{"id":152,"date":"2018-10-26T05:34:21","date_gmt":"2018-10-26T05:34:21","guid":{"rendered":"http:\/\/mgmtp12.epgpbooks.inflibnet.ac.in\/?post_type=chapter&p=152"},"modified":"2018-10-26T05:39:55","modified_gmt":"2018-10-26T05:39:55","slug":"exim-policy","status":"publish","type":"chapter","link":"https:\/\/ebooks.inflibnet.ac.in\/mgmtp12\/chapter\/exim-policy\/","title":{"rendered":"Exim Policy"},"content":{"raw":"
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Learning Outcome: <\/strong>After completing this module the students will be able to:<\/p>\r\n \r\n

Understand the concept of Foreign Trade Policy Understand the features and objectives of different Trade Policies of India (pre and post the reform period) Critically\u00a0 evaluate the previous and current FTPs of India<\/p>\r\n \r\n\r\n1.\u00a0<\/strong>Introduction<\/strong>\r\n\r\n \r\n

Meaning: \u2018Exim Policy or Foreign Trade Policy is a set of guidelines, terms and instructions, established by the Directorate General of Foreign Trade in\/for matters related to the import and export of goods in\/from India\u2019<\/p>\r\n \r\n

The EXIM Policy of India <\/a>contains several policy measures and related decisions taken by the government (central) in the sphere of imports and exports to\/from the country. In addition, it also describes the various export promotion measures, <\/a>policies and procedures related thereto. The Foreign Trade Policy is prepared and announced by the Central Government (Ministry of Commerce) of the country. India's Export Import Policy also known as Foreign Trade Policy, in general, aims at developing export potential, improving export performance, encouraging foreign trade and creating favorable balance of payments position.<\/p>\r\n \r\n

The Directorate General of Foreign Trade is the chief governing body for the matters pertaining to such a policy. In addition the policy is steered according to the regulations stated in the Foreign Trade Development and Regulation Act. The current, Foreign Trade Act has replaced the earlier law in this regard, known as the imports and Exports (Control) Act 1947.<\/span><\/p>\r\n\r\n<\/div>\r\n

\r\n\r\n \r\n\r\n2.<\/strong>\u00a0\u00a0\u00a0 History of EXIM Policy in India<\/strong>\r\n\r\n \r\n

Whilst the trade policies during 1950s and 1960s were designed to lay emphasis on self reliance<\/strong> and self sufficiency<\/strong> of the country; the policies during (and post) 1970s were driven by the objectives of export led growth<\/strong> and increased efficiency<\/strong> and competitiveness.<\/strong> In the year 1962, the Government of India appointed a special EXIM Committee to review the previous export import policies of the Government. Later, Mr. V. P. Singh, the then Commerce Minister announced the Exim Policy on the 12th of April, 1985. Initially, the EXIM Policy was introduced for the period of three years with main objective to boost the export business <\/a>in India. The trade policy, however during this period was of a restrictive sort. In this context, the year 1991 is considered as a \u2018watershed\u2019 as far as the trade sector of the country is concerned. It was in\/during this year that the country evidenced massive trade liberalization measures and departed from the prevalent protectionist trade policies. The period, after the year 1991 is therefore considered as the post reform period. Major milestones in the progression from individual import and export policies to composite EXIM policies have been summarized in the chart below:<\/p>\r\n\r\n<\/div>\r\n\"\"\r\n

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With this backdrop, the trade policies of the country have been divided into the following phases:<\/p>\r\n

Phases I and II can be considered as the Pre Reform Period, and Phase III as the Post Reform Period.<\/p>\r\n2.1 FTPs in the Pre Reform Period (Phases I and II)<\/strong>\r\n\r\n \r\n

Following can be considered as the areas of major focus of the Foreign Trade Policies in the pre reform era:<\/p>\r\n \r\n\r\nImport Substitution<\/strong>\r\n\r\n \r\n

India entered into planned development era in 1950\u2019s. During that time, Import Substitution was a major element of India\u2019s trade and industrial policy. In 1950, India\u2019s share in the total world trade was 1.78%, which reduced to 0.6% in 1995. Import substitution was thrust upon to protect and promote indigenous industries.<\/p>\r\n \r\n\r\nSimplification of Import Licensing<\/strong>\r\n\r\n \r\n

The very first committee to review and recommend the Import\u2013Export policies and procedures in the country was the PC Alexander Committee (1978). This committee recommended simplification of the Import Licensing procedure and provided a framework involving a shift in the emphasis from \u201ccontrol\u201d to \u201cdevelopment\u201d.<\/p>\r\n \r\n\r\nExport Promotion<\/strong>\r\n\r\n \r\n

Under the EOU (1981), several Export Oriented Units were set up. These were set up to offer benefits to the export houses, in order to boost the country\u2019s exports. Additionally, the Export and Import Bank of India (EXIM Bank) was set up in 1982. This bank, subsequently took over the operations of international financing of the IDBI.<\/p>\r\n \r\n\r\nFocus on Exports as Catalysts for Growth<\/strong>\r\n\r\n \r\n

In the Trade Policy of 1985-88, some measures were taken based upon the recommendation of Abid Husain Committee (1984). This committee envisaged \u201cGrowth Led Exports, rather than Export Led Growth\u201d. The recommendation of this committee stressed upon the need for harmonizing the foreign trade policies with other domestic policies. Additionally, the Committee recommended announcement of foreign trade policies for longer terms.<\/p>\r\n\r\n<\/div>\r\n

\r\n\r\nOther Features of the pre reform FTPs included the following:\r\n