FOREIGN TRADE POLICY

Group No.6

WHAT IS IT?

A 5 year policy announced by the Ministry of Commerce and Industry. It aims at developing export potential, improving export performance, encouraging foreign trade and creating favorable balance of payments position. The Export Import Policy (EXIM Policy) is updated every year on the 31st of March and the modifications, improvements and new schemes becomes effective from 1st of April every year.

WHY IS IT NECESSARY?

To become a major player in world trade Trade propels economic growth and development Stimulation of greater economic activity Improve Balance of Payment and Balance of Trade conditions

A QUICK LOOK AT FTP 03-08

Areas of growth 2003 2008

Exports Share of merchandise trade

$63bn 0.83%

$168bn 1.45%
2.8% 1.64%

Share of global commercial services 1.4% export Share in goods & services trade 0.92%

RECESSION AND ITS EFFECTS

CURRENT FOREIGN POLICY

The three pivotal pillars are:1. 2. 3. Improvement in infrastructure related to exports Bringing down transaction cost Providing full refund of all indirect taxes & levies.

OBJECTIVES OF FTP 09-14

The short term objective is to : arrest and reverse the declining trend of exports

Provide additional support to badly hit sectors

More specifically: To achieve an annual growth rate of 15% with a target of $200mn by 2011.

To come back to a growth rate of 25% pa by 2014.

OBJECTIVES OF FTP 09-14

To double export of goods and services by 2014 Long term objective is to double Indias share in global trade by 2020. To promote Brand India through 6 or more Made in India shows organized every year.

To accelerate growth in the export of services so as to create a powerful and unique Served from India brand.

MEASURES OF EXPORT PROMOTION

1.

DEPB: Duty Entitlement Passbook (DEPB) Scheme The exporter is entitled for a duty credit as a specified percentage of FOB value of exports, made in freely convertible currency. It will be continued till December,2010. MDAS: The Marketing Development Assistance Scheme Participation in trade fairs and buyer seller needs abroad or in India, export promotion, seminars etc

2.

MEASURES OF EXPORT PROMOTION

3.

MAS: The Market Access Initiative (MAI) Scheme Is a Medium Term Export Promotion effort with a sharp focus on a country and product. VKGUY: Vishesh Krishi Upaj Yojana Scheme Allows duty free import of inputs or goods including capital goods (as notified) against export of certain agricultural and their value added products.

4.

SOME MORE MEASURES

5. Reward-Incentive Schemes: Service exporters who have free foreign exchange earning of at least Rs.10lakhs in the preceding financial year get a Duty Credit Scrip of 10% of earnings.

6. Quality complaints: In order to protect from quality complaints, Regional Sub-committee on Quality Complaints for investigation and for preventive measures.

FREE TRADE AGREEMENTS

Currently:-

EFTA: European Free Trade Agreement AFTA: ASEAN Free Trade Agreement NAFTA: North American Free Trade Agreement

SOME OTHER AGREEMENTS

More Recently:1. Comprehensive Economic Partnership Agreement with South Korea: Will cut SK tariffs on 90% of goods from India while India will cut 85% of total tariffs Will provide better access for Indian Service Industry in SK Will ease restrictions on FDI.

2. Trade In Goods Agreement with ASEAN To resume from Jan 1,2010.

SOME OTHER AGREEMENTS

3. Mercosur Preferential Trade Agreement (PTA) Creation of a Free Trade Area

Establishing trade disciplines among parties Compatibility with multilateral trading system Gradual and reciprocal liberalization of trade

THANK YOU