INDIAN ECONOMY

FOREIGN TRADE POLICY 2015-2020

SUBMITTED TO: PROF. TANUSHREE MAZUMDAR
Team 05

F008 Upma Golyan

F015 Tavishi Verma

F018 Jonil Shah

F041 Nikhil Malik

F053 Deepansh Jagotra

F065 Chahat Mourya

INTRODUCTION OF FTP
The FTP- Foreign Trade Policy was brought in by the Government to accelerate the growth of the
Indian export of goods and services, create employment and increase value addition in the
country. The Government, with the implementation of this policy, pursues to develop the
services and manufacturing sectors.
Primary Focus Areas
With the introduction of FTP, the Government primarily wants to focus on adopting a twin strategy
of encouraging traditional & sunrise sectors of exports together with services. Further, it aims
to simplify the course of doing business.
Duration of the Policy
The Foreign Trade Policy (FTP) was introduced and implemented in the financial year of 2015-
16, and remained effective until the 31st of March, 2020. During the period, all the country’s
imports and exports was governed by the policy. The Government took the steps to prepare
India for being a significant partner in the global trade by 2020.
Difference from EXIM Policy
1. Five different schemes
1. Focus Product Scheme
2. Market Linked Focus Product Scheme
3. Focus Market Scheme
4. Agri Infrastructure Incentive Scrip
5. VKGUY
merged into a single unconditional scheme termed as Merchandise Export from India Scheme
(MEIS)
2. Serve from India Scheme, SFIS has been substituted by SEIS, Service Exports from India
Schemes so as to allow all the services provides across India have added benefits, instead of
just Indian Service Providers.
3. Scrips together with goods under both the above-mentioned schemes shall be fully transferable;
4. MEIS benefit to be computed on the basis of FOB value of the exports, whereas benefit under
SEIS to be computed based on the Net foreign exchange earned;
5. SEIS rates shall be 3% & 5%, depending on nature of industry notified;
6. Scrips under both the above-mentioned schemes can be used for the payment of the excise duty,
customs duty, and service act during procurement;
7. Certificates issued by CA/CS/CWA, etc. to be allowed to upload electronically (digitally
signed).
Current Trends in Indian Foreign Trade
Intense competition among countries, industries, and firms on a global level is a recent
development owed to the confluence of several major trends. Among these trends are:
1. Forced Dynamism:
International trade has become one of the major reasons of the current trend in India’s foreign
trade. As it has forced to succumb to trends that actually shapes the global cultural, political,
and economic environment. International trade is a non-static and complex topic, because of
the environment operating it as it is constantly changing. First of all, businesses are
continuously pushing the frontiers of economic growth, culture, technology, and politics which
also effect the global society & global economic context. Secondly, factors which are external
to international trade i.e. let’s say developments in science & information technology, are
constantly compelling international trade to amend how they operate.
2. Exports have become more diversified geographically now
When Liberalisation was introduced, India’s export was less diversified with only top 20 countries
making to the list for more than 80% of the total India’s export. During 1991-92, USA was the
leader in the export,16.4% share, followed by Japan’s 9.2% share, Russia (9.2%) and some of
the European countries. In 2016, top 20 export destinations for India accounted for 67% of the
total exports and today, top 10 export destinations for India account for 51.07% of total exports,
reflecting greater diversification.

3. Since liberalisation, the composition of exports has witnessed substantial change. There is
this structural shift experienced in India’s exports, which is taking a drift away from the
primary, agricultural & traditional exports for eg. Textiles saw a change towards more value
added manufactured & technology-based items like pharmaceuticals, refinery products,
engineering goods, etc. And now, India’s overall export basket is diversified with non-
traditional items & differential products
4. Recent export trends for major commodities
a. Engineering Goods

