The document discusses India's foreign trade policy. It outlines the objectives of the foreign trade policy for 2009-2014, which include arresting the decline in exports and achieving annual export growth targets of 15% by 2013 and 25% by 2014. It also discusses India's export and import controls, composition of exports and imports, regional trade agreements, and various export promotion measures implemented by the Indian government like incentives, institutional support, and special economic zones.

1. Presented By:
Samarth Gupta
18MBAIB14
India’s Foreign and Trade Policy
International Centre for Cross
Cultural Research & Human
Resource Management

2. Recent Trends in India’s
Foreign Trade

3. What is Foreign Trade Policy?
• Union Commerce Ministry, GoI announces integrated FTP every
five year also called EXIM policy.
• policy updated every year with some modifications & new
schemes.
• FTP which was announced on August 28, 2009 is an integrated
policy for the period 2009-14.

4. Foreign Trade Policy 2009-14
Short Term Objectives:
• arrest and reverse the declining trend of exports.
• provide support to those sectors which have been hit badly by
recession.
Medium term Policy Objectives :
• achieve an Annual Export growth of 15% by March 2013.
• achieve Annual Export growth of around 25% by 2014.
Long Term Objective :
• doubling India’s share in Global Trade by 2020.

5. Targets
• Export Target : $ 350 Billion for 2012-13
• Export Growth Target: 15 % for next two year and
25 % thereafter.

6. Import/Export Controls
IMPORTS:
• Around 5% Tariff Lines are under Import Controls.
• 11600 Tariff Lines are free for import.
• Restrictions removed over the next 10 years, removing almost all the
Quantitative Restrictions.
• Presently:
 Prohibited items - 53 Lines
 Restricted items - 485 Lines
 State Trading Items - 33 Lines.

7. Import/Export Controls
EXPORTS:
• Controls primarily on account of security, public health, morals,
exhaustible resources and environment grounds.
 Prohibited items - 59
 Restricted items - 155
 State Trading Items - 12
• Restrictions fall under two Categories:-
 Special provision for these items under Weapons of Mass Destruction
Act, 2005.
 Export Facilitation Committee looks into applications for license for
these items.
{Special chemical ,organisms, materials, equip. & tech.}

8. Highlights
• Q1 of 2012-13, exports stood at US$ 75.2 bn and showed a
decline of 1.7 per cent as against an increase of 36.4 per cent
during Q1 of 2011-12.
• Q1 of 2012-13, imports declined by 6.1 percent over the
corresponding quarter of 2011-12 and stood at US$ 115.3
billion.
• Lower growth in POL imports at 5.5 percent during Q1 of
2012-13 as compared with 52.5 percent during Q1 of 2011-12.

9. Highlights
• Imports of gold and silver, US$ 9.4 bn during Q1 of 2012-13
were 48.4 per cent lower than that in Q1 of 2011-12.
• Non-oil non-gold imports during Q1 of 2012-13 at US$ 65.3
bn recorded a decline of 2.9 per cent as compared to an
increase of 18.9 per cent in Q1 of preceding year.
• Trade deficit during Q1 of 2012-13 stood lower at US$ 40.1
bn as compared with US$ 46.2 bn during Q1 of 2011-12.

10. India’s Foreign Trade
•growth is uncertain in coming months, given the worsening global
macroeconomic outlook and high interest rate in the domestic market.
•During April-Sept 2011, India's imports expanded by 32.4% to $ 233.5
billion. The trade deficit during the April-Sept’ 2011 period stood at $ 73.5
billion. Increasing Trade Deficit further depreciates Rupee.
•depreciation of rupee will also push up cost of imports leading to wider
trade deficit in coming times.

14. Export/Import Share of India as (%)
of GDP

15. Exports of Principal Commodities

16. Imports of Principal Commodities

17. India's Exports to Principal Regions

18. India's Imports from Principal Regions

19. India’s Foreign Trade

20. Last 10 Years India’s Export/Import
Performance

22. Composition Of India’s Foreign Trade
• Composition of Exports

23. Agricultural and Allied Products
• 15% share in exports
• Top items of agricultural exports include:
- Fish Products
- Rice
- Oil Cakes
- Fruits and Vegetables

24. Ores and Minerals
• 12.3% share in exports.
Manufactured Goods
• 61.3% share in exports.
- Include: Engineering Goods
Gems and Jewellery
Chemical and Allied Products
Readymade Garments

25. Minerals Fuels and Lubricants
• 18.3% share in exports
• There has been improvement in the exports of mineral
fuels and lubricant both in terms of value and in terms
of %.

26. Composition of Imports

27. • Petroleum Products
31.7% share in Imports.
• Capital Goods
20.3% share in Imports.
• Pearls and Precious Stones
6.2% share in Imports.
• Iron and Steel
2.4% share of Imports.
• Fertilizers
2.4% share of Imports.

