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India foreign trade policy
The document discusses India's foreign trade policy. It outlines the objectives of the foreign trade policy for 2009-2014, which include arresting the decline in exports and achieving annual export growth targets of 15% by 2013 and 25% by 2014. It also discusses India's export and import controls, composition of exports and imports, regional trade agreements, and various export promotion measures implemented by the Indian government like incentives, institutional support, and special economic zones.
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Presentation introduction by Samarth Gupta on India's Foreign and Trade Policy.
Discussion of the recent trends influencing India’s foreign trade.
Explanation of the FTP, its announcements and updates by the Union Commerce Ministry.
Short, medium, and long-term objectives of the FTP aiming to boost exports and global trade.
Export targets set at $350 billion for 2012-13 with growth rates of 15% initially, then 25%.
Details of import/export controls in India, including tariff lines and prohibited/restricted items.
Key statistics on export and import performance showing declines and trade deficits.
Critical view on India's trade growth amid global economic challenges and currency depreciation.
Graphical representation of import/export share of India as a percentage of GDP.
Data on exports from principal commodities and regions, providing insights into trade composition.
Analysis of India's export/import performance over the last 10 years.
Breakdown of export composition focusing on agricultural products and their significance.
Exports of other commodities like ores, minerals, and manufactured goods detailing their share.
Details of the composition of imports, highlighting key sectors like petroleum and capital goods.
Recap of current balance of payment situations affecting India’s trade health.
Overview of trade agreements signed by India to facilitate international trade.
Government strategies for promoting exports, including awareness and support mechanisms for exporters.
The importance of EPOs in aiding international marketing managers in export activities.
Establishment of various organizations by the government to assist exporters.
Goals of the EXIM policy focusing on economic growth and global market participation.
Key regulatory principles surrounding compliance and licensing for export imports.
Various export promotion measures including policies and fiscal incentives to boost exports.
Programs facilitating exports by allowing specific duty-free imports for production.
Details of export incentives provided to enhance production and competitiveness.
Details on various types of export-oriented units and their operational benefits.
Detailing various cash subsidies aimed at supporting exporters in different sectors.
Description of fiscal incentives offered to exporters, enhancing financial viability.
A historical perspective on import controls initiated by the government and their evolution.
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India foreign trade policy
- 1. Presented By: Samarth Gupta 18MBAIB14 India’sForeign and Trade Policy International Centre for Cross Cultural Research & Human Resource Management
- 2. Recent Trends inIndia’s Foreign Trade
- 3. What is ForeignTrade 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.
- 4. Foreign Trade Policy2009-14 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.
- 5. Targets • Export Target: $ 350 Billion for 2012-13 • Export Growth Target: 15 % for next two year and 25 % thereafter.
- 6. Import/Export Controls IMPORTS: • Around5% 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.
- 7. Import/Export Controls EXPORTS: • Controlsprimarily 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.}
- 8. Highlights • Q1 of2012-13, 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.
- 9. Highlights • Imports ofgold 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.
- 10. India’s Foreign Trade •growthis 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.
- 14. Export/Import Share ofIndia as (%) of GDP
- 15. Exports of PrincipalCommodities
- 16. Imports of PrincipalCommodities
- 17. India's Exports toPrincipal Regions
- 18. India's Imports fromPrincipal Regions
- 19.
- 20. Last 10 YearsIndia’s Export/Import Performance
- 22. Composition Of India’sForeign Trade • Composition of Exports
- 23. Agricultural and AlliedProducts • 15% share in exports • Top items of agricultural exports include: - Fish Products - Rice - Oil Cakes - Fruits and Vegetables
- 24. 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
- 25. Minerals Fuels andLubricants • 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 %.
- 26.
- 27. • 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.
- 28. Balance of PaymentSituation
- 29. CURRENT BALANCE ofPAYMENT SITUATION
- 30. Regional Trade Agreementssigned by India
- 32. THE CONCEPT OFEXPORT PROMOTION All national governments have established institutional set- ups to support export activities. The major objective of export promotion programmes is to create awareness about exports and make the people understand that it is one of the most crucial instruments of growth and market expansion. A non-exporter needs to be motivated by making him or her aware of the international marketing opportunities.
- 33. A first-time exporterhas to be assisted in finding export marketing opportunities and may be supported on matters related to export policy, procedures and documentations. An exporters consistently attempt to explore ways to improve their international marketing operations and need to be assisted by way of trade fairs, buyer sellers meet, and market promotion programmes. The export promotion programmes initiated by the government are in the form of public policy measures.