b. Petroleum Products

c. Chemicals and Chemical Products

d. Gems & Jewellery

 e. Textiles and Readymade Garments

5. Trends in imports

Issues in Implementation of FTP 2015-2020

• The substantial delays in issue of MEIS and SEIS scrips indicated failure of the
automated system in achieving the objective of simplification of procedures and ease
of doing business. (CAG Report 2020)
• The extension of MEIS benefits to E-commerce exports amounting to ₹5.52 crore was
delayed by almost four years due to delay in amending the regulations and
operationalization of E-commerce module
• Nothing was found on record to establish that grievance redressal system existed in
the online module of MEIS/SEIS and that any pendency analysis of MEIS/SEIS
grievances had been done so far by DGFT
• According to the WTO Subsidies and Countervailing Measures (SCM) Agreement, a
member is no longer eligible to give export subsidies if its per capita gross national
income (GNI) crosses the threshold of $1,000 consecutively for three years. So, India
technically was prohibited to give export subsidies
Challenges faced by India
1. Regional Competition: Better quality products from China, Vietnam (textile), Bangladesh at
cheaper prices have flooded the international markets
2. Lopsided taxation- Exporters have to pay the GST to get back the IGST and tax credits are
received back as refund even though it is an exempted sector.
3. Lack of support to domestic manufacturers- Unfavorable domestics policies of different
states hurt manufacturing of exportable products like after cow slaughter ban leather and
meat exports declined.
4. Quality issues - Phytosanitary norms imposed by countries especially European nations act
as a trade barrier for Indian exports for ex: milk products, pharmaceuticals, fruits (mango),
etc.
5. Increasing trend towards protectionism and the failure of international bodies like the
WTO to address the elephant in the room.
Areas of Improvement
1. Sectoral Export Promotion strategy could be employed with each department’s
separate action plan to promote export in their sector
2. Priority Sector Status Export Credit and enhancement of volume of export credit
3. Increase ease of doing business environment, logistic support eg. Niryat Mitra,
National Logistics Portal
4. Removal of unnecessary and unproductive regulatory hurdles restricting trade across
borders
5. Employing Barter Arrangements with specific countries
6. Collaborative export in partnership with other countries
7. Sector specific SEZ’s should be created with modern infrastructure
8. Enable India to have strong interconnections with the Global Value Chains
9. Special focus needs to be given to textile sector (highlighted by Economic Survey
2017-18 as a missed opportunity after falling Chinese exports were met with
increased exports from Bangladesh and Vietnam. Similarly, with Iron and Steel
Industry and the Pharmaceutical Industry where API’s (Active Pharmaceutical
Ingredients) are mainly sourced from China
10. Expedite implementation of projects like Bharatmala and Sagarmala (enable coast led
development) and TIES (to reduce logistic costs)
11. It must be ensured that entire system of administration of Foreign Trade Promotion
schemes is automated by rolling out fool proof system, duly mapped to Scheme
provisions and also leveraging information already available in linked / base systems
such as ICES, SEZ online etc., so that it becomes Single Source of Truth
Steps taken as part of FTP 2015-2020
1. The Government set up a logistics division
2. Constituted a National Trade Facilitation Committee under the Cabinet Secretary
3. Formulated a National Trade Facilitation Action Plan
4. Launched Trade Infrastructure for Export Scheme (TIES)
5.
India’s Current Scenario
1. India’s exports and imports saw a sharp contraction in line with the contraction in
global trade. The decline in imports outweighed that in exports – leading to smaller
trade deficit of US$ 9.8 billion as compared to US$ 49.2 billion in Q1 last year. India
registered a trade surplus in the month of June, 2020 after a gap of 18 years. With the
 unlocking of the economy from June onwards, a gradual revival in India’s
merchandise trade got underway
(EXHIBITS1)

2. The Government has started reviewing all the shortcomings of the different FTA’s
(Free Trade Agreements) signed with countries to reverse the increasing trend of trade
deficit (EXHIBIT 2)
3. In 2019-20 (April-November), petroleum products continued to be the largest
exported commodity, in value terms. In terms of growth, it was drug formulations,
biologicals which grew the highest between 2011-12 and 2019-20 (April-November)
(EXHIBIT 3)
4. India’s largest export destination country continues to be the United States of America
(USA) in 2019-20 (April-November), followed by United Arab Emirates (UAE),
China and Hong Kong. Between 2011-12 and 2019-20, India’s exports to USA grew
the highest (EXHIBIT 4)

5. Crude oil imports have a large presence in the import basket that correlates India’s
total imports with crude prices

6. Gold imports have also been high (EXHIBIT 5)

7. Crude petroleum had the largest share followed by gold and petroleum products
(EXHIBIT 6)
 Index
Ease of Doing Business
GIPC’s IP (Intellectual
Property) Index
Logistic Performance Index
World Competitiveness
Index
Enabling Trade Index
Global Innovation Index
Rank Comments
63 Improved rank in 7 out of 10
indicators
40 out of 53 countries Improvement in score
44 logistics costs in India are 13-15
per cent of the product cost, while
the global average is six per cent
43 out of 63 countries Improvement in high tech exports,
foreign currency reserves and
current account balance
102 out of 136 Deterioration of domestic market
countries access conditions
48 out of 131 Improvement in Knowledge and
countries Technology outputs and Market
sophistication

