2. What is 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.
3. The Foreign Trade Policy of India is guided by the
Export Import in known as in short EXIM Policy of the
Indian Government and is regulated by the Foreign
Trade Development and Regulation Act, 1992.
DGFT (Directorate General of Foreign Trade) is the
main governing body in matters related to Exim Policy.
The main objective of the Foreign Trade (Development
and Regulation) Act is to provide the development and
regulation of foreign trade by facilitating imports into,
and augmenting exports from India. Foreign Trade Act
has replaced the earlier law known as the imports and
Exports (Control) Act 1947.
4. Objectives of Foreign Trade
Policy
To arrest and reverse declining trend of
exports is the main aim of the policy.
To Double India's exports of goods and
services by 2014.
To double India's share in global
merchandise trade by 2020 as a long term
aim of this policy.
5. Simplification of the application procedure for
availing various benefits .
To encourage exports through a "mix of measures
including fiscal incentives, institutional changes,
procedural rationalization and efforts for enhancing
market access across the world and diversification of
export markets. Comprehensive economic partnership
agreement with south Korea. Trade in goods &
services agreement with ASEAN.
6. Three pillars:
Improvement in
infrastructure related to
exports.
Reduction in transaction
costs.
Provision of full refund of all
indirect taxes.
7. 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.
8. Objectives Of The Exim Policy : -
Government control import of non-essential items through
the
EXIM Policy. At the same time, all-out efforts are made to
promote exports. Thus, there are two aspects of Exim
Policy; the import policy which is concerned with
regulation and management of imports and the export
policy which is concerned with exports not only promotion
but also regulation. The main objective of the
Government's EXIM Policy is to promote exports to the
maximum extent. Exports should be promoted in such a
manner that the economy of the country is not affected by
unregulated exportable items specially needed within the
country. Export control is, therefore, exercised in respect
of a limited number of items whose supply position
demands that their exports should be regulated in the
larger interests of the country.
9. To accelerate the economy from low level of economic
activities to high level of economic activities by making it a
globally oriented vibrant economy and to derive maximum
benefits from expanding global market opportunities.
To stimulate sustained economic growth by providing
access to essential raw materials, intermediates,
components,' consumables and capital goods required for
augmenting production.
To enhance the techno local strength and efficiency of
Indian agriculture, industry and services, thereby, improving
their competitiveness.
To generate new employment.
Opportunities and encourage the attainment of
internationally accepted standards of quality.
To provide quality consumer products at reasonable prices.
The main objective of the Exim Policy is:
10. NEW FOREIGN TRADE POLICY 2009-2014
Higher Support for Market and Product
Diversification
Incentive schemes under Chapter 3 have been
expanded by way of addition of new products and
markets.
26 new markets have been added under Focus
Market Scheme. These include 16 new markets
in Latin America and 10 in Asia-Oceania.
11. The incentive available under Focus Market
Scheme(FMS) has been raised from 2.5% to 3%.
The incentive available under Focus Product Scheme
(FPS) has been raised from 1.25% to 2%
12. A large number of products from various
sectors have been included for benefits under
FPS. These include, Engineering products
(agricultural machinery, parts of trailers,
sewing machines, hand tools, garden tools ,
musical instruments, clocks and watches,
railway locomotives etc.), Plastic (value
added products), Jute and Sisal products,
Technical Textiles, Green Technology
products (wind mills, wind turbines, electric
operated vehicles etc.), Project goods,
vegetable textiles and certain Electronic
items.
13. Market Linked Focus Product Scheme (MLFPS)
has been greatly expanded by inclusion of products
classified under as many as 153 ITC(HS) Codes at
4 digit level. Some major products include;
Pharmaceuticals, Synthetic textile fabrics, value
added rubber products, value added plastic goods,
textile madeups, glass products, certain iron and
steel products and certain articles of aluminium
among others. Benefits to these products will be
provided, if exports are made to 13 identified
markets (Algeria, Egypt, Kenya, Nigeria, South
Africa, Tanzania, Brazil, Mexico, Ukraine, Vietnam,
Cambodia, Australia and New Zealand).
14. •MLFPS benefits also extended for export to
additional new markets for certain products.
These products include auto components, motor
cars, bicycle and its parts, and apparels among
others.
•A common simplified application form has been
introduced for taking benefits under FPS, FMS,
MLFPS and VKGUY.
•Higher allocation for Market Development
Assistance (MDA) and Market Access Initiative
(MAI) schemes is being provided.
15. Technological Up gradation
•To aid technological upgradation of our export sector, EPCG Scheme at
Zero Duty has been introduced. This Scheme will be available for
engineering & electronic products, basic chemicals & pharmaceuticals,
apparels & textiles, plastics, handicrafts, chemicals & allied products
and leather & leather products (subject to exclusions of current
beneficiaries under Technological Upgradation Fund Schemes (TUFS),
administered by Ministry of Textiles and beneficiaries of Status Holder
Incentive Scheme in that particular year). The scheme shall be in
operation till 31.3.2011.
•Jaipur, Srinagar and Anantnag have been recognised as ‘Towns of
Export Excellence’ for handicrafts; Kanpur, Dewas and Ambur have
been recognised as ‘Towns of Export Excellence’ for leather products;
and Malihabad for horticultural products.
