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P R E S E N T E D B Y,

S WA P N I L G U P TA ( 4 0 4 )S AT YA J I T R A J A K ( 3 9 9 )

S A N D I PA N S A M A D D A R ( 3 9 8 )

Indian Foreign TradePolicy

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What is Foreign Trade Policy

Foreign Trade Policies are Government actions,

especially tariffs, import quotas, and exportsubsidies, designed to increase net exports bypromoting exports or restricting imports

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Advent of Foreign Trade Policy in India

In the year 1962, the Government of India appointed a specialExim Policy Committee to review the previous export import policies

Mr. V. P. Singh, the then Commerce Minister and announced the Exim

Policy on the 12th of April, 1985

Initially the EXIM Policy was introduced for the period of 3 years

After liberalization in 1991, tenure of policy was changed to 5 years

In 2004, EXIM policy was replaced by Foreign Trade Act Policy of2004

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Objectives of EXIM Policy

To accelerate the economy from low level of economic activities to highlevel of economic activities

To stimulate sustained economic growth by providing access to

essential raw materials

To enhance the techno local strength and efficiency of Indianagriculture, industry and services

To generate new employment

To provide quality consumer products at reasonable prices.

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Governing Body of EXIM Policy

Foreign Trade (Development and Regulation Act), 1992

Union Minister of Commerce and Industry

Ministry of Finance (Directorate General of Foreign Trade)

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EXIM Policy 1992-1997

Introduced on April I, 1992

To liberalize imports and boost export

Duration 5 years

Amendments could be made by Central Government

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EXIM Policy 1997-2002

Simplified the procedures between exporters and the DGFT

Liberalization

Imports Liberalization

Export Promotion Capital Goods (EPCG) Scheme

Advance License Scheme

Duty Entitlement Pass Book (DEPB) Scheme

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EXIM Policy 2002 2007

Export and import of merchandise and services

To encourage economic growth by providing supply of essential rawmaterials, intermediates & services required for augmenting production

To improve the technological strength and efficiency of Indianagriculture, industry and services

To provide consumers with good quality products and services atinternationally competitive prices

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Indian Foreign Trade Policy (2004-2009)

The first Foreign Trade Policy was formed in 2004 for a period of 5 years

Two major objectives :

1. increasing the exports, as a promotion of GDP2. greater stress was laid on labor intensive exports like :

- Handloom- Handicrafts- Agriculture- Marine goods- Spices

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Duty Exemption Schemes of EXIM Policy2004-2009

Duty Drawback

Excise Duty Refund

Octroi Exemption

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Duty Remission Schemes of EXIM Policy2004-2009

Duty Entitlement Pass Book ( DEPB)

Duty Free Replenishment Certificate (DFRC) schemes

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Special Measures of EXIM Policy2004-2009

Duty Free Import Authorization (DFIA)

Export Promotion Capital Goods Scheme (EPCG)

Export Oriented Units (EOUs), Electronics Hardware Technology Parks(EHTPs), Software Technology Parks(STPs) And Bio-Technology Parks(BTPs)

Special Economic Zone (SEZ)

Free Trade & Warehousing Zones

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Special Economic Zone (SEZ)

Geographically distributed area or zones where the economic laws aremore liberal

Duty free enclaves for the purpose of trade, operations, duty and tariff

Self-contained and integrated having their own infrastructure andsupport services

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Indian Foreign Trade Policy (2009-2014)

The second 5 year Foreign Trade Policy was formed from 2009-2014

Two major objectives :1. Double the percentage share of global merchandize trade within 5

years

2. Use trade expansion as an effective instrument of economic growthand employment generation

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1. MARKET DIVERSIFICATION

26 new countries included in Focus Market Scheme (FMS)

Incentives under FMS increased from 2.5% to 3%

Market Linked Focus Product Scheme

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2. TECHNOLOGICAL UPGRADATION :

EPCG Scheme at zero duty

Towns of Export Excellence

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3. AGRICULTURE & VILLAGE INDUSTRY :

Vishesh Krishi and Gram Udyog Yojana

Import of restricted items

Import of pesticides Permitted

Single Window System introduced

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4. HANDICRAFTS :

Duty free import entitlement of tools, trimmings and embellishments was 5% of FOB