MACROECONOMIC IMPACT OF FTP 2015-20

Mid Term Review of FTP

1. MEIS incentives for ready Made Garments and Made ups increased from 2 to 4% (2743 Cr)
2. SEIS incentives increased by 2% (1140 Cr)
3. Validity of Duty Credit Scrips increased from 18 months to 24 months. GST rate decreased to
0 from 12%
4. Self-Ratification Scheme introduced to allow duty free inputs for export production
5. Small improvement in Ease of Trading across Borders
6. New Logistics Division created
7. Second Hand Goods imported for repair/refurbishing/re-conditioning have been made free
8. Working Capital blockage of exporters due to upfront payment of GST addressed under the
Export Promotion for Capital Goods Scheme (EPCG)
9. Special Package for employment generation in Leather and footwear sector (share in GDP
decreased from 7.7% to 1.9% from FY 92 to FY17)

TOTAL EXPORTS AND IMPORTS:

According to data from the Ministry of Commerce and Industry, India's total exports (both goods
and services) totaled US$ 304.25 billion between April and November 2020, while imports
totaled US$ 290.66 billion. In 2020-21, merchandise exports totaled US$ 173.66 billion, while
imports totaled US$ 215.69 billion. For 2020-21, the estimated value of services export and
import was US$ 130.60.
Between April and November 2020, India had a trade surplus of US$ 13.59 billion.
FTP 2015-20 objective of increasing the exports to $900 billion remains far from satisfactory.
Figure_Total Exports of goods and services (US$) (2015-2019) (source: World Bank)

CURRENT ACCOUNT DEFICIT

The trends see that the current account deficit has reduced from 2015 to 2019. This is a positive
change.

GDP AND PER CAPITA INCOME: Over the last two decades, the integration of the domestic
economy through the twin channels of trade and capital flows has accelerated, with India's
GDP reaching Rs. 203.39 trillion in 2019–20*. At the same time, per capita income nearly
tripled during this period. The growth of India's trade and external sector had a major impact
on GDP and per capita income.

EXCHANGE RATE: The exchange rate has seen substantial two-way movements with
significant volatility in recent years, owing primarily to global spillovers. The rupee has
traded in a narrow range so far in 2019-20, with modest appreciation in Q1 giving way to
some depreciation in August and the first half of September, exacerbated by the September
14, 2019 drone attacks on Saudi oil facilities.
“A key macro-economic variable critical to competitiveness and prospects for export growth is
the exchange rate…..If the nominal exchange rate stays steady and the rate of inflation in
India is higher than that in the rest of the world (as has been the case for the last decade) the
real exchange rate appreciates. The competitiveness of exports is eroded by the effective
exchange rate appreciation of the rupee” – Foreign Trade Policy (FTP for 2015-20, page 12).
EMPLOYMENT: The Indian government, according to Mr Piyush Goyal, Minister of Commerce
and Industry and Railways, is eager to increase exports and provide more jobs for young,
talented, and well-educated people, as well as semi-skilled and unskilled workers. The data
for employment growth due to the policy remains unavailable.

CAPITAL INFLOWS: According to RBI data, India's foreign exchange reserve was Rs. 42.75
trillion (US$ 581.13 billion) as of December 18, 2020.

CAPITAL FORMATION IN INDIA

International trade helps a country in attracting investments and increasing the capital formation
in the country. As real income grows, so does the capacity to save as a result of more efficient
resource allocation associated with international trade. Furthermore, access to foreign
markets makes it profitable to implement more advanced production methods by allowing
economies of scale.
We can see from the graph that the gross capital formation in India has increased since 2015.

