LIVE PROJECT

TRADE POLICY OF INDIA WITH RECENT CHANGES

SUBMITTED BY:
HARSH JAIN (5130)

ABSTRACT
We would like to express our heartfelt thanks to many people. This project is an effort to contribute towards achieving the desired objectives. In doing so, we have optimized all available resources and made use of some external resources, the interplay of which over a period of time led to the attainment of the set goals. It is our heartfelt honour to thank Prof. Chakravarthy faculty and project guide for his valuable guidance in successful completion of this project. We express our sincere thanks to all the people who directly or indirectly contributed in time, energy and knowledge to this effort. We would like to express my sincere gratitude to Prof. Chakravarthy for giving us the chance to explore the underlying topic of Trade policy of India with recent changes. I would also like to thank Mr Shubhash Kumar who has helped me for this project without him project could not have been accomplished.

OBJECTIVE
To study the composition and trends of trade policy of India with recent changes from 2009 - 2014.

INTRODUCTION
Before independence the trade policy followed by the British proved to be disastrous for India as it destroyed the indigenous industries in India and exports was mainly composed of primary products. Substantial changes have taken place in our trade policy after independence, which is indicated by the large proportion of non-primary products in exports. Imports Policy and Exports Policy together solve the Balance of Payment problem. The economy of India is the 12th largest economy in the world by market exchange rates and the 4th largest by Purchasing Power Parity (PPP). In 1990s, following the economic reforms from a Socialistinspired economy, the country began to experience swift economic growth, as market opened for international competition. In the 21st century, India is an emerging power with vast human and natural resources, and huge knowledge base. Economists predict that by 2020, India will be among the largest economies of the world.

India was under socialistic democratic-based policies from 1947 to 1991. The economy was characterized by regulations and public ownership, leading to corruption and slow growth rate. Since 1991 continuing economic liberalization has moved the economy towards a market based System. A revival of economic reforms and better economic policy in 2000s accelerated India's economic growth. In 2008 India established itself as the world's 2nd largest growing economy. However, year 2009 saw a significant slowdown in India's official GDP growth rate to 6.1% as well as the return of a large projected fiscal deficit of 10.3% of GDP. The international trade has been growing faster than world output indicates that the international market is expanding faster than the domestic markets. There are indeed many Indian firms too whose foreign business is growing faster than the domestic business. This is manifested/necessitated/ facilitated by the following facts: (a) The Competitive business Environment (b) Globalization (c) The universal liberalization Policy.

TRADE POLICY 2009

Foreign trade policy (2009 2014) organized by the CII, Anand Sharma, union minister for commerce and industry, govt. of India stated the new foreign trade policy 2009, attempts to diversify Indias exports products and markets. He said, the government has tried to use the available resources judiciously to focus on labour-intensive sectors. These sectors would help "create more jobs", while generating more resources in the economy, added Mr. Sharma. Mr. Sharma said, the Government is determined to reduce transaction costs for Indian exporters. The current policy has already reduced the application fees for exporters and the government will work to simplify export policies and procedures. Electronic trade is important and will be looked at in a time bound manner, added Mr. Sharma. Expansion of Market Linked Focus Products Scheme (MLFPS) to 13 new markets and 1700 products was the highlight of the new policy, opinioned Mr. Sharma. He also expressed hope that the new policy will help exporters to tide over the current slowdown.

HIGHLIGHTS OF THE NEW FOREIGN TRADE POLICY OF INDIA ARE AS UNDER:

 26 new markets have been added under Focus Market Scheme. These include 16 new markets in Latin America and 10 in Asia-Oceania.  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%.  Higher allocation for Market Development Assistance (MDA) and Market Access Initiative (MAI) schemes is being provided.

 (MLFPS) Market Linked Focus Product Scheme 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.

 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 made ups, knitted and crocheted fabrics, glass products, certain iron and steel products and certain articles of aluminum 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)  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.

TECHNOLOGY UPGRADATION
 To aid technological up gradation 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 Up gradation 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 recognized as Towns of Export Excellence for handicrafts; Kanpur Dewas and Ambur have been recognized as Towns of Export Excellence for leather products; and Malihabad for horticultural products.

EPCG SCHEMES
 To increase the life of existing plant and machinery, export obligation on import of spares, molds etc. under EPCG Scheme has been reduced to 50% of the normal specific export obligation.  Taking into account the decline in exports, the facility of Re-fixation of Annual Average Export Obligation for a particular financial year in which there is decline in exports from the country, has been extended for the 5 year Policy period 2009-14.

MARINE SECTOR
 Fisheries have been included in the sectors which are exempted from maintenance of average EO under EPCG Scheme, subject to the condition that Fishing Trawlers, boats, ships and other similar items shall not be allowed to be imported under this provision. This would provide a fillip to the marine sector which has been affected by the present downturn in exports.

 Additional flexibility under Target Plus Scheme (TPS) /Duty Free Certificate of Entitlement (DFCE) Scheme for Status Holders has been given to Marine sector.

GEMS AND JEWELRY SECTOR

 To neutralize duty incidence on gold Jewelry exports, it has now been decided to allow Duty Drawback on such exports.  A new facility to allow import on consignment basis of cut & polished diamonds for the purpose of grading/certification purposes has been introduced.  To promote export of Gems & Jewelry products, the value limits of personal carriage have been increased from US$ 2 million to US$ 5 million in case of participation in overseas exhibitions. The limit in case of personal carriage, as samples, for export promotion tours, has also been increased from US$ 0.1 million to US$ 1 million.

LEATHER SECTOR
 Leather sector shall be allowed re-export of unsold imported raw hides and skins and semi-finished leather from public bonded ware houses, subject to payment of 50% of the applicable export duty.  Enhancement of FPS rate to 2% significantly benefit the leather sector. would also

STABILITY AND CONTINUITY OF FOREIGN TRADE POLICY

 To impart stability to the Policy regime, Duty Entitlement Passbook (DEPB) Scheme is extended beyond 31-12-2009 till 31.12.2010.  Income Tax exemption to 100% EOUs and to STPI units under Section 10B and 10A of Income Tax Act has been extended for the financial year 2010-11 in the Budget 2009-10.

 The adjustment assistance scheme initiated in December, 2008 to provide enhanced ECGC cover at 95%, to the adversely affected sectors, is continued till March, 2010.

INDIA UNVEILS FOREIGN TRADE POLICY FOR NEXT 5 YEARS

 Union Commerce and Industry Minister Anand Sharma said capital goods will attract zero duty till Mar 2011 to encourage manufacturing.  Sharma said the immediate goal was to arrest decline in exports and to achieve 200 billion dollar export target by 2011.  He envisaged 15 percent growth for first two years and then 25 percent for the next three years.

He also said that with this India would be able to double its exports by 2014. He also set the target of doubling India's share in global trade by 2020.

CONCLUSION
In this live project of macroeconomics we find that there are some recent changes have been done in various sectors and it is in the process also because the trade policy period is about 5 years from 2009-2014. So, we havent got a data analysis on that project, but we get some information and by this information we put some data on various sectors.

DECLARATION
We hereby declare that the report on Trade policy of India with recent changes is written under the guidance of Prof. Chakravarthy. The empirical conclusion and finding in the report are based on the data collected by us and entire report is not a reproduction of any other resources.

BIBLIOGRAPHY
www.business.gov.in www.wikipedia.org www.commerce.nic.in