the new Foreign Trade Policy of India, the
past policies should also be integrated to allow developmental scope of India’s
foreign trade. This is the main mantra of the Foreign Trade Policy of India.
OBJECTIVES
The policy sets out the core objectives, identifies key strategies, spells out focus initiatives, outlines export incentives, and also addresses issues concerning institutional support including simplification of procedures relating to export activities.
To double the percentage share of global merchandise trade within the next five years.
To act as an effective instrument of economic growth by giving a thrust to employment generation.
STRATEGY
Removing government controls and creating an atmosphere of trust and transparency to promote entrepreneurship, industrialization and trades.
Simplification of commercial and legal procedures and bringing down transaction costs.
Facilitating development of India as a global hub for manufacturing, trading and services.
Facilitating technological and infrastructural upgradation of all the sectors of the Indian economy, especially through imports and thereby increasing value addition and productivity, while attaining global standards of quality.
Generating additional employment opportunities, particularly in semi-urban and rural areas, and developing a series of ‘Initiatives’ for each of these sectors
Free Trade Agreements / Regional Trade Agreements / Preferential Trade Agreements that India enters into in order to enhance exports
FOREIGN TRADE DEVELOPMENT & REGULATION ACT-1992
The Act provides 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.
As per the provisions of the Act, the Govt:
- may make provisions for facilitating and controlling foreign trade.
- may make provisions for facilitating and controlling foreign trade.
- may make provisions for facilitating and controlling foreign trade.
- may make provisions for facilitating and controlling foreign trade.
HIGHLIGHTS OF FOREIGN TRADE POLICY 2009-14
- Higher Support for Market and Product Diversification
- Technological Upgradation
- Simplification of Procedures
- Reduction of Transaction Costs
- Thrust to ValueAdded Manufacturing
- Status Holders
Under the present Foreign Trade Policy, Government recognizes exporters based on their export performance and they are called ‘status holders’. For technological upgradation of the export sector, these status holders will be permitted to import capital goods duty free of specified product groups. This will help them to upgrade their technology and reduce cost of production. For upgradation of export sector infrastructure, ‘Towns of Export Excellence’ and units located therein would be granted additional focused support and incentives.
REASONS FOR TRADE POLICY REQUIREMENT
- To have favorable balance of payments and increase in foreign exchange reserves.
- To protect domestic industries from the competition from rest of the world
- To encourage import substitution .
- The encourage exports and for export promotion.
- To keep foreign exchange reserves up to a reasonable extent.
- To develop economy of India.
THRUST SECTORS
- Agricultural
- Handicrafts
- Handlooms
- Gems and Jewellery
- Leather
- Textile