import export strategies of india
TRANSCRIPT
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IMPORT EXPORT STRATEGIES OF
INDIA
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FLOW OF THE PRESENTATION
Overview of the Foreign Trade Policy
Policy Framework evolution of the policy pre and post 1985
Current Foreign Trade Policy (2009-2014)
Structural and strategic changes in Indias foreign trade due to
the EXIM policies
Current strategies adopted by the government
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FOREIGN TRADE POLICY - OVERVIEW
FOREIGN TRADE POLICY or EXIM POLICY is a set of
guidelines and instructions and various policy decision
taken by the government in the sphere of foreign trade i.e.
with respect to import and export of the country.
It is prepared and announced by the Ministry of Commerce.
Initially it was introduced for the period of three years.
After 1992, it is being made for 5 years.
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POLICY FRAMEWORK
The Foreign Trade Policy can be divided into two parts:
1. Trade policy before the adoption of EXIM policy in
1985.
2. since adoption of EXIM policy in 1985.
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TRADE POLICY BEFORE 1985
First phase(1951-52)
Restrictive import policy
Encourage cash flow of paper notes(income earned through exports)
Less production, shortage of certain goods, restriction for export.
Second phase(1951-53 to 1956-57)
Liberalisation measures were taken in respect of import-export-
To build foreign reserve and make a mark in foreign market
To fulfil the requirements of capital goods
Increased import led to a negative balance in foreign reserve
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TRADE POLICY BEFORE 1985
Third phase(1956-57 to 1966)
To decrease foreign debt and to build up the foreign reserves
Fourth phase(June 1966 to 1975-76)
Devaluation of the rupee that boosted export and increase competitiveness.
Fifth phase (after 1975-76)
Adopted the policy of import liberalisation to encourage export promotion.
New technology, raw materials of better quality and those which were not
available within the country were imported.
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EXIM Policy, 1985
EXIM Policy Committee appointed in 1962. Mr. V. P. Singh announced the EXIM
Policy on the 12th of April, 1985 for a 3 year period.
Objectives:
To boost theexport business in India.
To remove uncertainty so that industries could frame long term goals.
Major Implications:
201 items of industrial machinery were placed on OGL (Open General License).
Import export pass book scheme was introduced
Import of 67 items of raw materials & components was transferred to limited
permissible list
TRADE POLICY AFTER 1985
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EXIM policy ,1990
Announced on April 30, 1990 a new export import policy for a 3 year period.
Objectives:
To encourage rapid and sustained growth in export.
To streamline the procedures of import licensing and export promotion.
To support research institution for building up scientific & technological capability.
Major Implications:
Import of certain raw materials have been canalized.
Automatic licensing upto 10% of the value of pre-imports introduced.
Withdrawing the scheme of import-export pass book.
Scheme of Star Trading House was introduced for exported with average annual of net
foreign exchange earning of Rs. 75 crore in the preceeding three licensing period of the
base period.
TRADE POLICY AFTER 1985
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TRADE POLICY AFTER 1985
EXIM Policy 1992 -1997
In order to liberalize imports and boost exports, the Government of India
introduced the Indian EXIM Policy on April 1, 1992 for a period of 5 years.
Major Implications:
The duty-free Export Promotion Capital Goods (EPCG) scheme was
introduced.
Export processing zones (EPZ) and 100 % export oriented units
(EOUs) were granted several concession.
The scheme of cash compensatory support (CCS) was abolished.
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EXIM Policy 1997 -2002
Objectives:
To accelerate the economy from low level to high level of economic activities.
To improve technological strength and efficiency of Indian business sectors.
To create new employment.
To give quality consumer products at practical prices.
Major Implications:
Imports Liberalization
Export Promotion Capital Goods (EPCG) Scheme
Duty Entitlement Pass Book (DEPB) Scheme
It encourage foreign investment in India.
Fulfilled one of the Indias long terms objective of Self-reliance.
TRADE POLICY AFTER 1985
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TRADE POLICY AFTER 1985EXIM Policy 2002 2007
Objectives:
To facilitate sustained growth in exports to attain a share of atleast 1% of global
merchandise trade.
Major Implication:
The contribution of agriculture and allied sector increased to exports.