FURTHER IMPACT ON THE EXTERNAL SECTOR UNDER FTP 2015-20 & DEALS
UNDERTAKEN WITH THE REST OF THE WORLD
1. The Union Cabinet accepted the Central Electricity Regulatory Commission's plan to
sign a Memorandum of Understanding (MoU) between India's CERC and the United
States' Federal Energy Regulatory Commission (FERC) to increase cross-border
cooperation in the electricity sector on December 16, 2020.
2. The Union Cabinet approved the Securities and Exchange Board of India's (SEBI)
plan to sign a bilateral MoU between SEBI and Luxembourg's Commission de
Surveillance du Secteur Financier (CSSF) to increase cross-border cooperation in the
securities sector on December 9, 2020.
3. The Ministry of Road Transport and Highways and the Federal Ministry of Climate
Action, Environment, Energy, Mobility, Innovation and Technology of the Republic
of Austria signed an MoU on Technology Cooperation in the Road Infrastructure
Sector on December 9, 2020.
4. The Union Cabinet approved the MoU between India and Cambodia on cooperation
in the fields of health and medicine on October 29, 2020. The Memorandum of
Understanding will be valid for five years.
5. The Electronics & Computer Software Export Promotion Council (ESC) of India and
the Mexican Chamber of Electronics, Telecommunications, and Information
 Technologies (CANIETI) signed a Memorandum of Understanding in October 2020
to further strengthen bilateral trade between India and Mexico through cooperation in
sectors such as pharmaceuticals, medical equipment, healthcare, agro-products,
fisheries, and food production.
6. On October 6, 2020, the Indian Sign Language Research and Training Center-
ISLRTC (a national institute under the Ministry of Social Justice and Empowerment's
Department of Empowerment of Persons with Disabilities) and NCERT (a national
institute under the Ministry of Education) signed an MoU to make educational
materials available to children with hearing disabilities.

CONCLUSION

India is currently regarded as one of the world's most important economic players. Its trade
policies, government reforms, and innate economic strengths have helped it to become one of
the world's most sought-after foreign investment destinations. Furthermore, technological and
infrastructural growth throughout the country bodes well for the trade and economic sectors
in the coming years.
The Indian government has been working on key agreements with the governments of Japan,
Australia, and China in order to increase their contributions to the country's economic
development and global market growth.
By 2025, India's goods and services exports to Australia will reach US$ 15 billion, and US$ 35
billion by 2035.

COVID-19 Pandemic and Indian Trade

1. Exports fell over 60% worst in 30 years (outbound shipment $10.4 billion)
2. Imports decreased by 59% to $17.1 billion
3. 28 out of 30 sectors (exceptions: Pharma and Iron) saw decline in exports
4. Trade deficit narrowed to $6.8 billion
5. Minor Trade surplus in goods in June 2020 first time in 18 years ($800 million)
6. Services surplus of $6.84 billion (export $16.48 billion and import $9.64 billion)
7. Combined surplus of $7.64 billion

The way forward should be to take steps to simplify trade processes and promote trade by
speeding up the transfer of goods, their release and clearance, including goods in transit, and
facilitating the exchange of services. Interventions to maintain and improve the efficiency of
logistics operations are also essential for avoiding major disruptions to distribution networks, and
thus regional and global value chains. These measures would help to alleviate the COVID-19-
related economic downturn and aid in the eventual recovery. Trade helps contain the pandemic and
treat those who are affected by supplying countries with basic medical goods (including material
inputs for their production) and services, as well as providing relevant inputs to the sector and
sustaining economic activity in the face of a global recession and disruption to regional and global
value chains. The openness of trade policy must be maintained. Regional trade agreements with
the EU, the United States, Australia, and other nations should be prioritised in order to achieve
market access to these countries and increase foreign trade. Non-tariff barriers are the most
significant impediment to open trade, and they must be addressed.
To boost exports and make the MSME sector competitive and on par with international firms
in global supply chains, radical changes are required. Simple export incentives are insufficient, and
some major stimulus packages must be extended to different export sectors to help them recover
from the pandemic's losses. A good trade policy, it is said, starts at home. A fast turnaround would
be possible if the government focused on the industry.
REFERENCES
1. FOREIGN TRADE POLICY 2015-20: KEY HIGHLIGHTS, IBEF
(https://www.ibef.org/pages/foreign-trade-policy-2015-20-key-highlights)
2. CAG Audit Report 2020
(https://cag.gov.in/uploads/download_audit_report/2020/AR%205%200f%202020_%
20Union_Eng-05f80903e694841.51527232.pdf)
3. The Dollar Business, 2018; “FTP MIDTERM REVIEW: BULLISHLY SERIOUS.
BARELY SUFFICIENT.”, Aamir H. Kaki
4. Economic Survey 2019-2020

