bop and exim policy

TRINITY INSTITUTE OF PROFESSIONAL STUDIES Sector – 9, Dwarka Institutional Area, New Delhi-75

Affiliated Institution of G.G.S.IP.U, Delhi

B.Com (H), Indian Economy, 888301

BOP and EXIM PolicyDr Vandana Malviya

TRINITY INSTITUTE OF PROFESSIONAL STUDIESSector – 9, Dwarka Institutional Area, New Delhi-75

Measures to correct deficit BOT

• Export promotion:– Export-Import bank was set up in 1982 to promote exports;– Devaluation of currency was taken up in 1991 to promote exports;– Cash assistance was given to exporters to compensate them for

custom duties;– Income tax concessions were given to exporters;– Advanced licences are given to exporters for duty free import of

goods used in production of export items;– Export procedures and formations have been simplified


Measures to manage unfavourable BOP

• Import reduction and substitution: reduce import of goods that can be manufactured in house and to invest in industries that produce similar goods;

• Objectives of import substitution are to reduce import bills and to raise demand for domestic produced goods;

• Achievements of policy of import substitution are that India started producing goods like ACs, TVs, electronic appliances and also India has developed heavy and capital goods industries.



• Export promotion:– Cash assistance to exporters for import of inputs to be used for

export goods;– Concession in income tax for income from export;– Concessional bank credit for financing production of goods for

export;– Concession in import of materials and machinery used for producing

export goods.



• Encouraging FDI;• Tapping invisibles by providing services like shipping, insurance

and banking;• Increasing efficiency;• Encouraging tourist traffic;• Bilateral agreements.


Export-Import (EXIM) Policy 2002-07

• Objectives:– Double India’s share in world trade during 2002-07;– Exports to be increased at an annual rate of 12.4%;– Liberal imports of raw materials and capital goods to stimulate

economic growth;– Import of technology to improve technology in the country;– Simplification of export procedures;– Business centres to be set up to help Indian exporters in foreign

countries


Exports of Agricultural items

• All quantitative restrictions prevailing on agricultural products have been removed;

• Transport subsidy is given to increase export of fruits, vegetables, flowers and dairy products;

• Transport assistance to be given for export of food grains;• Restrictions on the packaging of agricultural exports have been

removed.


Exports of Micro Sector (Cottage & Handicrafts)• Industries of this sector contribute about ¼ to India’s exports;• GOI as earmarked a fund of 5 crore under Market Access Initiative (MAI) under which

government agencies will make efforts to find new markets for products of small, cottage and handicraft industries;

• By utilizing funds of MAI, MICRO industries may develop their own web-sites for providing information about their products;

• Some industrial centres like Ludhiana, Panipat and Triupur have been acclaimed as centres of export excellence, more such areas will be developed;

• Technology support will be provided to MICRO industries to raise their level of technology;

• These units will be made strong enough to provide jobs to 80% artisans in rural areas.


Steps to help various industries

• To promote textile industry;• Diamonds and gems studded jewellery;• Promote information technology (software industry);• Production units promoting hardware technology.


Growth oriented Export Import Policy

• Diversification of markets for Indian goods: explore more markets in developing countries of Asia and Africa like Nigeria, South Africa, Mauritius, Kenya, Ethiopia, Tanzania, etc ;

• Simplification of procedure related to Exim;• Exporting unit permitted to negotiate directly;


• Exemption of import duty;• Setting up special economic zone to promote export: 17

SEZs are there in India.


Merits of EXIM Policy

• Comprehensive: (agriculture, Small, cottage, handicrafts);• Encouragement to small, cottage and handicraft industry;• Growth oriented;• Incentive for agricultural export;• Setting up of agri-export zones: GOI sanctioned 32 zones;• Exports to new markets to go up;• Encouragement for hardware industry;• Boost jewellery industry;• Boost industrial growth.

bop and exim policy

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