This site provides comprehensive information on Foreign Trade Policy of India .

The site also focuses on India's achievements as a result of its well designed Foreign Trade Policy. To become a major player in world trade, a comprehensive approach needs to be taken through the Foreign Trade Policy of India . Increment of exports is of utmost importance, India will have to facilitate imports which, are required for the growth Indian economy. Rationality and consistency among trade and other economic policies is important for maximizing the contribution of such policies to development. Thus, while incorporating the new Foreign Trade Policy of India, the past policies should also be integrated to allow developmental scope of Indias foreign trade. This is the main mantra of the Foreign Trade Policy of India. Objectives of the Foreign Trade Policy of India Trade propels economic growth and national development. The primary purpose is not the mere earning of foreign exchange, but the stimulation of greater economic activity. The Foreign Trade Policy of India is based on two major objectives, they are y y

To double the percentage share of global merchandise trade within the next five years. To act as an effective instrument of economic growth by giving a thrust to employment generation.

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Removing government controls and creating an atmosphere of trust and transparency to promote entrepreneurship, industrialization and trades. Simplification of commercial and legal procedures and bringing down transaction costs. Simplification of levies and duties on inputs used in export products. Facilitating development of India as a global hub for manufacturing, trading and services. Generating additional employment opportunities, particularly in semi-urban and rural areas, and developing a series of Initiatives for each of these sectors. Facilitating technological and infrastructural upgradation of all the sectors of the Indian economy, especially through imports and thereby increasing value addition and productivity, while attaining global standards of quality. Neutralizing inverted duty structures and ensuring that India's domestic sectors are not disadvantaged in the Free Trade Agreements / Regional Trade Agreements / Preferential Trade Agreements that India enters into in order to enhance exports. Upgradation of infrastructural network, both physical and virtual, related to the entire Foreign Trade chain, to global standards.

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Revitalizing the Board of Trade by redefining its role, giving it due recognition and inducting foreign trade experts while drafting Trade Policy. Involving Indian Embassies as an important member of export strategy and linking all commercial houses at international locations through an electronic platform for real time trade intelligence, inquiry and information dissemination.

Partnership Foreign Trade Policy of India foresees merchant exporters and manufacturer exporters, business and industry as partners of Government in the achievement of its stated objectives and goals. Road ahead of Indian foreign trade policy This Foreign Trade Policy of India is a stepping stone for the development of Indias foreign trade. It contains the basic principles and points the direction in which it propose to go. A trade policy cannot be fully comprehensive in all its details it would naturally require modification from time to time with changing dynamics of international trade.

This site provides comprehensive information on India Foreign Policy. The site also focuses on India's contributions and achievements as a result of its well crafted foreign policies, voicing issues of global concerns. India foreign policies were formulated by our national leaders ever since India's independence. The principles of India's foreign policies are y y y y y

Fostering cordial relations with other countries Solving conflicts by peaceful means Sovereignty and equality of all nations Independence of thought and action as per the principles of Non-align Movement or NAM Equality in conducting international relations

India - the founder member of the Non-aligned Movement (NAM), raised its voice representing collective aspirations and interests of all the developing nations of the world. India Foreign Policy covers vital issues of development, peace and stability. India was the first country to raise the question of racial discrimination in South Africa in 1946 and also aims at eradicating colonialism. Indian foreign policy has been voicing the need for complete disarmament of

nuclear weapons. India has taken several initiatives within the United Nations and outside, like Disarmament - an action plan for ushering in a nuclear weapons free and non-violent world. Indian foreign policy has opposed discriminatory treaties such as the Nuclear NonProliferation Treaty (NPT) and Comprehensive Nuclear Test Ban Treaty (CTBT) and has refused to give up its nuclear program until all nations of the world including nuclear weapon states accepts and respects the idea of total nuclear disarmament in a phased manner. India foreign policy has been firmly committed to the purposes and principles of the United Nations and has made significant contributions like participating in all peace-keeping operations like those in Korea, Egypt, and Congo in earlier years of its operation and then in Somalia, Angola, and Rwanda in recent years. India foreign policy focuses on active participation in the creation of a more balanced international economies. India has been an active member of the Group of 77, and later the core group of the G-15 nations. India foreign policy constantly addresses other important issues of international importance, such as environmentally sustainable development and the promotion and protection of human rights. India Foreign Policy is well aligned with its national interests and security. A well crafted India Foreign Policy has succeeded in establishing a network of mutually beneficial relations with all countries of the world, particularly in the improving relations with its neighbors.

Any country as large as India has many different objectives of its trade policies and the relative priorities of these objective keep on changing from time to time with progress in the economy of the country, changing world economic scene and economic ideologies of the government laying down such policies. In general we can the main objectives of trade policy of India can be identified as the following.
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Rapid economic growth of the country that will lead to improvement of the living standards of people. Upliftment of the less privileged class of the people. Also greater emphasis is given to improvement of farming sector. Similarly special attention is paid to development of small scale sector. Balanced growth of different geographical regions of the country. Earlier the country had followed a policy of very strong public sector role in economic development. However, in last two decades there has been steady and rapid emphasis on private sector. Similarly, earlier India had followed a policy of providing high degree of protection to local industries from foreign competition. But now the economy has become more open to international trade including foreign direct investment.

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Also the role of central planning in regulating growth of different sectors of trade and industry has been progressively reduced.

Indias new foreign trade policy: Old wine in new bottles

October 3rd, 2009 Author: Nabeel Mancheri, Hiroshima University The recently released new five-year national Foreign Trade Policy (FTP) of India has set a few objectives.

