India has been centre of world trade from ancient times, with regard to current topic we

have analysed Indian trade relation from pre modern period 1700 AD. As per figures
produced by British Economist angus Madison india’s contributed roughly 27% world GDP in
1700 AD. After independence in 1950 India contribution reduced to just 3%. Its clearly
shows that India under british rule has limited diplomatic engagements and Indian economy
was working for british interest
After independence India proclaimed to become self-reliant socialist country with closed
economy. It adopted “Panchasheel” foreign policy with key features Mutual respect for
sovereignty and territorial integrity, Mutual non-aggression, Mutual non-interference in
domestic affairs, Equality and mutual benefit, Peaceful coexistence
However, in 1962 after Indo china war India changed its focus to Military modernization &
Strengthening of its strategic ties. As a result of that it developed relationship with USSR and
signed Indo–Soviet Treaty of Peace
After in 1990’s break-up of USSR made India to redefine their stand in international politics
and re-orient their foreign policy accordingly.
In 1991 Liberalization, privatization & globalization ) reforms emphazised on economic
diplomacy. . It resulted in opening up of foreign investment & trade, India focused on
strengthening economic ties with other countries through trade agreements, investment
deals & initiatives
In 1992 Foreign trade (development & regulation act – 1992) passed and Director General of
Foreign Trade incepted and attached to Ministry of Commerce and Industry. DGFT
responsible for formulating & implementing India' foreign trade policy with main objective
to promote India's exports
India's first formal trade policy released on 1st April 1997. After that policy is been
constantly updated as response to Many factors, such as global economic and political
developments, technical advances, and government regulations,
In today world India contribution to world GDP stands at 10% with significant development
in all sectors science, technology, manufacturing.

Need for trade policy

Regular import & export for the benefit of domestic economy
Appropriate Distribution of Labour-With the foreign trade policy, India can generate a
sphere of expertise and specialization over a worldwide platform. Foreign trade policy of
India can support in making merchandises at a lower cost
Stable pricing - With the assistance of Foreign trade policy, India can lead to parity of
pricing to guarantee a steady demand and supply scenario. A foreign trade policy of
India also allows us to import some products at the period of a natural calamity when
demand is huge. This makes sures the shortage is handled without taxing the consumer.
Consumer advantage - There is a consumer advantage by availing better quality and
quantity of goods. It also aids in elevating the standard of living particularly for
underdeveloped areas.

Importance of current trade policy

2 Trillion exports by 2030 – Targes 1 trillion on service & 1 trillion on merchandise exports
No sunset – Policy can be amended in real time

Ease of Doing Business: The policy aims to simplify and streamline the export process by
reducing paperwork and documentation requirements. This can help to reduce the time and
cost of exporting, and make it easier for exporters to do business.

Towns of Export Excellence Scheme: This scheme will provide financial and technical
assistance to smaller towns to develop their export potential. This can help to create jobs
and boost economic growth in these areas.

A preferential trade agreement (PTA) involves two or more partners agreeing to reduce
tariffs on an agreed number of tariff lines (products).
free trade agreement (FTA) also involves reducing or eliminating tariffs on items traded
between the partner countries;
Comprehensive Economic Cooperation Agreement (CECA) and Comprehensive Economic
Partnership Agreement (CEPA) are agreements which consist of an integrated package on
goods, services and investment, as well as trade facilitation and rule-making in areas such
as intellectual property, government procurement, technical standards and sanitary
and phytosanitary issues

Concerns in FTP
Merchandise export targeted at 1 trillion. India’s strength in Service. Merchandise export
targets may exploit country’s natural resources. In open market prices are decided by
demand not by actual cost required to made that product.

 kilogram of paddy requires about 15,000 litres of water.

 One pair of jeans requires 7600 litres of water

Cumulatively, India exported about 497 trillion litres of virtual water and imported about
238 trillion litres during these 10 years
India FTP should address the concerns of resource scared future world. Concept to classify
export merchandise as natural resource, derivative of natural resources and new measuring
scale has to introduced. Formulate policy to incentive exporters who has positive externality
on environment.