To become a major player in world trade, a comprehensive approach needs to be taken through the Foreign Trade Policy of India. Increment of exports is of utmost importance, India will have to facilitate imports which are required for the growth Indian economy. Rationality and consistency among trade and other economic policies is important for maximizing the contribution of such policies to development. Thus, while incorporating the new Foreign Trade Policy of India, the past policies should also be integrated to allow developmental scope of India’s foreign trade. This is the main mantra of the Foreign Trade Policy of India.
Objectives of foreign trade policy of India
Trade propels economic growth and national development. The primary purpose is not the mere earning of foreign exchange, but the stimulation of greater economic activity. The Foreign Trade Policy of India is based on two major objectives, they are - 1. To double the percentage share of global merchandise trade within the next five years. 2. To act as an effective instrument of economic growth by giving a thrust to employment generation.
Strategy of Foreign Trade Policy of India
1. Removing government controls and creating an atmosphere of trust and transparency to promote entrepreneurship, industrialization and trades. 2. Simplification of commercial and legal procedures and bringing down transaction costs. 3. Simplification of levies and duties on inputs used in export products. 4. Facilitating development of India as a global hub for manufacturing, trading and services. 5. Generating additional employment opportunities, particularly in semi-urban and rural areas, and developing a series of ‘Initiatives’ for each of these sectors. 6. Facilitating technological and infrastructural up gradation of all the sectors of the Indian economy, especially through imports and thereby increasing value addition and productivity, while attaining global standards of quality. 7. 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. 8. Up gradation of infrastructural network, both physical and virtual, related to the entire Foreign Trade chain, to global standards. 9. Revitalizing the Board of Trade by redefining its role, giving it due recognition and inducting foreign trade experts while drafting Trade Policy.
This Foreign Trade Policy of India is a stepping stone for the development of India’s foreign trade. It contains the basic principles and points the direction in which it propose to go. A trade policy cannot be fully comprehensive in all its details it would naturally require modification from time to time with changing dynamics of international trade.
Certain Facts & achievements from previous policies:
1. In 2004 our exports stood at a little over US $ 63 billion. In 2007-08, they have exceeded US $ 155 billion; our exports are not just double what they were 4 years ago, but 2½ times that. 2. We have managed an average cumulative annual growth rate (CAGR) of 23%, year on year, way ahead of the average growth rate of international trade. 3. Our total merchandise trade – exports and imports together – will be almost US $ 400 billion this past year, accounting for 1.2% of world trade. 4. If the trade in services is added to this, our commercial engagement with the world would be in the region of US $ 525 billion. 5. We have delivered on our second objective as well: that of fashioning trade into an instrument of economic growth and employment generation. 6. Our total trade in goods and services is now equivalent to almost 50% of our GDP. This is unprecedented in India’s modern economic history. 7. On the issue of employment, it is our estimate that during the last 4 years...