1. Explain the Forms of trade regula7on and Regula7on of FDI in India.

Ans : Like many other nations, India has managed its economic activity, safeguarded
home industries, and drawn in foreign investment by enacting numerous trade and regulations
controlling Foreign Direct Investment (FDI). The types of trade and foreign direct investment
regulation in India are explained as follows:

1. India's types of trade regulation include customs duties:

a) Justification: India levies customs taxes on exports and imports in order to control the
movement of products across its boundaries. The type of goods and the nation of origin
influence the prices.

2. GST, or the Goods and Services Tax:

a) Reason: Goods and services supply in India is subject to a comprehensive indirect tax
known as the Goods and Services Tax (GST). It brought uniformity and simplified the tax
structure by taking the place of several indirect taxes.

3. Licenses for Import and Export:

a) Explanation: The government may impose import or export restrictions on some things due
to trade regulations, national security concerns, or environmental factors. Additionally,
certain goods require licenses for import or export.

4. Trade Policy Abroad (FTP):

a) Justification: The Foreign Trade Policy presents the government's plans for boosting and
controlling India's exports. It consists of trade-related policies, export promotion initiatives,
and incentives.

5. Non-Dumping Obligations:

a) Explanation: When imports are priced less than their normal worth, India levies anti-
dumping penalties that hurt indigenous industries. The purpose of this policy is to shield
regional manufacturers from unfair competition.

6. Bank for Export-Import (EXIM Bank):

a) Justification: By offering financial support, export credit, and insurance to Indian importers
and exporters, the EXIM Bank of India promotes global trade.

7. India's Foreign Exchange Management Act (FEMA) governs the regulation of foreign
direct investment (FDI).

a) Justification: FEMA supervises capital flows and controls foreign exchange operations. It
offers FDI criteria, such as investment caps, sector-specific limitations, and compliance
standards.

8. Combined FDI Strategy:

a) Justification: The government publishes a comprehensive FDI policy outlining the
guidelines for foreign investment. To reflect modifications to FDI regulations in different
industries, it is updated on a regular basis.

9. Automatic Routes and Sectoral Caps:

a) Explanation: Foreign Direct Investment (FDI) restrictions are set for various sectors, and
investments made within these limitations can be done automatically without requiring prior
government permission. Nonetheless, government clearance can be necessary for some areas.

10. Government Acceptance of Sensitive Industries:

a) Explanation: FDI projects may need government approval above and beyond the set
limitations in areas deemed sensitive for reasons of national security or strategy.

11. FDI Promotion Organizations:

a) Explanation: By giving foreign investors information, direction, and support, organizations

such as Invest India and the Department for Promotion of Industry and Internal Trade
(DPIIT) contribute to the promotion and facilitation of FDI.

12. Guidelines for Technology Transfer:

a) Justification: Technology transfer regulations are in place to guarantee that foreign direct
investment (FDI) advances technology in India. Certain types of technology transfer might be
restricted.

13. Performance Standards:

a) Justification: Depending on the situation, foreign direct investment (FDI) may be subject to
performance requirements. These requirements may include a requirement for investors to
create jobs, source locally, or transfer technology.