IMPORT - EXPORT POLICY OF INDIA(EXIM POLICY)

BY – SANDIP BESRA

WHY DO WE NEED IMPORT/EXPORT

Import/Export means trade across the political boundaries of different nation. No Nation is self sufficient and had all the goods that it needs. This happens because of climatic variation & unequal distribution of natural resources. In India, Govt. has come out from time to time with various policies on foreign trade to promote export thereby increasing the “Foreign Exchange Reserve”.

These policies are termed as “Exim Policy”

. Import export act was introduced by Gov. during second world war and it lasted for around 45 yrs. and in June 1992 this act was superseded by the Foreign Trade (Development & Regulation Act), 1992. . The basic objective of this new act was to give effect to the new liberalized export and import policy of the Govt.

Till 1985 annual policies were made but from 1985-92, three yrs. policy was made and then,

5 yrs. policy was made coinciding with 5 yrs. plans 1992-97, 1997-02, 2002-07.

Brief History

WHAT IS EXIM POLICY?

It contains policies in the sphere of Foreign trade i.e. with respect to import & export from the country and more especially export promotion measures, policies and procedure related there to.

Export means selling abroad and import as bringing into India, any goods and services

OBJECTIVE OF EXIM POLICY

Accelerating the country’s transition to a globally oriented vibrant economy with a view to derive maximum benefits from expanding global market opportunities;

Stimulating sustained economic growth

Enhancing the technological strength and efficiency

To generate employment.

Opportunities and encourage the attainment of internationally accepted standards of quality.

Providing consumers with good quality products and services at reasonable prices.

TRADE POLICY EVOLUTION Phase I – Import Restriction and Import Substitution (From 143 1950’s to 1970s),

Phase II – Export Promotion & Import Liberalisation (From 1970s to 1990s), and

Phase III – Outward Orientation – (From 1990 onwards).

THE FOREIGN TRADE POLICY 2015-2020 On 1st April 2015, the new Foreign Trade Policy (FTP) for the period 2015-20 was announced which replaces the 2009-14 FTP which expired on 31st March 2014.

India's Foreign Trade Policy also known as Export Import Policy (EXIM) in general, aims at developing export potential, improving export performance, encouraging foreign trade and creating favorable balance of payments position. Foreign Trade Policy is prepared and announced by the Central Government (Ministry of Commerce). Foreign Trade Policy or EXIM Policy is a set of guidelines and instructions established by the DGFT (Directorate General of Foreign Trade) in matters related to the import and export of goods in India.

HIGHLIGHTS OF THE PRESENT  FOREIGN TRADE POLICY 2015-2020 India to be made a significant participant in world trade by 2020 Commerce Minister announced two new schemes in Foreign Trade Policy 2015-2020 MEIS & SEIS. namely "Merchandise Exports from India Scheme (MEIS)" and "Services Exports from India Scheme (SEIS)". These schemes (MEIS and SEIS) replace multiple schemes earlier in place. Merchandize exports from India (MEIS) to promote specific services for specific Markets Foreign Trade Policy For services, all schemes have been replaced by a 'Services Export from India Scheme'(SEIS), which will benefit all services exporters in India. FTP would reduce export obligations by 25% and give boost to domestic manufacturing Incentives (MEIS & SEIS) to be available for SEZs also. FTP benefits from both MEIS & SEIS will be extended to units located in

e-Commerce of handicrafts, handlooms, books etc., eligible for benefits of MEIS. e-Commerce exports up to Rs.25000 per consignment will get SFIS benefits. e-Commerce Exports Eligible For Services Exports From India Scheme. – As part of Digital India vision, mobile apps would be created to ease filing of taxes and stamp duty, automatic money transfer using Internet Banking have been proposed. Agricultural and village industry products to be supported across the globe at rates of 3% and 5% under MEIS. Higher level of support to be provided to processed and packaged agricultural and food items under MEIS. Industrial products to be supported in major markets at rates ranging from 2% to 3%. Branding campaigns planned to promote exports in sectors where India has traditional Strength.Business services, hotel and restaurants to get rewards scrip under SEIS at 3% and other specified services at 5%.

Duty credit scrips to be freely transferable and usable for payment of customs duty, excise duty and service tax. Debits against scrips would be eligible for CENVAT credit or drawback also. Manufacturers who are also status holders will be enabled to self-certify their manufactured goods as originating from India. – Tax and duty on Indian manufacturers have been reduced, to boost Make in India vision Reduced Export Obligation (EO) (75%) for domestic procurement under EPCG scheme. Inter-ministerial consultations to be held online for issue of various licences. No need to repeatedly submit physical copies of documents available on Exporter Importer Profile

BALANCE OF TRADE OF INDIA

Year Exports Imports Trade Balance(Billion Rupee)

2013-14   19050.11 27154.34 -8104.23

2012-13   16343.19 26691.62 -10348.43

2011-12   14659.59 23454.63 -8795.04

2010-11   11429.22 16834.67 -5405.45

2009-10   8455.34 13637.36 -5182.02

2008-09   8407.55 13744.36 -5336.8

2007-08   6558.64 10123.12 -3564.48

2006-07   5717.79 8405.06 -2687.27

2005-06   4564.18 6604.09 -2039.91

2004-05   3753.4 5010.65 -1257.25

2003-04   2933.67 3591.08 -657.41

2002-03   2551.37 2972.06 -420.69

2001-02   2090.18 2452 -361.82

FOREIGN TRADE AS AN ENGINE OF GROWTH1. SME SECTOR India has nearly three million SMEs, which account for almost 50 percent of industrial output and 42 percent of India’s total exports. However, as a result of globalization and liberalization, coupled with WTO regime, SMEs have been passing through a transitional period. Foreign trade will help the SME sector greatly. Because of Foreign trade they can find new customers around the world. Through foreign trade the sector will be more exposed to new technologies and innovations which can be implemented here. Foreign trade also increases competition. With rise in competition the companies will innovate more to remain competitive thus forms superior products and services.

2. GDP GROWTH Merchandise trade as a share of GDP is the sum of merchandise exports and imports divided by the value of GDP, all in current U.S. dollars. The below given is in percentages.

From 1995 to 2014 the percentage contribution is showing an increasing trend. Close to half of the GDP is contributed by foreign trade, if we consider the time period of 2010 – 2014. This shows the importance of foreign trade for our country.

  1995-1999 2000-2004 2005-2009 2010-2014

INDIA 33.7 40.8 42.3 41.5

3. EMPLOYMENT As foreign trade increases the number of jobs also increases automatically. Foreign trade influences employment directly as well as indirectly. When exports increases the production also increases. As production increases more people are employed to do the work. But import adversely affects the employment within the country. Because as more and more goods are imported the production within the country decreases. So the number of employment also decreases.

THANK YOU!