ECONOMICS, FOREIGN TRADE

1. FOREIGN TRADE
Jasmine Kaur
Assistant Professor
RGNUL

2. Significance of Foreign Trade
 Trade based on comparative advantage
 Optimum utilisation of resources
 Promotes competition
 Optimisation of consumption
 Development of SOCs
 Technological development
 Promotes cooperation
 Check on domestic monopoly

3. India’s Composition of Foreign
Trade
 Composition of Imports
 Import of POL amounted to $82,880 million
which was 21.8% of total import expenditure in
2015-16
 Import of electronic goods amounted to
$40,012 million in 2015-16
 Import of pearls, precious and semi precious
stones amounted to $20,072 million which was
5.3% of total import expenditure in 2015-16
 Import expenditure on electrical and non-
electrical machinery amounted to $29,452
million in 2015-16

4. India’s Composition of Foreign
Trade
 Composition of Exports
 Export of engineering goods amounted to
$60,570 million in 2015-16
 Export of gems and jewellery amounted to
$39,473 million in 2015-16
 Export of readymade garments amounted to
$16,956 million in 2015-16
 Export of leather and leather products
amounted to $5401 million in 2015-16

5. Foreign Trade Policy in the Pre-
Reform Period
 Import substitution
 Simplification of procedural formalities
 Export promotion
 Minimization of the role of quantitative restrictions
and reduction in tariff rates
 Setting up of Export processing zones to push up
exports

6. Trade Policies in the Post-Reform
Period
 Rationalization of tariff structure
 Decanalisation
 Devaluation
 Trading houses
 Setting up of SEZs
 Agriculture Export Zones
 Market Access Initiative Scheme

7. EXIM Policy (2002-07)
 The target was to increase country’s share in
the world trade to 1 per cent by 2007
 To increase the growth rate in exports to 12.4
% per annum
 To allow liberal import of technology
 To remove quantitative restrictions

8. EXIM Policy (2002-07)
 Facilities for agriculture sector
 Benefits to cottage and small scale industries
 Facilities to SEZs
 Facilities for industrial sector
 Focus on export led growth
 Procedural simplification

9. EXIM Policy (2004-09)
 The target was to double India’s percentage share
of global merchandise trade by 2009. The target
was set to achieve 1.5 % share in world trade by
2009
 The objective was to act as an effective
instrument of economic growth by giving a thrust
to employment generation, especially in semi-
urban and rural areas

10. EXIM Policy (2004-09)
 Measures for agriculture sector
 Measures for gems and jewellery business
 Handlooms and handicrafts sector
 Leather and footwear sector
 Vishesh krishi upaj yojana
 EPCG scheme
 Exemption from certain taxes to EOUs
 Free trade and warehousing zone

11. EXIM Policy (2009-14)
 Expansion of Focus Market Scheme and
Focus Product Scheme
 EPCG Scheme
 Sale of products by EOUs in Domestic Tariff
Areas up to a limit of 90%
 Simplification of procedures

12. EXIM Policy (2015-20)
 Objectives:
 To increase exports of merchandise and services to approx $900
billion by 2019-20
 To increase the country’s share in world’s exports to 3.5%
 To diversify India’s exports
 To improve India’s BOP position
 Merchandise Export from India Scheme
 Service Export from India Scheme
 Ease of Doing Business

13. THANK YOU