2. Significance of Foreign Trade
Trade based on comparative advantage
Optimum utilisation of resources
Promotes competition
Optimisation of consumption
Development of SOCs
Technological development
Promotes cooperation
Check on domestic monopoly
3. India’s Composition of Foreign
Trade
Composition of Imports
Import of POL amounted to $82,880 million
which was 21.8% of total import expenditure in
2015-16
Import of electronic goods amounted to
$40,012 million in 2015-16
Import of pearls, precious and semi precious
stones amounted to $20,072 million which was
5.3% of total import expenditure in 2015-16
Import expenditure on electrical and non-
electrical machinery amounted to $29,452
million in 2015-16
4. India’s Composition of Foreign
Trade
Composition of Exports
Export of engineering goods amounted to
$60,570 million in 2015-16
Export of gems and jewellery amounted to
$39,473 million in 2015-16
Export of readymade garments amounted to
$16,956 million in 2015-16
Export of leather and leather products
amounted to $5401 million in 2015-16
5. Foreign Trade Policy in the Pre-
Reform Period
Import substitution
Simplification of procedural formalities
Export promotion
Minimization of the role of quantitative restrictions
and reduction in tariff rates
Setting up of Export processing zones to push up
exports
6. Trade Policies in the Post-Reform
Period
Rationalization of tariff structure
Decanalisation
Devaluation
Trading houses
Setting up of SEZs
Agriculture Export Zones
Market Access Initiative Scheme
7. EXIM Policy (2002-07)
The target was to increase country’s share in
the world trade to 1 per cent by 2007
To increase the growth rate in exports to 12.4
% per annum
To allow liberal import of technology
To remove quantitative restrictions
8. EXIM Policy (2002-07)
Facilities for agriculture sector
Benefits to cottage and small scale industries
Facilities to SEZs
Facilities for industrial sector
Focus on export led growth
Procedural simplification
9. EXIM Policy (2004-09)
The target was to double India’s percentage share
of global merchandise trade by 2009. The target
was set to achieve 1.5 % share in world trade by
2009
The objective was to act as an effective
instrument of economic growth by giving a thrust
to employment generation, especially in semi-
urban and rural areas
10. EXIM Policy (2004-09)
Measures for agriculture sector
Measures for gems and jewellery business
Handlooms and handicrafts sector
Leather and footwear sector
Vishesh krishi upaj yojana
EPCG scheme
Exemption from certain taxes to EOUs
Free trade and warehousing zone
11. EXIM Policy (2009-14)
Expansion of Focus Market Scheme and
Focus Product Scheme
EPCG Scheme
Sale of products by EOUs in Domestic Tariff
Areas up to a limit of 90%
Simplification of procedures
12. EXIM Policy (2015-20)
Objectives:
To increase exports of merchandise and services to approx $900
billion by 2019-20
To increase the country’s share in world’s exports to 3.5%
To diversify India’s exports
To improve India’s BOP position
Merchandise Export from India Scheme
Service Export from India Scheme
Ease of Doing Business