FOREIGN TRADE POLICY IN INDIA Dr.Suhas Avhad
Professor Head, Dept.of Economics, S.M.B.S.T.College, Sangamner
.
Introduction : The Foreign Trade refers to the exchange of goods, capital or specific services beyond the international territory with the prior authentication from the government authorities. The gross domestic product (GDP) of most of the countries is having key relationship with internati
onal Trade. The financial system of the country is majority dependents on its perspective & adaptation of exports & imports from other countries so that the foreign currency can be magnetized to improve the overall economic scenario & related factor which includes the inflation rate ,banking modules, generation of employment & many other to escalate the nation in assorted dimensions from the research reports of year2014,it is found that India is on 19th position in terms of principal exporter in the global market having exports equivalent to 3.5 trillion dollars. The gross domestic product (GDP) of the market of the countries having key relationship with the international Trade. After independence there were no specific or strict rules regarding the export & import. In the new foreign trade policy which is known as a foreign trade policy 2015-2020,its broadcasted that there will be the special incentives & promotions for the exporters in different streams. Govt. of India is promotion & attracting the domestic exports to work on ‗Make in India‘ so that the Indian products can be sold in International Market & overall economy can be strengthened. Govt. of India is predicting the export of 900 billion dollar by years 2020 after implementation of the new foreign trade policy.
Research Objective : The Foreign trade policies are decidedly effective in terms of promoting the new EXIM client & ventures. still there is the need to analyze various factor which can affect the overall economy & EXIM status of the nation.
Importance of foreign Trade for Developing Economy : Before 1947 when India was a colony of the British, the pattern of her foreign trade was typically colonial. India was a supplier of foodstuff & raw materials to the industrialized nations particularly England & an importer of manufactured goods. This dependence on foreign countries for manufactures did nit permit industrialization at home rather as a result of the competition from British manufactures. The indigenous handicraft suffered a severe blow. The evolution of India‘s foreign trade policy can be understood within the context of external dynamics & domestic priorities India‘s international trade policy following her independence in 1947 focused on economic nationalism. During 1947-1990 India‘s economic development strategies were guided by an inward looking development strategy based on the idea of self reliance & infant industry policy i.e stimulating home grown industrialization & import substitution & minimal reliance on international trade. With the world based on complex independence India‘s prosperity is intrinsically liked to the development in the global economy. This is the reason that India has seen greater engagement with the world economy through its enhanced integration into global value chains over the last two decades. The data analysis of export, imports & foreign investment inflows n terms of both FDI & FIT reflective of this trend. The main objective of this policy was to ensure the countries independent development. The foreign Trade policy refers to the exchange of goods, Capital & Services beyond the international territory. The gross domestic product of most of the countries is having key relationship with the international trade. A Product or Services that is transmitted to the international market refer as an Export while the Import refers to buying the product or services from beyond the world.
Trends in India‟s Foreign Trade Policy: With the world based on complex interdependence, India‘s prosperity is intrinsically linked to the development in the global economy. This is the reason that India
SCHOLARLY RESEARCH JOURNAL FOR INTERDISCIPLINARY STUDIES ISSN: 2349-4766
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has seen greater engagement with the world economy through its enhanced integration into global value chains over the last two decades. The data analysis of export & import inflows in terms of foreign direct investment.
Trends in Export & Import in India: India‘s exports have seen upward trends since the new millennium have increased from 44560.29 million dollars to 314405.3 million dollars in 2013-14. Thereafter export have slowly declined to reach 262290.3 million dollars in 2015-16 Similarly India‘s Import also increased from 50536.45 million dollars to 490736.65 million dollars in 2012-13,and downward 381006.63 million dollars in 2015-16.
Highlights of current Foreign Trade policy (2015-2020) :
1.The Central Government announced two new scheme foreign trade policy are ―Merchandise export from India Scheme‖ (MEIS) & ―Service Exports from India Scheme‖(SEIS) .
2.The Merchandise export from India to promoting specific services for specific market. 3.All Service scheme have been replaced by a Service Exports from India Scheme
4.Foreign Trade policy would reduce export obligation by 25 % and give boost to domestic manufacturing.
5.Both ―Merchandise export from India Scheme‖ (MEIS) & ―Service Exports from India Scheme‖(SEIS) firms & services providers can now get subsidized office space in Special Economic Zone, along with other benefit.
6.Books,handicraft & handlooms are eligible for benefit of Merchandise export from India Scheme & export up to Rs.25000 per consignment will get Service Exports from India Scheme.
7.As part of Digital India vision mobile app would be created to easily filling taxes, Stamp duty, Automatic money transfer using Internet Banking.
8.The higher level of support to be provided to processed and packaged agriculture items and foods items under Merchandise export from India Scheme.
9.Industrial product to be support in major markets at rates ranging from 2% to 3%. 10.The business services, hotel and restaurants to get rewards scrip under Service Exports from India Scheme at 3% other specified services at 5%.
11.Freely transferable & usable for payment of custom duty, excise duty and service tax. 12.The criteria for export performance for recognition of status holder have been changed from rupees to dollars.
13.Inter-ministrial consultations to be held online for issue of various licenses. 14.No need to repeatedly submit physical copies of document available on Exporter important profile.
15.Export obligation period for export items related to defense, military store, aerospace and nuclear energy to be 24 months instead of 18 months.
16.Kerala, Calicut, Arakonam & Tamilnadu Airport notified as registered ports for import & export also Vishakhapatnam and Bhima
Measures in the new foreign trade policy : The central government published foreign trade policy statement giving in brief the dynamic sub global market and India‘s trade performance, challenges and declared vision, mission, goals and objectives for increasing export, professional and competitive approach is necessary in marketing. The tax incentive can be gradually reduced once the units become sustainable. Ensuring adequate availability of raw material inputs regularly and at reasonable prices to the SME export units is to ensured. The Foreign Trade Policy announced by the minister of state for commerce and Industry on 1 St April 2015 attempts to fix some of the problems. Indian manufacturing
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sector is geared to move fast under the dynamic leadership of the India‘s Prime Minister of India with remarkable initiatives like Make In India, Digital India, Skill India which is in tune with the Foreign trade Policy. India expected to rank among the world‘s top three growth economies and amongst the top three manufacturing destinations.
Conclusion : Due to uneven distribution of natural resources, some countries are more suitable place to produce some goods more economically than other countries. further the underdeveloped & developing countries have to depend upon developed countries for financial help , which ultimately encourages foreign trade. According to the theory of comparative cost, each country should concentrate on the production of those goods or services for which it is best suited & specializes in the production of that goods or services, thus there is a significant increase in the overall production with minimized costs and resulting in higher standard of living of the people. Foreign Trade policy helps in increasing the revenue of a nation by improving on the exports, which in turn help in improving the balance of payment. Foreign Trade propels economic growth & national development. The primary purpose is not the mere earning of foreign exchange, but the stimulation of greater economic activity.
Reference : Datta & Sundharam‘s
Indian Economy, S. Chand publication 72 th edition
Giri Pratibha, Contribution of foreign trade policy in enhancing India‘s export competitiveness.
http://indianbusiness.nic.in
SCHOLARLY RESEARCH JOURNAL FOR INTERDISCIPLINARY STUDIES ISSN: 2349-4766
OCT-DEC, 2017, VOL-6/34 Page 49