Benefits of Foreign Trade

Topics: International trade, Export, Free trade Pages: 5 (1562 words) Published: September 5, 2010
Trade is not an end in itself, but a means to economic growth and national development. The primary purpose is not the mere earning of foreign exchange, but the stimulation of greater economic activity. For India to become a major player in world trade, an all encompassing, comprehensive view needs to be taken for the overall development of the country's foreign trade. While increase in exports is of vital importance, we have also to facilitate those imports which are required to stimulate our economy. Coherence and consistency among trade and other economic policies is important for maximizing the contribution of such policies to development. Thus, while incorporating the existing practice of enunciating an annual Foreign Trade Policy, it is necessary to go much beyond and take an integrated approach to the developmental requirements of India's foreign trade. [pic][pic][pic][pic]The Foreign Trade Policy is built around two major objectives. These are: • To double our percentage share of global merchandise trade within the next five years; and • To act as an effective instrument of economic growth by giving a thrust to employment generation.

For achieving these objectives, the following strategies need to be adopted: • 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.

• Simplification of levies and duties on inputs used in export products.

• Facilitating development of India as a global hub for manufacturing, trading and services.

• Generating additional employment opportunities, particularly in semi-urban and rural areas, and developing a series of ‘Initiatives’ for each of these sectors.

• 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.

• Neutralizing inverted duty structures and ensuring that India's domestic sectors are not disadvantaged in the

• Free Trade Agreements / Regional Trade Agreements / Preferential Trade Agreements that India enters into in order to enhance exports.

• Upgradation of infrastructural network, both physical and virtual, related to the entire Foreign Trade chain, to global standards.

• Revitalizing the Board of Trade by redefining its role, giving it due recognition and inducting foreign trade experts while drafting Trade Policy.

• Involving Indian Embassies as an important member of export strategy and linking all commercial houses at international locations through an electronic platform for real time trade intelligence, inquiry and information dissemination.

The new Exim-Policy is essentially a roadmap for the development of India's foreign trade. It contains the basic principles and points the direction in which we propose to go. By virtue of its very dynamics, a trade policy cannot be fully comprehensive in all its details. It would naturally require modification from time to time. We propose to do this through continuous updating, based on the inevitable changing dynamics of international trade. It is in partnership with business and industry that we propose to erect milestones on this roadmap. With a view to doubling our percentage share of global trade within 5 years and expanding employment opportunities, especially in semi urban and rural areas, certain special focus initiatives have been identified for the agriculture, handlooms, handicraft, gems & jewellery and leather sectors. The thrust sectors indicated below shall be extended the following facilities: AGRICULTURE

A new scheme called the Vishesh Krishi Upaj Yojana (Special Agricultural Produce Scheme) for promoting the export of fruits, vegetables, flowers, minor forest produce, and their value added products has...
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