EXHIBIT 1
Exhibit 2

EXHIBIT 3
EXHIBIT 4

EXHIBIT 5
EXHIBIT 6

*********
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Introduction of FTP
The FTP­ Foreign Trade Policy was brought in by the Government to accelerate the growth of the Indian export of
goods and services, create employment and increase value addition in the country. The Government, with the
implementation of this policy, pursues to develop the services and manufacturing sectors. 
Primary Focus Areas
With the introduction of FTP, the Government primarily wants to focus on adopting a twin strategy of encouraging
traditional & sunrise sectors of exports together with services. Further, it aims to simplify the course of doing business.
Duration of the Policy
The Foreign Trade Policy (FTP) was introduced and implemented in the financial year of 2015­16, and remained
effective until the 31st of March, 2020. During the period, all the country’s imports and exports was governed by the
policy. The Government took the steps to prepare India for being a significant partner in the global trade by 2020.
Difference from EXIM Policy
1. Five different schemes 
1. Focus Product Scheme
2. Market Linked Focus Product Scheme
3. Focus Market Scheme
4. Agri Infrastructure Incentive Scrip
5. VKGUY 
merged into a single unconditional scheme termed as Merchandise Export from India Scheme (MEIS)
2. Serve from India Scheme, SFIS has been substituted by SEIS, Service Exports from India Schemes so as to allow
all the services provides across India have added benefits, instead of just Indian Service Providers. 
3. Scrips together with goods under both the above­mentioned schemes shall be fully transferable;
4. MEIS benefit to be computed on the basis of FOB value of the exports, whereas benefit under SEIS to be computed
based on the Net foreign exchange earned;
5. SEIS rates shall be 3% & 5%, depending on nature of industry notified;
6. Scrips under both the above­mentioned schemes can be used for the payment of the excise duty, customs duty, and
service act during procurement;
7. Certificates issued by CA/CS/CWA, etc. to be allowed to upload electronically (digitally signed).
Current Trends in Indian Foreign Trade
Intense competition among countries, industries, and firms on a global level is a recent development owed to the
confluence of several major trends. Among these trends are:
1. Forced Dynamism:
International trade has become one of the major reasons of the current trend in India’s foreign trade. As it has forced to
succumb to trends that actually shapes the global cultural, political, and economic environment. International trade is a
non­static and complex topic, because of the environment operating it as it is constantly changing. First of all,
businesses are continuously pushing the frontiers of economic growth, culture, technology, and politics which also
effect the global society & global economic context. Secondly, factors which are external to international trade i.e. let’s
say developments in science & information technology, are constantly compelling international trade to amend how they
operate.
 Page 2
2. Exports have become more diversified geographically now
When Liberalisation was introduced, India’s export was less diversified with only top 20 countries making to the list for
more than 80% of the total India’s export. During 1991­92, USA was the leader in the export,16.4% share, followed by
Japan’s 9.2% share, Russia (9.2%) and some of the European countries. In 2016, top 20 export destinations for India
accounted for 67% of the total exports and today, top 10 export destinations for India account for 51.07% of total
exports, reflecting greater diversification.

3. Since liberalisation, the composition of exports has witnessed substantial change. There is this structural shift
experienced in India’s exports, which is taking a drift away from the primary, agricultural & traditional exports for eg.
Textiles saw a change towards more value added manufactured & technology­based items like pharmaceuticals,
refinery products, engineering goods, etc. And now, India’s overall export basket is diversified with non­traditional items
& differential products 

4. Recent export trends for major commodities
a. Engineering Goods

b. Petroleum Products

c. Chemicals and Chemical Products

d. Gems & Jewellery

e. Textiles and Readymade Garments

5. Trends in imports 

Issues in Implementation of FTP 2015­2020
• The substantial delays in issue of MEIS and SEIS scrips indicated failure of the automated system in achieving the
objective of simplification of procedures and ease of doing business. (CAG Report 2020)
• The extension of MEIS benefits to E­commerce exports amounting to ₹5.52 crore was delayed by almost four years
due to delay in amending the regulations and operationalization of E­commerce module
• Nothing was found on record to establish that grievance redressal system existed in the online module of MEIS/SEIS
and that any pendency analysis of MEIS/SEIS grievances had been done so far by DGFT
• According to the WTO Subsidies and Countervailing Measures (SCM) Agreement, a member is no longer eligible to
give export subsidies if its per capita gross national income (GNI) crosses the threshold of $1,000 consecutively for
three years. So, India technically was prohibited to give export subsidies
Challenges faced by India
1. Regional Competition: Better quality products from China, Vietnam (textile), Bangladesh at cheaper prices have
flooded the international markets
2. Lopsided taxation­ Exporters have to pay the GST to get back the IGST and tax credits are received back as refund
even though it is an exempted sector.
3. Lack of support to domestic manufacturers­ Unfavorable domestics policies of different states hurt manufacturing of
exportable products like after cow slaughter ban leather and meat exports declined.
4. Quality issues ­ Phytosanitary norms imposed by countries especially European nations act as a trade barrier for
Indian exports for ex: milk products, pharmaceuticals, fruits (mango), etc.
5. Increasing trend towards protectionism and the failure of international bodies like the WTO to address the elephant in
the room.

