live project on trade policy

8/9/2019 Live Project on Trade Policy

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LIVE PROJECT

TRADE POLICY OF INDIA WITH RECENT

CHANGES

SUBMITTED BY:

HARSH JAIN (5130)


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ABSTRACT

We would like to express our heartfelt thanks to many people.

This project is an effort to contribute towards achieving thedesired objectives. In doing so, we have optimized all available

resources and made use of some external resources, the

interplay of which over a period of time led to the attainment of

the set goals.

It is our heartfelt honour to thank Prof. Chakravarthy faculty

and project guide for his valuable guidance in successful

completion of this project.

We express our sincere thanks to all the people who directly or

indirectly contributed in time, energy and knowledge to this

effort.

We would like to express my sincere gratitude to Prof.

Chakravarthy for giving us the chance to explore the

underlying topic of Trade policy of India with recent changes.

I would also like to thank Mr Shubhash Kumar who has helped

me for this project without him project could not have been

accomplished.


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OBJECTIVE

To study the composition and trends of trade policy of India

with recent changes from 2009 - 2014.

INTRODUCTION

Before independence the trade policy followed by the British

proved to be disastrous for India as it destroyed the

indigenous industries in India and exports was mainly

composed of primary products.Substantial changes have

taken place in our trade policy after independence, which is

indicated by the large proportion of non-primary products in

exports. Imports Policy and Exports Policy together solve the

Balance of Payment problem.The economy of India is the

12th largest economy in the world by market exchange rates

and the 4thlargest by Purchasing Power Parity (PPP). In

1990s, following the economic reforms from aSocialist-

inspired economy, the country began to experience swift

economic growth, as marketopened for international

competition. In the 21st century, India is an emerging power

with vast human and natural resources, and huge knowledge

base. Economists predict that by 2020, India will be among

the largest economies of the world.


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India was under socialistic democratic-based policies from

1947 to 1991. The economy wascharacterized by regulations

and public ownership, leading to corruption and slow growth

rate. Since 1991 continuing economic liberalization has

moved the economy towards a market based System. Arevival of economic reforms and better economic policy in

2000s accelerated India's economic growth. In 2008 India

established itself as the world's 2nd largest growing economy.

However, year 2009 saw a significant slowdown in India's

official GDP growth rate to 6.1% as wellas the return of a

large projected fiscal deficit of 10.3% of GDP. The

international trade has been growing faster than world

output indicates that the international market is expanding

faster than the domestic markets. There are indeed many

Indian firms too whose foreign business is growing faster

than the domestic business. This is manifested/necessitated/

facilitated by the following facts:

(a) The Competitive business Environment

(b) Globalization

(c) The universal liberalization Policy.


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TRADE POLICY 2009

Foreign trade policy (2009 2014) organized by the CII, Anand

Sharma, union minister for commerce and industry, govt. ofIndia stated the new foreign trade policy 2009, attempts to

diversify Indias exports products and markets. He said, the

government has tried to use the available resources judiciously

to focus on labour-intensive sectors. These sectors would help

"create more jobs", while generating more resources in the

economy, added Mr. Sharma.

Mr. Sharma said, the Government is determined to reduce

transaction costs for Indian exporters. The current policy has

already reduced the application fees for exporters and the

government will work to simplify export policies and

procedures. Electronic trade is important and will be looked

at in a time bound manner, added Mr. Sharma.Expansion of

Market Linked Focus Products Scheme (MLFPS) to 13 new

markets and 1700 products was the highlight of the new policy,

opinioned Mr. Sharma. He also expressed hope that the new

policy will help exporters to tide over the current slowdown.


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HIGHLIGHTS OF THE NEW

FOREIGN TRADE POLICY OF INDIA

ARE AS UNDER:

26 new markets have been added under Focus MarketScheme. These include 16 new markets in Latin

America and 10 in Asia-Oceania.

The incentive available under Focus Market Scheme(FMS) has been raised from 2.5% to 3%.

The incentive available under Focus Product Scheme(FPS) has been raised from 1.25% to 2%.

Higher allocation for Market Development Assistance(MDA) and Market Access Initiative (MAI) schemes is

being provided.

(MLFPS) Market Linked Focus Product Schemebenefits also extended for export to additional new

markets for certain products. These products include

auto components, motor cars, bicycle and its parts, and

apparels among others.