All handicraft exports were to be treated as special Focus productsand entitled to higher incentives

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5. GEMS & JEWELRY :

Import of gold of 8 k and above was allowed under replenishmentscheme

Duty free import entitlement of commercial samples was allowedupto Rs. 300,000

Personal carriage of Gems & Jewelry products was increased to US$5 million

Duty Drawback on export of gold jewelry

Diamond Bourse

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6. MARINE SECTOR :

Imports for technological upgradation under EPCG in fisheriessector

Duty free import of specified specialized inputs/chemicals andflavoring oils was allowed to the extent of 1% of FOB

Marine products are considered for VKGUY scheme

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7. ELECTRONICS & IT HARDWAREMANUFACTURING INDUSTRIES :

Exporters /Associations were entitled to utilize MAI & MDA Schemesfor promoting Electronics and IT Hardware Manufacturing industryexports

8. SPORTS GOODS & TOYS :

Duty free import of specified specialised inputs was allowed to theextent of 3 % of FOB

Sports goods and toys were to be treated as a Priority sector underMDA / MAI Scheme

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Promotional Measures of Foreign Trade Policy(2009-2013)

Assistance to States for Infrastructure Development of Exports(ASIDE)Market Access Initiative (MAI)Market Development Assistance (MDI)

Towns of Export Excellence (TEE)Brand Promotion & QualityExport & Trading HousesFocus Market Scheme (FMS)Focus Product Scheme (FPS)

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1. ASIDE :

Creation of new Export Promotion Industrial Parks/Zones

Setting up of electronics and other related infrastructure in exportconclave

Equity participation in infrastructure projects

Development of complementary infrastructure

Stabilizing power supply

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2. MARKET ACCESS INITIATIVE (MAI) :

Market studies/surveys Setting up of showroom / warehouse Participation in international trade fairs Displays in International departmental stores Publicity campaigns Brand promotion Testing charges for engineering products abroad Assistance for contesting Anti Dumping litigations

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3. MARKET DEVELOPMENT ASSISTANCE (MDA) :

Trade Fairs and Buyer Seller meets abroad or in India, and

Export promotions seminars

Financial assistance with travel grant is available to exporters

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4. TOWNS OF EXPORT EXCELLENCE (TEE) :

It is necessary to grant recognition to dynamic industrial clusters

Selected towns producing goods of Rs. 750 crore or more will benotified as TEE

Recognized associations of units will be provided financial assistanceunder MAI scheme

Common Service Providers in these areas shall be entitled for EPCGscheme.

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5. BRAND PROMOTION AND QUALITY :

India Brand Equity Foundation was set up by the Ministry ofCommerce on 11th July, 1996IBEF aims to promote India as a business opportunity by creatingpositive economic perceptions of India globally Aims to create international awareness of the Made in India

label in markets overseas

6 . EXPORT AND TRADING HOUSES

Merchant as well as Manufacturer Exporters, Service Providers,Export Oriented Units (EOUs) and Units located in SpecialEconomic Zones (SEZs), shall be eligible for status.

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7. FOCUS MARKET SCHEME (FMS) :

Following categories of export products/sectors shall be ineligible forDuty Credit Scrip:Supplies made to SEZ unitsService Exports

Diamonds and other precious, semi precious stonesGold, silver, platinum and other precious metalsJewelryOres and Concentrates

CerealsSugarCrude/Petroleum Oil & Crude/Petroleum based Products

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8. FOCUS PRODUCT SCHEME (FPS) :

Incentivise export of products having high export intensityemployment potential

Offset infrastructure inefficiencies and other associated costs

involved in marketing of these products

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Foreign Trade Policy (2014-2019)

The new Foreign Trade Policy 2014-19 is made product wise andlocation wise

Enhancing trade competitiveness

Indias share in world trade is expected to double from the presentlevel of 3% by the year 2020

Includes necessary measures to boost productivity

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Conclusion

India is focusing on increasing its export value by providing possibleassistance to the traders in the form of financial aid, initiatives,awards, promotional schemes, duty free schemes, etc.

India has reached a point where its exports to developed economies

cannot be increased so it has to focus on diversifying its market toless developed economies and remote areas.

It is important for India to take an initiative to diversify the exportmarkets to emerging markets of Africa, Latin America & Oceania

through appropriate policy instruments

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