Sources Similarity

5 Major Current Trends in Foreign Trade

Intense competition among countries, industries, and firms on a global level is a recent development owed to the
confluence of several major trends. Among these trends are: 1) Forced Dynamism: International trade is forced to
succumb to trends that shape the global political, cultural, and economic environment. International trade is a 7%
complex topic, because the environment it operates in is ...

https://www.yourarticlelibrary.com/foreign­trade/5­major­current­trends­in­foreign­trade/5896

FTP Midterm Review: Bullishly Serious. Barely Sufficient.

According to the WTO Subsidies and Countervailing Measures (SCM) Agreement, a member is no longer eligible to
give export subsidies if its per capita gross national income (GNI) crosses the threshold of $1,000 consecutively for 4%
three years.

https://www.thedollarbusiness.com/magazine/ftp­midterm­review­bullishly­serious­barely­sufficient/46167
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Areas of Improvement
1. Sectoral Export Promotion strategy could be employed with each department’s separate action plan to promote
export in their sector
2. Priority Sector Status Export Credit and enhancement of volume of export credit
3. Increase ease of doing business environment, logistic support eg. Niryat Mitra, National Logistics Portal
4. Removal of unnecessary and unproductive regulatory hurdles restricting trade across borders
5. Employing Barter Arrangements with specific countries
6. Collaborative export in partnership with other countries
7. Sector specific SEZ’s should be created with modern infrastructure
8. Enable India to have strong interconnections with the Global Value Chains
9. Special focus needs to be given to textile sector (highlighted by Economic Survey 2017­18 as a missed opportunity
after falling Chinese exports were met with increased exports from Bangladesh and Vietnam. Similarly, with Iron and
Steel Industry and the Pharmaceutical Industry where API’s (Active Pharmaceutical Ingredients) are mainly
sourced from China
10. Expedite implementation of projects like Bharatmala and Sagarmala (enable coast led development) and TIES (to
reduce logistic costs)
11. It must be ensured that entire system of administration of Foreign Trade Promotion schemes is automated by rolling
out fool proof system, duly mapped to Scheme provisions and also leveraging information already available in linked /
base systems such as ICES, SEZ online etc., so that it becomes Single Source of Truth
Steps taken as part of FTP 2015­2020
1. The Government set up a logistics division
2. Constituted a National Trade Facilitation Committee under the Cabinet Secretary
3. Formulated a National Trade Facilitation Action Plan
4. Launched Trade Infrastructure for Export Scheme (TIES)
5. 
India’s Current Scenario
1. India’s exports and imports saw a sharp contraction in line with the contraction in global trade. The decline in
imports outweighed that in exports â€“ leading to smaller trade deficit of US$ 9.8 billion as compared to US$ 49.2 billion
in Q1 last year. India registered a trade surplus in the month of June, 2020 after a gap of 18 years. With the unlocking
of the economy from June onwards, a gradual revival in India’s merchandise trade got underway

2. The Government has started reviewing all the shortcomings of the different FTA’s (Free Trade Agreements)
signed with countries to reverse the increasing trend of trade deficit

3. In 2019­20 (April­November), petroleum products continued to be the largest exported commodity, in value terms. In
terms of growth, it was drug formulations, biologicals which grew the highest between 2011­12 and 2019­20 (April­
November)
 Page 2
4. India’s largest export destination country continues to be the United States of America (USA) in 2019­20 (April­
November), followed by United Arab Emirates (UAE), China and Hong Kong. Between 2011­12 and 2019­20,
India’s exports to USA grew the highest