28. Balance of Payment Situation

29. CURRENT BALANCE of PAYMENT SITUATION

30. Regional Trade Agreements signed by
India

32. THE CONCEPT OF EXPORT PROMOTION
All national governments have established institutional set-
ups to support export activities.
The major objective of export promotion programmes is to
create awareness about exports and make the people
understand that it is one of the most crucial instruments of
growth and market expansion.
A non-exporter needs to be motivated by making him or her
aware of the international marketing opportunities.

33. A first-time exporter has to be assisted in finding export
marketing opportunities and may be supported on matters
related to export policy, procedures and documentations.
An exporters consistently attempt to explore ways to
improve their international marketing operations and need
to be assisted by way of trade fairs, buyer sellers meet, and
market promotion programmes.
The export promotion programmes initiated by the
government are in the form of public policy measures.

34. ROLE OF EXPORT PROMOTION INSTITUTIONS IN IM
The export promotion organizations(EPOs) are meant to assist
an international marketing manager to identify overseas
market opportunities, product and packaging requirements,
the pricing patterns, identifying IM channels, and marketing
opportunities.
Statutory requirements, such as registration-cum-membership
certificates(RCMCs), quota administration , and disbursement
of incentives through promotion organizations, make it
necessary for the marketers to approach these organizations.

35. INSTITUTIONAL SET-UP FOR EXPORT PROMOTION IN INDIA
In order to provide guidance and assistance to an exporter, the
Government of India has setup several institutions. The institutional
set-up for export promotion in India can be divided into six
different tires:
1. Department of commerce
2. Advisory Bodies
3. Commodity Organizations
4. Service Organizations
5. Government Trading Organizations
6. State Export Promotion Agencies

36. SERVICE INSTITUTES
 Indian institute of foreign trade
 Indian council of arbitration
 India trade promotion organization
 National centre for trade information
 Export-credit guarantee corporation
 Export import bank of India
 Indian institute of packing
 Federation of Indian export org.

37. EXIM Policy
• Accelerating the country’s transition to a globally oriented
vibrant economy with a view to derive maximum benefits
from expanding global market opportunities;
• Stimulating sustained economic growth
• Enhancing the technological strength and efficiency
• Encouraging the attainment of internationally accepted
standards of quality
• Providing consumers with good quality products and services
at reasonable prices.

38. General provisions regarding export import
• Exports and Imports free unless regulated
• Compliance with Laws
• Interpretation of Policy
• Procedure:
• Exemption from Policy/ Procedure
• Principles of Restriction
• Restricted Goods
• Terms and Conditions of a Licence
• Importer-Exporter Code Number
• Exemption from Bank Guarantee
• Clearance of Goods from Customs

39. EXPORT PROMOTION MEASURES
• Policy measures
• Institutional set up.
• Import Facilitation for Export Production.
• Cash subsidies.
• Fiscal Incentives.
• Foreign Exchange Facilities.
• Export incentives
• Export production units

40. Import Facilitation for Export Production
• Export Promotion Capital Goods Scheme
• Special Import Licenses
• Duty Free Licenses under Duty Exemption Scheme
• Duty free licenses are issued as :
• (1) Advance license
• (2) Advance Intermediate license.
• (3) Special Impress license.
• (4) License for jobbing, repairing etc. for re-export.
• (5) License under export production programme.
• (6) Advance Release Order.
• (7) Back to Back Inland Letter of Credit.

41. Export Incentives
• Duty Exemption
• Duty Drawback Scheme
• DFRC (Duty free replenishment certificate)
• DEPB( Duty entitlement pass book)
• Deemed Exports

42. Export Production Units
• Export Oriented Unit (EOU)
• Special Economic Zones (SEZ)
• Software Technology Parks (STP)
• Electronic Hardware Technology Parks (EHTP)

43. Cash subsidies
• Marketing development assistance
• Air freight subsidy
• Spices export promotion scheme
• Jute externel marketing assistance
• Financial assistance scheme agriculture &meat exports
• Financial assistance to marine products exports

44. Fiscal incentives
• Exemption from payment of central excise duty &
simplified procedure for clearance.
• Exemption from sales tax
• Exemptions & deductions under income tax act,1961.
• Duty draw back Scheme (DDS)
• Cash Compensatory Support ( CCS )
• International Price Reimbursement Scheme (IPRS)

45. Import control regime
• 1956-57, restrictions on imports started as lot of imports were
there as such Government even had to import food grains for
self fulfillment
• Imports were classified into
• Banned items ,Canalized items ,Restricted items, OGL
• In 1966 rupee was devalued by 36.5% By devaluation
government expressed the hope that the devaluation would
lead to expansion in export earnings as Indian goods will
become cheaper in international market on the other hands
import would decline as price of imported goods would
increase.

46. • Because of a rigid itemization of permissible imports, an
element of inflexibility in the pattern of utilization of imports
was introduced. The transferability of licenses among same
and different industries was not permissible. This gave rise to
an expanding black market in import licenses. Therefore, the
import allocation system was so designed as to eliminate the
possibility of all competition, either domestic or foreign. The
Govt of India has liberalized the import regime from time to
time. At present, practically all controls on import have been
lifted. Under the new EXIM policy 2002-07.