Foreign Trade Policy of India(2009-14)

What is Foreign Trade?

Exchange of goods and services between the countries is known as foreign trade. The difference is the producer and consumers reside in separate countries.

The foreign trade policy and regulation is a very important determinant of the business environment. The export-import policy, for example, can have significant impact on the competitive environment and the export sector.

HISTORY OF FOREIGN TRADE IN INDIA

Import control was introduced in 1940

Import and Export(control) Act came into

force with effect from 25th march 1947 Finally the Import and Export(control) act was replaced by the Foreign Trade(Development and Regulation) Act in 1992.

Key strategies for achieving its Objectives :Simplifying procedures and bringing down transaction costs; Facilitating development of India as a global hub for manufacturing , trading and services. Identifying and nurturing special focus areas to generate additional employment opportunities , particularly in semi-urban and rural areas. Facilitating technological and infrastructural upgradation of the Indian economy ,especially through import of capital goods and equipments. Activating Indian embassies as key players in the export strategy.

Indian 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 policy. The Foreign Trade Policy which was announced on August 28, 2009 is an integrated policy for the period 2009-14 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.

INDIAS FOREIGN TRADE POLICY 2009-14

Short Term Objectives: To arrest and reverse the declining trend of exports; and To provide additional support to those sectors which have been hit badly by recession in the Developed World. Medium term Policy Objectives : To achieve an Annual Export growth of 15% with an Annual Export Target of US$ 200 billion by March 2011. To achieve an Annual Export growth of around 25% by 2014. To double Indias exports of goods and services by 2014. Long Term Objective : To double Indias share in Global Trade by 2020.
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INDIAS FOREIGN TRADE POLICY 2009-14

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 for those sectors which job losses like textiles, leather, handicrafts etc. during recession.

A fall in exports has led to the closure of several small- and medium-scale export-oriented units, resulting in large-scale unemployment.

INDIAS FOREIGN TRADE POLICY 2009-14

Targets:

Export Target : $ 450 Billion for 2013-14

Export Growth Target: 25 % every year Three pillars: i. Improvement in infrastructure related to exports. ii. Reduction in transaction costs. iii. Provision of full refund of all indirect taxes.