INDIA’S FOREIGN TRADE POLICY

2009-14

BY : GORAV BHALLA
What is Foreign Trade Policy?

 The Union Commerce Ministry, Government of

India announces the integrated Foreign Trade
Policy FTP in every five year

 This is also called EXIM policy.

 This policy is updated every year with some

modifications and new schemes. New schemes
come into effect on the first day of financial year
i.e. April 1, every year.
Foreign Trade Policy

 EXIM policy contains various policy and

schemes and decisions with respect to import
and exports from the country

FOREIGN TRADE POLICY BECOMES EXIM

POLICY ON 1992 (IT IS REGULATED BY
FOREIGN TRADE DEVELOPMENT ACT.1992)
Objectives of Foreign Trade Policy 2009-14

TO establish the framework for globalization.

To promote the productivity competiveness of indian industry.

To arrest and reverse declining trend of exports is the main aim of the
policy. This aim will be reviewed after two years.

2. To Double India's exports of goods and services by 2014.

3. To double India's share in global merchandise trade by 2020 as a long

term aim of this policy.
(India's share in Global merchandise exports was 1.45% in 2008.
HOW FTP WORKS?

 To encourage exports through a "mix of

measures including fiscal incentives,
institutional changes, procedural
rationalization and efforts for enhance
market access across the world and
diversification of export markets.
 To set in motion the strategies and policy
measures which catalyze the growth of
exports
Aim in General

 The policy aims at developing export

potential, improving export performance,
boosting foreign trade and earning valuable
foreign exchange.
 A fall in exports has led to the closure of
several small- and medium-scale export-
oriented units, resulting in large-scale
unemployment.
Targets OF FTP BETWEEN 2009-2014

 Export Target : $ 200

Billion for 2010-11

 Export Growth Target:

15 % for next two year
and 25 % thereafter.
NEW SCHEMES OF FTP:

EPCG SCHEME( EXPORT PROMOTION

CAPITAL GOODS)
 Obligation under EPCG scheme relaxed.
 To aid technological up gradation of export
sector, EPCG Scheme at Zero Duty has been
introduced.
 Export obligation on import of spares,
moulds etc. under EPCG Scheme has been
reduced by 50%.
Announcements for FPS, FMS, MLFPS:

 26 new markets added in this scheme.

 Incentives under FMS (FOCUS MARKET

SCHEME) raised from 2.5 % to 3 %

 Incentive available under Focus Product Scheme

(FPS) raised from 1.25% to 2%.

 Extra products included in the scope of benefits

under FPS
ANNOUNCEMENTS
 Market Linked Focus Product Scheme (MLFPS) expanded
by inclusion of products like pharmaceuticals, textile
fabrics, rubber products, glass products, auto
components, motor cars, bicycle and its parts.etc.

 6. Focus Product Scheme benefit extended for export of

‘green products 'and some products from the North East.

 7. A common simplified application form has been

introduced to apply for the benefits under FPS, FMS,
MLFPS.
Towns of Export Excellence (TEE)

 The following cities have been recognized as

towns of export excellence (TEE)

 Handicrafts : Jaipur, Srinagar and Anantnag

 Leather Products : Kanpur,Dewas and
Ambur
 Horticultural Products: Malihabad
Thrust Sectors

#Agricultural
# Handicrafts
# Handlooms
# Gems and Jewellery
# Leather
# Textile
Announcements for Gems & Jewellery Sector:

 Plan to establish "Diamond Bourse (s) with an

aim to make India and International Trading
Hub announced.
Support for Technological up-
gradation
 Zero duty EPCG scheme to give a boost to
technological up-gradation.
 Additional Towns of Export Excellence (TEEs)
announced viz.Barmer (Rajasthan)
Toys and Sports goods:
 Additional 2% bonus benefits over and above
the existing benefits under Focus Product
Scheme will significantly benefit the Toys and
Sports Goods Sector.
 40. Benefits under Zero duty EPCG schemes
will significantly promote technological up
gradation of Toys and Sports Goods sectors.
Announcements For Marine sector :

 Additionalflexibility under Target Plus

Scheme (TPS) / Duty Free Certificate of
Entitlement (DFCE) Scheme for the marine
sector.
Announcements for Pharma Exports :

 Pharma sector included under MLFPS for

countries in Africa and Latin America & some
countries in Oceania and Far East.
INDIA’S FOREIGN TRADE POLICY
2009-14
 . Duty Credit Scrips 
 Earlier the payment of customs duty for Export Obligation
(EO) shortfall under Advance Authorization , DFIA or EPCG
Authorization was allowed in cash only. Now this payment
can be done in the way of debit of Duty Credit scrips.
 
 Import of Restricted Items 
 Restricted Items can be imported now (as replenishment)
against transferred DFIAs (Duty Free Import Authorizations)
as the present DFRC (Duty Free Replenishment Card) scheme.

 
ANALYTICAL SECTION

Period - $ Growth Rate

1999-2000 10.85

2000-2001 21.01

2001-2002 -1.65

2002-2003 20.34

2003-2004 17.26
ANALYTICAL SECTION

 IN April-October 2010 EXPORT = 26.8% to

$121.4 billion.
 IN april –oct. imports 26% to $194.2 billion.
BUT

 Export Target : $ 200 Billion for 2010-11

and import substitution
MY OPINION

 REDUCTION IN DUMPING
(in international trade, the pricing of a
product below its cost of production)
EVERY COUNTRY FOLLOW THE PRINCIPLES
OF ANTI DUMPING.
 EXPORT MORE AND IMPORT LESS
 REDUCTION IN EXPORT PRODUCTS
.

THANKS