India and Foreign Trade-
The trade activity with other countries on globe is known as Foreign Trade. It is directly related to export-import of a country with other countries. The foreign trade of India was very well developed during ancient history. The orientation of foreign trade of India totally changed with advent of British Empire in India. Immediately after independence GOI adopted inward looking foreign trade policy to restrict global trade but picture has been changed with new economic policy of the country which emphasized on globalization. In 1950, the Indian Share in total world trade was just 1.78% which further decreased to 0.6% in 1995. The foreign trade of India is going upwards and it is expected to be 2% of total world trade by 2009 [As per figure released by WTO]. These figures clearly shows that India has failed to increase its share in the total world trade
Foreign Trade of India-
India is a founding-member of General Agreement on Tariffs and Trade (GATT) since 1947 and its successor, the WTO. While participating actively in its general council meetings, India has been crucial in voicing the concerns of the developing world. For instance, India has continued its opposition to the inclusion of such matters as labor and environment issues and other non-tariff barriers into the WTO policies. Since liberalization India opened almost all sectors for FDI [Foreign Direct Investment] and continuously signing pact with international economic organizations like ASEAN and APEC to harness international trade potential. USA is top trade partner of India followed by China. These days India is considered as one of the hottest destination for FDI. Recently Ministry of Commerce and Trade came up with new Foreign Trade Policy to boost its share in total world trade
Indian Foreign Trade Policy 2009-2014
What is Foreign Trade Policy?
The Union Commerce Ministry, Government of India announces the integrated Foreign Trade Policy FTP in every five year. This is also called EXIM [Export, import] policy. This policy is updated every year with some modifications and new schemes. New schemes come into effect on the first day of financial year i.e. April 1, every year. The Foreign trade Policy which was announced on Thursday August 28, 2009 is an integrated policy for the period 2009-14.
Objectives of Foreign Trade Policy 2009-14
1. To arrest and reverse declining trend of exports due to global recession is the main aim of the policy. This aim will be reviewed after two years. 2. To double India’s exports of goods and services by 2014. 3. To double India’s share in global merchandise trade by 2020 as a long term aim of this policy. India’s share in Global merchandise exports was 1.45% in 2008. 4. Simplification of the application procedure for availing various benefits 5. To set in motion the strategies and policy measures which catalyze the growth of exports 6. To encourage exports through a “mix of measures including fiscal incentives, institutional changes, procedural rationalisation and efforts for enhance market access across the world and diversification of export markets. Aim in General: The policy aims at developing export potential, improving export performance, boosting foreign trade and earning valuable foreign exchange. FTP assumes great significance this year as India’s exports have been battered by the global recession. A fall in exports has led to the closure of several small- and medium-scale export-oriented units, resulting in large-scale unemployment.
1. Export Target : $ 200 Billion for 2010-11
2. Export Growth Target: 15 % for next two year and 25 % thereafter. EPCG [Export Promotion Capital Goods Scheme] Scheme:
1. Obligation under EPCG scheme relaxed.
2. To aid technological Upgrdation of export sector, EPCG Scheme at Zero Duty has been introduced. 3. Export obligation on import of spares, moulds etc. under EPCG Scheme has been reduced by 50%....
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