EXIM Policy 2004 2009 Objectives:-
To double Indias share of global merchandise trade from 0.7% to 1.5%.
To give a thrust to employment generation in semi-urban or rural areas.
Major Implications:
Target plus scheme acted as an incentive to exporter.
All goods and services were exempted from service tax.
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Objectives:
To achieve an annual growth rate of 15% with a target of $200mn
by 2011.
To come back to a growth rate of 25% pa by 2014.
To double export of goods and services by 2014
To double Indias share in global trade by 2020.
To promote Brand India through 6 or more Made in India shows
To accelerate growth in the export of services
CURRENT POLICY (2009 2014)
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Measures of Export Promotion:
DEPB: Duty Entitlement Passbook (DEPB) Scheme
MDAS: The Marketing Development Assistance Scheme
MAS: The Market Access Initiative (MAI) Scheme
VKGUY: Vishesh Krishi Upaj Yojana Scheme
Zero Duty EPCG Scheme
2% Interest Subvention Scheme
Reward-Incentive Schemes
CURRENT POLICY (2009 2014)
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ANNUAL SUPPLEMENT OF FTP 2009 - 14
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1950s
balance of payments crunch.
The crucial problem of foreign exchange shortage.
A progressive tightening up of import policy took place in 1957.
1960-61
Government and private imports increased.
Government set up 12 Export Promotion Councils.
STRUCTURAL CHANGES IN INDIA'S FOREIGN TRADE
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1964-65
Balance of payments once again under pressure
The devaluation of Rupee in the face of financial crisis in June 1966.
Late 1970s and early 1980s
The trade regime was based on a complex system of licensing.
Indias trade policy heavily relied on quotas rather than on tariffs
There was a slow and sustained relaxation of import controls with the
export-import Policy of 1977-78.
STRUCTURAL CHANGES IN INDIA'S FOREIGN TRADE
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Reforms post 1991
Main areas were tariffs, exchange rates, non-tariff barriers and
capital flows.
The tariff protection reduced, relaxed and simplified the restrictive
import licensing regime.
Import licensing on all intermediate inputs and capital goods were
abolished.
STRUCTURAL CHANGES IN INDIA'S FOREIGN TRADE
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Reforms post 1991
Internal reforms included reduced control over locational restrictions
and industrial licensing.
The policy focus was on liberalization of capital goods and inputs for
industry, to encourage domestic and export-oriented growth.
The major task set for 1990s and beyond has been to lower tariff rates
and lifting of foreign exchange control.
STRUCTURAL CHANGES IN INDIA'S FOREIGN TRADE
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Reforms post 1991
In February 1992, a dual exchange rate system was introduced.
From February 1994, many current account transactions were
permitted at the market exchange rate.
Rupee was officially convertible on current account.
Restrictions on FDI and portfolio investment were eased.
Measures were taken to relax control over foreign trade. Private sector was encouraged to enter into foreign market.
STRUCTURAL CHANGES IN INDIA'S FOREIGN TRADE
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Trade initiative has moved towards the Special Economic Zones (SEZ)
to enable exporters to avoid bureaucratic red tape governing
transactions and the restrictive labour laws.
With respect to trade policy, India has been a proponent ofmultilateralism. However, in recent years, it has entered into bilateral
and regional negotiations.
There has been opening up of the service sector to private
participation, both domestic and foreign.
Many services have been placed on automatic approval route for FDI.
STRUCTURAL CHANGES IN INDIA'S FOREIGN TRADE
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RECENT MEASURES BY GOVERNMENT The key strategies outlined to achieve the recent foreign trade policy
modifications are:
1. Unshackling of controls and creating an environment of trust and
transparency to unleash the capabilities of enterprises;
2. Neutralizing incidence of all levies and duties on inputs used in
export of products;
3. Nurturing special focus areas which will generate additional
employment opportunities, especially in semi-urban and rural areas
4. Simplifying the procedures and bringing down transaction costs;
5. Facilitating technological and infrastructure up gradation of all
sectors.
6. Emphasis on focused market and productscheme.
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PRESENTED BY -
Anand Tiwari 03
Bhumi Shah 07
Geeta Honrao 10 Siddhartha Shetty 27
THANK YOU