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Market Linked Focus Product Scheme (MLFPS) hasbeen greatly expanded by inclusion of products

classified under as many as 153 ITC(HS) Codes at 4

digit level. Some major products include;Pharmaceuticals, Synthetic textile fabrics, value added

rubber products, value added plastic goods, textile

made ups, knitted and crocheted fabrics, glass products,

certain iron and steel products and certain articles of

aluminum among others. Benefits to these products will

be provided, if exports are made to 13 identified

markets (Algeria, Egypt, Kenya, Nigeria, South Africa,Tanzania, Brazil, Mexico, Ukraine, Vietnam,

Cambodia, Australia and New Zealand)

A large number of products from various sectors havebeen included for benefits under FPS. These include,

Engineering products (agricultural machinery, parts of

trailers, sewing machines, hand tools, garden tools ,

musical instruments, clocks and watches, railway

locomotives etc.), Plastic (value added products), Jute

and Sisal products, Technical Textiles, Green

Technology products (wind mills, wind turbines,

electric operated vehicles etc.), Project goods, vegetable

textiles and certain Electronic items.


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TECHNOLOGY UPGRADATION

To aid technological up gradation of our export sector,EPCG Scheme at Zero Duty has been introduced. This

Scheme will be available for engineering & electronic

products, basic chemicals & pharmaceuticals, apparels

& textiles, plastics, handicrafts, chemicals & alliedproducts and leather & leather products (subject to

exclusions of current beneficiaries under Technological

Up gradation Fund Schemes (TUFS), administered by

Ministry of Textiles and beneficiaries of Status Holder

Incentive Scheme in that particular year). The scheme

shall be in operation till 31.3.2011

Jaipur, Srinagar and Anantnag have been recognized asTowns of Export Excellence for handicrafts; Kanpur

Dewas and Ambur have been recognized as Towns of

Export Excellence for leather products; and

Malihabad for horticultural products.


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EPCG SCHEMES

To increase the life of existing plant and machinery,export obligation on import of spares, molds etc. under

EPCG Scheme has been reduced to 50% of the normal

specific export obligation.

Taking into account the decline in exports, the facilityof Re-fixation of Annual Average Export Obligation for

a particular financial year in which there is decline in

exports from the country, has been extended for the 5

year Policy period 2009-14.

MARINE SECTOR

Fisheries have been included in the sectors which areexempted from maintenance of average EO under

EPCG Scheme, subject to the condition that FishingTrawlers, boats, ships and other similar items shall not

be allowed to be imported under this provision. This

would provide a fillip to the marine sector which has

been affected by the present downturn in exports.


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Additional flexibility under Target Plus Scheme (TPS)/Duty Free Certificate of Entitlement (DFCE) Scheme

for Status Holders has been given to Marine sector.

GEMS AND JEWELRY SECTOR

To neutralize duty incidence on gold Jewelry exports, ithas now been decided to allow Duty Drawback on suchexports.

A new facility to allow import on consignment basis ofcut & polished diamonds for the purpose of

grading/certification purposes has been introduced.

To promote export of Gems &Jewelry products, thevalue limits of personal carriage have been increasedfrom US$ 2 million to US$ 5 million in case of

participation in overseas exhibitions. The limit in case

of personal carriage, as samples, for export promotion

tours, has also been increased from US$ 0.1 million to

US$ 1 million.


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LEATHER SECTOR

Leather sector shall be allowed re-export of unsoldimported raw hides and skins and semi-finished leather

from public bonded ware houses, subject to payment of

50% of the applicable export duty.

Enhancement of FPS rate to 2% would alsosignificantly benefit the leather sector.

STABILITY AND CONTINUITY OF

FOREIGN TRADE POLICY

To impart stability to the Policy regime, DutyEntitlement Passbook (DEPB) Scheme is extended

beyond 31-12-2009 till 31.12.2010.

Income Tax exemption to 100% EOUs and to STPIunits under Section 10B and 10A of Income Tax Act has

been extended for the financial year 2010-11 in theBudget 2009-10.


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The adjustment assistance scheme initiated inDecember, 2008 to provide enhanced ECGC cover at

95%, to the adversely affected sectors, is continued till

March, 2010.

INDIA UNVEILS FOREIGN TRADE

POLICY FOR NEXT 5 YEARS

Union Commerce and Industry Minister AnandSharma said capital goods will attract zero duty till Mar

2011 to encourage manufacturing.

Sharma said the immediate goal was to arrest decline inexports and to achieve 200 billion dollar export target

by 2011.

He envisaged 15 percent growth for first two years andthen 25 percent for the next three years.

He also said that with this India would be able to double its

exports by 2014. He also set the target of doubling India's share

in global trade by 2020.


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CONCLUSION

In this live project of macroeconomics we find that there are

some recent changes have been done in various sectors and it is

in the process also because the trade policy period is about 5

years from 2009-2014. So, we havent got a data analysis on

that project, but we get some information and by thisinformation we put some data on various sectors.


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DECLARATION

We hereby declare that the report on Trade policy of India

with recent changes is written under the guidance of Prof.

Chakravarthy. The empirical conclusion and finding in the

report are based on the data collected by us and entire report is

not a reproduction of any other resources.


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BIBLIOGRAPHY

www.business.gov.in

www.wikipedia.org

www.commerce.nic.in

live project on trade policy

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