Previous Inward looking trade policies were replaced by the EXIM policy in April, 1992. Government of India Introduced the EXIM Policy to bring liberalization in Imports and boost the Exports. This was bringing along a new era in India’s foreign trade.
About the Foreign trade policy (EXIM Policy):
- The Director General of Foreign Trade (DGFT) establishes guidelines for Import and Export of Goods.
- Foreign Trade development and Regulation Act, 1992 regulates the policy.
- Import Export procedures, promotional measures, related policies are documented in EXIM Policy
- The modifications in the EXIM Policy are announced by the Union Minister of Commerce.
- Government of India Notifies policy in every 5 years since year 1992.
Objectives of the EXIM Policy:
- EXIM Policy divided into two;
- Import policy: regulation and management of imports
- Export policy: promotion and regulation of exports
EXIM Policies post liberalization:
- Exim Policy 1992 -1997
- To bring stability and continuity, the Export Import Policy was made for the duration of 5 years. The earlier policies were made for a period of 3 years and hence less stable
- Any amendments are made by Central Government in the interest of public.
- Important step towards economic growth in India.
- New Export Import Policy was need for the smooth functioning of the Indian export import trade.
- Import has been further liberalized. The duty was reduced from 15% to 10% on importing capital goods.
- Practices promoting Indian exports in international trade were introduced. Licensing requirements were reduced; restrictions on quantity were reduced, free import and export of goods (except goods in negative list).
- Provision of additional SIL of 1 % for export of agro products
- Encourage foreign investment in India by permitting 100% equity participation in EOUs
- Encouraged Indian industries to undertake research and development programmers and upgrade the quality of their products.
- Encouraging domestic sourcing of raw materials, in order to build up a strong domestic production base.
- It took the foreign trade dealings to a level where both Merchandise and services were imported and exported.
- Business firms providing exporting services were given a status of service providers w.e.f. 1.4.1999.
- To provide access to essential inputs for production and hence attain sustainable economic development.
- To combine the technological and local strength enhancing efficiency in Indian agriculture, service industry.
- Creating healthy competitions by creating opportunities.
- Making internationally acceptable standards of quality accessible.
Thus the Main objective of EXIM Policy or Foreign Trade Policy is:
- Maintain and promote foreign trade.
- Provide Resources which have worldwide acceptable standards.
- Attain economic development through foreign trade
In the Year 2004, then Industry and commerce minister, Kamal Nath Changes the name of EXIM Policies to Foreign trade policies. Reason behind was it was more appropriate to call it a foreign trade policy as the policy needed to go beyond Exports and Imports. It was a step towards having an integrated approach towards development of India’s Foreign Trade.
An Annual revision is brought into the foreign trade policies as the trade environment is dynamic and ever changing. The situations require quick responses and hence, annual revisions (also known as Interim Policies) are brought into.
The current foreign trade policy covers the time period starting from Year 2015 to 2020 focusing on digitalization and Make in India.