Foreign Trade Policy in India
Foreign Trade Policy in India, foreign trade is regulated by the Foreign Trade (Development and Regulation) Act, 1992, which replaced the Imports and Exports (Control) Act, 1947.
The Act provides for the development and regulation of foreign trade by facilitating imports into and augmenting exports from India and for matters connected therewith or incidental thereto. The enactment and implementation of this Act have invoked an effective system for the control and regulation of foreign trade in the country. This Act is the governing authority and regulator of foreign trade in the country.
Some of the important provisions under the law relating to foreign trade in the country are as follows:
To empower the Central Government as the ultimate authority to make provisions and regulate the development and regulation of foreign trade in the country.
- As per the Act, every importer and exporter must obtain an Importer Exporter Code Number (IEC) from the relevant Authority to be able to freely trade in and out of the country.
- The appointment of a Director General of Foreign Trade by the Central Government who has the power under the Act to suspend or cancel a trader’s licence issued for export or import of goods in accordance with the Act.
- One of the most integral roles given to the Central Government under the Act is to be able to formulate and announce the Export and Import (EXIM) Policy and amend the same from time to time, by notification in the Official Gazette. INSIDER TRADING
The EXIM policy embodies the government’s policy measures with reference to its exports and imports. The policy plays a vital role in balancing budgetary targets as well as in directing the overall economic development of the country.
The current government has recently introduced a new Foreign Trade Policy (FTP) namelyForeign Trade Policy 2015-20, which aims at boosting India’s exports and trade by making India a significant participant in the world trade economy. The ambitious policy aims at:
- Increasing merchandize exports from India (MEIS) to promote specific Markets Foreign Trade Policy.
- Reducing export obligations by 25% and give a boost to domestic manufacturing.
- Streamlining trade through two new schemes, namely Merchandise Exports from India Scheme (MEIS) and Services Exports from India Scheme (SEIS).
- The higher level of support to be provided to processed and packaged agricultural and food items under MEIS.
- Industrial products to be supported in major markets at rates ranging from 2% to 3%.
- Branding campaigns planned to promote exports in the sectors in which India has been traditionally strong.
- Easier credit and debit eligibility and criteria for traders.
- Changed export performance measures from Rupees to US dollar earnings.
- More transparency in systems and trade machinery.
Of course, along with the above, the FTP is also trying to lower-duty and tariff burdens with the introduction of schemes namely the Duty-Free Tariff Preference (DFTP) Schemebywhich India have extended duty-free tariff preference to 33 Least Developed Countries.
Hence, it can be concluded that the new foreign trade policy is expected to be instrumental in enabling India to respond to the challenges of the external trade environment.