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DEVELOPMENT OF FOREIGN TRADE POLICY

DEVELOPMENT OF FOREIGN TRADE POLICY. Control of foreign trade initiated after second world war Concentrate on restricting imports initially in the Defence Sep 1946, Emergency Provisions(Continuance) Ordinance Act for import control Replaced by Imports & Exports Control 1977

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DEVELOPMENT OF FOREIGN TRADE POLICY

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  1. DEVELOPMENT OF FOREIGN TRADE POLICY • Control of foreign trade initiated after second world war • Concentrate on restricting imports initially in the Defence • Sep 1946, Emergency Provisions(Continuance) Ordinance Act for import control • Replaced by Imports & Exports Control 1977 • Fluctuations in the tenure of EXIM policy • Finalized in 1992(1992-1997) to have 5 year policy • Foreign Trade (Dvpt & Regn)Act,1992

  2. GLOBAL ECONOMY • Inspite of the turmoil in the world capital market, the global mkt kept growing since 1997 • Growth of world trade and GDP was high in 1997 than ever in 90s • Indicator of this economic expansion is the per capita income growth recorded by most of the developed countries • 126, out of 153 WTO member countries, have registered increase in per capita income • The year 2001 witnessed an unexpected decline in world trade which fell down by 1.5% ever since 1987. but this got reversed by 2001 • A good yardstick for the measurement of World economy is GDP which can be defined as “ Sum total of the value of all goods and services produced in the country”.

  3. RESULTS OF THE DVPT IN FOREIGN TRADE • Goods or services provided are expected to be of international quality and price • Service sector has grown and is now 20% of the world trade • Imports are allowed for certain Commodities • Explosion in the visual and written media made people demand high quality goods and as per convenience • The growth of Information technology industry has touched the life at all levels

  4. IMPACT OF RECENT CHANGES IN THE DVPT OF FOREIGN TRADE • Dismantling of industrial license which enabled most of the entrepreneurs to decide on the productive ventures • Allowing foreign investment without setting limit • Allowing NRI and FII to invest in industries • Free flow of technology for modernizing and upgrading industries • Removal of certain restrictions on imports with reduction in tariff rates • Full convertibility of Indian rupee on the trade account • Allowing the retention of forex earnings by exporters for meeting their expenses • Allowing private ventures in the field of banking, civil aviation and telecom • Private sector investment in Oil, Refining, exploration, marketing and in other infrastructural dvpt’s

  5. EXPORT PROMOTION Reasons for countries to concentrate on exports: • Foreign markets provide opportunities to achieve economies of scale and growth • Demand in overseas is more than domestic demand • Enables to achieve export led growth • Export market reduce effects of domestic recession • Boost forex reserve & meet international competition OBJECTIVES OF EXPORT PROMOTION • Compensate for high cost of production • Assist new and infant exporters • Increase profitability

  6. ORGANISATIONAL SETUP

  7. AUTONOMOUS BODIES • Commodity board • Export inspection council • Indian Institute of Packaging • IIFT a. Training of personnel b.Research in problems of FT 5. EPC 6. FIEO 7. Indian Council of Arbitration 8. MPEDA 9. APEDA 10.Indian Trade Promotion Orgn (TDA & TFAI)

  8. PUBLIC SECTOR UNDERTAKINGS/ CANALISING AGENCIES • State trading corporations and its subsidiaries • MMTC • Spices trading Corporation • ECGC

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