What is Foreign Trade Policy?
• Union Commerce Ministry, GoI announces integrated FTP
every five year also called EXIM policy.
• policy updated every year with some modifications & new
schemes.
• FTP which was announced on August 28, 2009 is an integrated
policy for the period 2009-14.
Foreign Trade Policy 2009-14
Short Term Objectives:• arrest and reverse the declining trend of exports. • provide support to those sectors which have been hit badly by recession.
Medium term Policy Objectives :• achieve an Annual Export growth of 15% by March 2013. • achieve Annual Export growth of around 25% by 2014.
Long Term Objective :• doubling India’s share in Global Trade by 2020.
Targets
• Export Target : $ 350 Billion for 2012-13
• Export Growth Target: 15 % for next two year and 25 % thereafter.
Import/Export Controls
IMPORTS:
• Around 5% Tariff Lines are under Import Controls.
• 11600 Tariff Lines are free for import.
• Restrictions removed over the next 10 years, removing almost all the
Quantitative Restrictions.
• Presently:
Prohibited items - 53 Lines
Restricted items - 485 Lines
State Trading Items - 33 Lines.
Import/Export ControlsEXPORTS:• Controls primarily on account of security, public health, morals,
exhaustible resources and environment grounds. Prohibited items - 59 Restricted items - 155 State Trading Items - 12
• Restrictions fall under two Categories:- Special provision for these items under Weapons of Mass Destruction
Act, 2005. Export Facilitation Committee looks into applications for license for
these items.{Special chemical ,organisms, materials, equip. & tech.}
Highlights
• Q1 of 2012-13, exports stood at US$ 75.2 bn and showed a
decline of 1.7 per cent as against an increase of 36.4 per cent
during Q1 of 2011-12.
• Q1 of 2012-13, imports declined by 6.1 percent over the
corresponding quarter of 2011-12 and stood at US$ 115.3 billion.
• Lower growth in POL imports at 5.5 percent during Q1 of 2012-
13 as compared with 52.5 percent during Q1 of 2011-12.
Highlights
• Imports of gold and silver, US$ 9.4 bn during Q1 of 2012-13
were 48.4 per cent lower than that in Q1 of 2011-12.
• Non-oil non-gold imports during Q1 of 2012-13 at US$ 65.3
bn recorded a decline of 2.9 per cent as compared to an
increase of 18.9 per cent in Q1 of preceding year.
• Trade deficit during Q1 of 2012-13 stood lower at US$ 40.1
bn as compared with US$ 46.2 bn during Q1 of 2011-12.
India’s Foreign Trade•growth is uncertain in coming months, given the worsening global
macroeconomic outlook and high interest rate in the domestic market.
•During April-Sept 2011, India's imports expanded by 32.4% to $ 233.5
billion. The trade deficit during the April-Sept’ 2011 period stood at $ 73.5
billion. Increasing Trade Deficit further depreciates Rupee.
•depreciation of rupee will also push up cost of imports leading to wider
trade deficit in coming times.
Agricultural and Allied Products
• 15% share in exports• Top items of agricultural exports include: - Fish Products - Rice - Oil Cakes - Fruits and Vegetables
Ores and Minerals
• 12.3% share in exports.
Manufactured Goods• 61.3% share in exports.- Include: Engineering Goods Gems and Jewellery Chemical and Allied Products Readymade Garments
Minerals Fuels and Lubricants
• 18.3% share in exports• There has been improvement in the exports of mineral
fuels and lubricant both in terms of value and in terms of %.
• Petroleum Products 31.7% share in Imports.• Capital Goods 20.3% share in Imports.• Pearls and Precious Stones 6.2% share in Imports.• Iron and Steel 2.4% share of Imports.• Fertilizers 2.4% share of Imports.
Conclusion
Composition of India’s Foreign Trade has undergone a positive change. It is a remarkable achievement that India has transformed itself from a predominantly primary goods exporting country into non primary goods exporting country. Under Imports also India’s dependence on food grains and capital goods has declined.