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Given the current financial crisis, it is also intended to provide a confidence boost for the export market. Its objectives are ambitious. Fiscal incentives, institutional changes, procedural rationalisation, and enhanced market access across the world, as well as the diversification of export markets are the trust areas mentioned in the document. However, the document doesnt provide any new thoughts and lacks any bold initiative in terms of longer term objectives. It is the same old type of bureaucratic exercise that the Commerce Ministry has been carrying out for decades. The continuation of the same old policies, such as targeting a set of trade or export goals, mentioning a few sectors of importance and reshaping fiscal packages is as flawed as past approaches. It lacks proper mechanisms for future planning, and will be unable to examine past failures which have limited the Indian share to a mere 1 per cent of global trade for decades. The FTP sets a policy objective of achieving an annual export growth rate of 15 per cent, and an annual export target of US$200 billion by March 2011. In the remaining three years, the FTP proposes a high export growth path of around 25 per cent per annum, and expects to double Indias exports of goods and services. The long term policy objective is to double Indias share in global trade by 2020. This may not be achievable if the Commerce Ministry doesnt go beyond its traditional way of thinking. The FTP alludes to the success of Chinese efforts to increase their trade, and recommends adopting a similar strategy to increase exports in the Indian manufacturing sector. This is

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a positive step, but a lot of ground work will be required to implement this. Change has to come from the bureaucracy first. The productivity of Indian bureaucrats must be increased, corruption must be reduced, and FDI policies must be liberalized to attract greater investment. As for means, the new FTP appears to be based on three main pillars. Firstly, the shortterm objective is to arrest and reverse the declining trend of exports and to provide additional support to sectors hit badly by recession in the developed world. Secondly, support for market and product diversification is targeted. 26 new markets have been added under the Focus Market Scheme. These include 16 new markets in Latin America and 10 in Asia-Oceania. The incentive available under the Focus Market Scheme (FMS) has been raised from 2.5 per cent to 3 per cent. The incentive available under Focus Product Scheme (FPS) has been raised from 1.25 per cent to 2 per cent. Thirdly, objectives and commitments to ensure increased employment opportunities, addressing the issues of labour-intensive exports and making the export business more convenient and trouble free are targeted by bringing down transaction costs, and improving infrastructure related to exports . Gems and jewellery, textiles, leather, auto components and pharmaceuticals are declared labour-intensive sectors getting special dole and attention in the policy. Repositioning income tax in the IT sector, and altering the duty on engineering and electronic products, as well as others, are part of a raft of policy measures. Most of the schemes, however, are geared towards the short term objective of preventing exports further declining, and fiscal incentives do not go beyond the period of 2011. What difference does it make to raise the FMS from 2.5 per cent to 3 per cent and the FPS from 1.25 per cent to 2 per cent?. Just changing these nominal figures will not have any real impact. Moreover, these are the acronyms that we have been polishing, renaming and reintroducing with a view to changing the nominal figures in every FTP that the Ministry has released in the past. How many in the export market really bother about these figures mentioned in these policy documents? A previous post on this same topic by Rajiv Kumar of ICRIER reveals that a recent survey of 400 exporting firms as a part of a study showed that up to 20 per cent of exporters do not avail themselves of export incentives due to the hassles involved and more than 50 per cent admitted to having had to incur some expenditure to avail the benefits under various schemes. So the problems lie else where, not in the tips the government provides every five years. The new FTP proposes the promotion of Brand India through six or more Made in India shows to be organized across the world every year. This is a supplementary step, and it should not be a wholly government funded program. Indian multinationals and Small and Medium Enterprises (SMEs) should be brought in as main sponsors and be encouraged to carry it in the future with the help of industrial organisations abroad. Moreover, it is not only the brand that matters but the quality, competiveness and availability of Indian products in foreign markets. People see the price and quality first before looking at what country has produced it. Have the FTPs ever looked to increase quantity in an existing market? For example, the availability of Indian manufactured goods in Japan and Australia is minimumal, where

the people are aware of the quality of Indian manufactured items such as textile and leather products, and it will be true in other markets too around the world. Take any department storeroom in Japan or Australia. For every 30 or 40 Chinese commodities on display, there will be perhaps one from India. It is not a problem of concessions or incentives. Here, trade agreements play an important role in increasing the trade and investment between countries. So along the measures mentioned in the FTP, India has to push forward its FTA policies, encourage the private sector to open up and let them provide the incentives for more interaction between Indian and foreign companies. In this era of global competitiveness, there is a desperate need for Indian exporters to upgrade their technology and reduce their costs. Accordingly, an important element of the FTP is to help exporters upgrade technologically. It is hard to believe that we only realised very recently the importance of technology and importing needed capital to increase the quality and productivity of our manufacturing sector, as the new FTP proposes to promote the imports of capital goods for certain sectors. Whether the initiatives proposed in the new FTP, by which the government envisages to achieve such an ambitious outcome, will be sufficient is unclear. In particular, it is doubtful whether export-related duty exemptions and preferential treatment of economic agents are the best way to promote economic efficiency and growth. So there are many structural impediments to overcome before we redraft these occasional exercises of fiscal sops. On the one hand, across-the-board liberalisation efforts should be continued. On the other hand, duty exemptions and other privileges geared mainly towards export promotion are to be enhanced. In fact, if the first objective is realised, the second, at least when it comes to import duty exemptions, becomes redundant. It seems that across-theboard import duty reduction can be of more benefit economy-wide than selective duty exemptions in export sectors. Moreover, the larger question of making Indian exports more competitive needs a much more comprehensive set of policy responses. Such a policy response is not limited to one Ministry and therefore, the government as a whole needs to act in unison if these basic problems are to be addressed.