5. Crude oil imports have a large presence in the import basket that correlates India’s total imports with crude
prices

6. Gold imports have also been high

7. Crude petroleum had the largest share followed by gold and petroleum products

Index Rank Comments
Ease of Doing Business 63 Improved rank in 7 out of 10 indicators
GIPC’s IP (Intellectual Property) Index 40 out of 53 countries Improvement in score
Logistic Performance Index 44 logistics costs in India are 13­15 per cent of the product cost, while the global average is
six per cent
World Competitiveness Index 43 out of 63 countries Improvement in high tech exports, foreign currency reserves and
current account balance
Enabling Trade Index 102 out of 136 countries Deterioration of domestic market access conditions
Global Innovation Index 48 out of 131 countries Improvement in Knowledge and Technology outputs and Market
sophistication
MACROECONOMIC IMPACT OF FTP 2015­20
Mid Term Review of FTP
1. MEIS incentives for ready Made Garments and Made ups increased from 2 to 4% (2743 Cr)
2. SEIS incentives increased by 2% (1140 Cr)
3. Validity of Duty Credit Scrips increased from 18 months to 24 months. GST rate decreased to 0 from 12%
4. Self­Ratification Scheme introduced to allow duty free inputs for export production
5. Small improvement in Ease of Trading across Borders
6. New Logistics Division created
7. Second Hand Goods imported for repair/refurbishing/re­conditioning have been made free
8. Working Capital blockage of exporters due to upfront payment of GST addressed under the Export Promotion for
Capital Goods Scheme (EPCG)
9. Special Package for employment generation in Leather and footwear sector (share in GDP decreased from 7.7% to
1.9% from FY 92 to FY17)
TOTAL EXPORTS AND IMPORTS:
According to data from the Ministry of Commerce and Industry, India's total exports (both goods and services) totaled
US$ 304.25 billion between April and November 2020, while imports totaled US$ 290.66 billion. In 2020­21,
merchandise exports totaled US$ 173.66 billion, while imports totaled US$ 215.69 billion. For 2020­21, the estimated
value of services export and import was US$ 130.60.
Between April and November 2020, India had a trade surplus of US$ 13.59 billion.
FTP 2015­20 objective of increasing the exports to $900 billion remains far from satisfactory. 

Figure_Total Exports of goods and services (US$) (2015­2019) (source: World Bank)
CURRENT ACCOUNT DEFICIT
The trends see that the current account deficit has reduced from 2015 to 2019. This is a positive change.

GDP AND PER CAPITA INCOME: Over the last two decades, the integration of the domestic economy through the twin
channels of trade and capital flows has accelerated, with India's GDP reaching Rs. 203.39 trillion in 2019–20*. At the
same time, per capita income nearly tripled during this period. The growth of India's trade and external sector had a
major impact on GDP and per capita income.
EXCHANGE RATE: The exchange rate has seen substantial two­way movements with significant volatility in recent
years, owing primarily to global spillovers. The rupee has traded in a narrow range so far in 2019­20, with modest
appreciation in Q1 giving way to some depreciation in August and the first half of September, exacerbated by the
September 14, 2019 drone attacks on Saudi oil facilities.

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External Sector â€“ Economic Survey 2019­2020

In terms of growth, it was drug formulations, biologicals which grew the highest between 2011­12 and 2019­20
(April­November) (Figure 9). 3.16 India’s largest export destination country continues to be the United States of 9%
America (USA) in 2019­20 (April­November), followed by United Arab Emirates (UAE), China and Hong Kong.

https://taxguru.in/finance/external­sector­economic­survey­2019­2020.html

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Basic Chemicals, Cosmetics & Dyes Export ... ­ Chemexcil
Mar 22, 2018 â€” Jhansi Castle, 4th Floor, 7, Cooperage Road, Mumbai ­ 400 001. ... New trust based Self
Page 3
Ratification Scheme was introduced to allow duty free inputs for export production under duty exemption scheme
with a self­declaration.

https://chemexcil.in/circulars/dgft­­­amendments­in­handbook­of­procedures­2015­20­­­­para­4.07a­self­­­
ratification­scheme­/3336/cca1404702f1cb7f1ec094fab1cc0504.html
 Page 1

PLAGIARISM SCAN REPORT

Words 776 Date March 22,2021

Characters 5288 Excluded URL

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Content Checked For Plagiarism

EMPLOYMENT: The Indian government, according to Mr Piyush Goyal, Minister of Commerce and Industry and
Railways, is eager to increase exports and provide more jobs for young, talented, and well­educated people, as well as
semi­skilled and unskilled workers. The data for employment growth due to the policy remains unavailable. 
CAPITAL INFLOWS: According to RBI data, India's foreign exchange reserve was Rs. 42.75 trillion (US$ 581.13 billion)
as of December 18, 2020.
CAPITAL FORMATION IN INDIA
International trade helps a country in attracting investments and increasing the capital formation in the country. As real
income grows, so does the capacity to save as a result of more efficient resource allocation associated with
international trade. Furthermore, access to foreign markets makes it profitable to implement more advanced production
methods by allowing economies of scale. 
We can see from the graph that the gross capital formation in India has increased since 2015. 