- 34. ROLE OF EXPORTPROMOTION INSTITUTIONS IN IM The export promotion organizations(EPOs) are meant to assist an international marketing manager to identify overseas market opportunities, product and packaging requirements, the pricing patterns, identifying IM channels, and marketing opportunities. Statutory requirements, such as registration-cum-membership certificates(RCMCs), quota administration , and disbursement of incentives through promotion organizations, make it necessary for the marketers to approach these organizations.
- 35. INSTITUTIONAL SET-UP FOREXPORT PROMOTION IN INDIA In order to provide guidance and assistance to an exporter, the Government of India has setup several institutions. The institutional set-up for export promotion in India can be divided into six different tires: 1. Department of commerce 2. Advisory Bodies 3. Commodity Organizations 4. Service Organizations 5. Government Trading Organizations 6. State Export Promotion Agencies
- 36. SERVICE INSTITUTES Indianinstitute of foreign trade Indian council of arbitration India trade promotion organization National centre for trade information Export-credit guarantee corporation Export import bank of India Indian institute of packing Federation of Indian export org.
- 37. EXIM Policy • Acceleratingthe country’s transition to a globally oriented vibrant economy with a view to derive maximum benefits from expanding global market opportunities; • Stimulating sustained economic growth • Enhancing the technological strength and efficiency • Encouraging the attainment of internationally accepted standards of quality • Providing consumers with good quality products and services at reasonable prices.
- 38. General provisions regardingexport import • Exports and Imports free unless regulated • Compliance with Laws • Interpretation of Policy • Procedure: • Exemption from Policy/ Procedure • Principles of Restriction • Restricted Goods • Terms and Conditions of a Licence • Importer-Exporter Code Number • Exemption from Bank Guarantee • Clearance of Goods from Customs
- 39. EXPORT PROMOTION MEASURES •Policy measures • Institutional set up. • Import Facilitation for Export Production. • Cash subsidies. • Fiscal Incentives. • Foreign Exchange Facilities. • Export incentives • Export production units
- 40. Import Facilitation forExport Production • Export Promotion Capital Goods Scheme • Special Import Licenses • Duty Free Licenses under Duty Exemption Scheme • Duty free licenses are issued as : • (1) Advance license • (2) Advance Intermediate license. • (3) Special Impress license. • (4) License for jobbing, repairing etc. for re-export. • (5) License under export production programme. • (6) Advance Release Order. • (7) Back to Back Inland Letter of Credit.
- 41. Export Incentives • DutyExemption • Duty Drawback Scheme • DFRC (Duty free replenishment certificate) • DEPB( Duty entitlement pass book) • Deemed Exports
- 42. Export Production Units •Export Oriented Unit (EOU) • Special Economic Zones (SEZ) • Software Technology Parks (STP) • Electronic Hardware Technology Parks (EHTP)
- 43. Cash subsidies • Marketingdevelopment assistance • Air freight subsidy • Spices export promotion scheme • Jute externel marketing assistance • Financial assistance scheme agriculture &meat exports • Financial assistance to marine products exports
- 44. Fiscal incentives • Exemptionfrom payment of central excise duty & simplified procedure for clearance. • Exemption from sales tax • Exemptions & deductions under income tax act,1961. • Duty draw back Scheme (DDS) • Cash Compensatory Support ( CCS ) • International Price Reimbursement Scheme (IPRS)
- 45. Import control regime •1956-57, restrictions on imports started as lot of imports were there as such Government even had to import food grains for self fulfillment • Imports were classified into • Banned items ,Canalized items ,Restricted items, OGL • In 1966 rupee was devalued by 36.5% By devaluation government expressed the hope that the devaluation would lead to expansion in export earnings as Indian goods will become cheaper in international market on the other hands import would decline as price of imported goods would increase.
- 46. • Because ofa rigid itemization of permissible imports, an element of inflexibility in the pattern of utilization of imports was introduced. The transferability of licenses among same and different industries was not permissible. This gave rise to an expanding black market in import licenses. Therefore, the import allocation system was so designed as to eliminate the possibility of all competition, either domestic or foreign. The Govt of India has liberalized the import regime from time to time. At present, practically all controls on import have been lifted. Under the new EXIM policy 2002-07.