FURTHER IMPACT ON THE EXTERNAL SECTOR UNDER FTP 2015­20 & DEALS UNDERTAKEN WITH THE REST
OF THE WORLD
1. The Union Cabinet accepted the Central Electricity Regulatory Commission's plan to sign a Memorandum of
Understanding (MoU) between India's CERC and the United States' Federal Energy Regulatory Commission (FERC) to
increase cross­border cooperation in the electricity sector on December 16, 2020.
2. The Union Cabinet approved the Securities and Exchange Board of India's (SEBI) plan to sign a bilateral MoU
between SEBI and Luxembourg's Commission de Surveillance du Secteur Financier (CSSF) to increase cross­border
cooperation in the securities sector on December 9, 2020.
3. The Ministry of Road Transport and Highways and the Federal Ministry of Climate Action, Environment, Energy,
Mobility, Innovation and Technology of the Republic of Austria signed an MoU on Technology Cooperation in the Road
Infrastructure Sector on December 9, 2020.
4. The Union Cabinet approved the MoU between India and Cambodia on cooperation in the fields of health and
medicine on October 29, 2020. The Memorandum of Understanding will be valid for five years.
5. The Electronics & Computer Software Export Promotion Council (ESC) of India and the Mexican Chamber of
Electronics, Telecommunications, and Information Technologies (CANIETI) signed a Memorandum of Understanding in
October 2020 to further strengthen bilateral trade between India and Mexico through cooperation in sectors such as
pharmaceuticals, medical equipment, healthcare, agro­products, fisheries, and food production.
6. On October 6, 2020, the Indian Sign Language Research and Training Center­ISLRTC (a national institute under the
Ministry of Social Justice and Empowerment's Department of Empowerment of Persons with Disabilities) and NCERT
(a national institute under the Ministry of Education) signed an MoU to make educational materials available to children
with hearing disabilities.
CONCLUSION
India is currently regarded as one of the world's most important economic players. Its trade policies, government
reforms, and innate economic strengths have helped it to become one of the world's most sought­after foreign
investment destinations. Furthermore, technological and infrastructural growth throughout the country bodes well for the
trade and economic sectors in the coming years.
The Indian government has been working on key agreements with the governments of Japan, Australia, and China in
 Page 2
order to increase their contributions to the country's economic development and global market growth.
By 2025, India's goods and services exports to Australia will reach US$ 15 billion, and US$ 35 billion by 2035.
COVID­19 Pandemic and Indian Trade
1. Exports fell over 60% worst in 30 years (outbound shipment $10.4 billion)
2. Imports decreased by 59% to $17.1 billion
3. 28 out of 30 sectors (exceptions: Pharma and Iron) saw decline in exports
4. Trade deficit narrowed to $6.8 billion
5. Minor Trade surplus in goods in June 2020 first time in 18 years ($800 million)
6. Services surplus of $6.84 billion (export $16.48 billion and import $9.64 billion)
7. Combined surplus of $7.64 billion
The way forward should be to take steps to simplify trade processes and promote trade by speeding up the transfer of
goods, their release and clearance, including goods in transit, and facilitating the exchange of services. Interventions to
maintain and improve the efficiency of logistics operations are also essential for avoiding major disruptions to
distribution networks, and thus regional and global value chains. These measures would help to alleviate the COVID­
19­related economic downturn and aid in the eventual recovery.
To boost exports and make the MSME sector competitive and on par with international firms in global supply chains,
radical changes are required. Simple export incentives are insufficient, and some major stimulus packages must be
extended to different export sectors to help them recover from the pandemic's losses. A good trade policy, it is said,
starts at home. A fast turnaround would be possible if the government focused on the industry.

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UiB to cooperate with Japanese research institute | News ...

Jun 5, 2018 — ... publish material appropriate to, or resulting from, any collaborative activities. The Memorandum of
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