POLICIES UNDERTAKEN AFTER 1990s

INTRODUCTION
In 1991 the India economy got liberalized and almost in all the sectors the restrictive policies abolish,
only under the conditions of extreme necessity. Since that time the trade has produced remarkable
achievement in the GDP of India which is increased from 15 percent from 1991 and in 2005 the
percentage share of trade in the total GDP in 35 percent and now in 2012-13 it is 43 percent. In the
recent years India stand on the path of beneficial trade policies for the producers as well as the
consumers and for the whole economy as well. With the passage of time India is quite sensitive in
trade policies which are reflecting in the recent trade policies. The trade policies of 2004-09 and
2009-14, in these policies it is determined that India had to facilitate those imports which are
required to stimulate our economy.

As a result, in 1991 India has no option rather to open its markets for the world’s competition. Under
the Prime Minister Ship of P.V. Narsimha Rao and Finance Minster of that time Dr Manmohan Singh
gave green signal to the Indian markets to work globally and Indian economy was set free to play
among the international players.

The Main Objectives of Policy of 1991 are as follows: -

1. To consolidate the strengths build up during the last four decades of economic planning.

2. To correct the distortions or weaknesses that may have crept in the industrial structure.

3. To maintain a sustained growth in the productively and employment.

4. To attain international competitiveness.

The Recent Trade Policy

After the announcement of new Industrial Policy in 1991 and opening of Indian markets for free
competition in the whole world and creates hope for the Indian economy to came in the level of
subsistence but only the New Industrial Policy is not sufficient to recover the world’s largest
economy as a result on 31 March, 1992, a new trade policy was announced by the Government of
India has marked the 71 departure for all the previous trade policies because the previous trade
policies does not show such an value changes for the improvement of foreign trade position of India.
This policy is therefore important and unique because it has been announced after the
implementation of the New Industrial Policy of 1991 and rather than this policy almost lifts all kinds
of state control and regulations. It also abolishes the previous licensing environment form the Indian
economy.

In this policy except (Negative List) all the commodities can be imported without any kind of tariff
imposition on them. The private sector is allowed to import the commodities like raw material and
capital goods without the intervention of government, but besides this the exports obligations must
be fulfilled correspondingly. This policy is based on the assumptions of liberalisation. The steps were
also taken to boost the domestic industrial productions.
The some more aspects of the foreign trade policy of (1992-1997) include:

 Introduction of the duty-free exports promotion of capital goods (EPCG) scheme.

 Strengthening of the advanced licensing system.

 The creation of suitable framework for integrating Indian foreign trade in to the internal
economy.

 The Indian industrial products to achieve the best quality of products so that they could stand in
front of the high international standard of quality.

 The research and development should be promoted to attain the technological modernisation and
up gradation of Indian industries.

Foreign Trade Policy of 1997-2002

The policy of 1997-2002 has brought a new concept in the trade policies of Indian and provide
Indian economy a gateway to liberalization and modernisation by which the Indian economy is able
to integrate with the different and developed economies of the world. The policy contains several
significant features. The most controversial (VABAL) value-based license scheme has been abolished
and 542 items have been transferred from the restricted list to special import license (SIL) and freely
importable list. The new Entitlement passbook scheme has also been introduced.

Objective of the Policy 1997-2002

The principal objectives of the Foreign Trade Policy 1997-2002 are as follows:

 To accelerate the economy from low level of economic activities the high level of economic
activities by marketing it a globally oriented vibrant economy and drive maximum benefits from
expanding global market opportunities.
 To create new employment opportunities and encourage the attainment of internationally
accepted standards of quality.
 To give quality consumer product at practical prices.

Impact of Foreign Trade Policy 1997-2002

(A) The EXIM Policy 1997-2002 proposed with an aim to prepare a framework for globalization of
Indian economy. This is evident from the very fast objective of the policy, which states. To
accelerate the economy from the level of economic activities to high level of economic activities
by marketing it a globally market oriented vibrant economy and to derive maximum benefits
from expanding global market opportunities.
(B) Impact on Agriculture: Many encouraging steps have been taken in the EXIM Policy 1997-2002
in order to give a boost to Indian agricultural sector. These steps includes provision of additional
SIL of 1 % for export of agricultural products, allowing EOU’s and other units in EPZs in
agriculture sectors to 50% of their output in the domestic tariff area (DTA) on payment of duty.
(C) Impact on foreign Investment: In order to encourage foreign investment in India, the EXIM
Policy 1997-2002 has permitted 100% foreign equity participation in case of 100% EOU’s and
units set up in EPZs.
Foreign Trade Policy (2004-09)
Union commerce and industry Minister Mr. Kamal Nath announced the foreing trade policy for the
five year period (2002-09) on 31st August 2004 which aimed doubling Indias’s percentage share in
global merchandise trade from 0.7 % in 2003. To 1.5 % 2009. During 2003-04, India’s merchandise
exports were valued at $ 61.8 billion accounting for about 0.7% of world’s exports. If share was to
doubled, it would imply that the country’s exports would have to reach $ 195 billion by 2009,
assuming a 10% compound annual growth rate in world trade. For this purpose, India’s exports
should grow at the annual average growth rate of 26%. Besides this, the service sector is also
expected to increase its share in export of invisible to over $ 100 billion. Together, the two sectors
are expected to reach the target of $ 300billion by 2009.

Main Elements of Exim Policy 2004-09

 The new Exim Policy 2004-09 has the following main elements:

 Legal Framework

 Board of Trade

 General Provision Regarding Imports and Exports

 Export Promotion Capital goods Scheme

 Export Oriented Units (EOUs), Electronics Hardware technology Parks (BTPs) (EHTPS), software,
Technology Parks ((STPs) and Bio- Technology (BTPs)

 Special Economic Zones

 Free trade and Warehousing Zones

 Deemed Exports FREE EXPORTS: In case an export of import that is permitted freely under export
import policy is subsequently subjected to any restriction of regulation, such imports or exports will
ordinarily be permitted not withstanding such or regulation. To keep under consideration to double
the India’s trade share globally which in turn will expand the employment opportunities and so
many other things which will enhance the Indian economy all over, and the special focus has been
identified for agriculture, gems and jewellery, leather and marine sectors. Government of India shall
make efforts to promote exports to these sectors by sectoral strategies shall be notified from time to
time.

INDIA’S FOREIGN TRADE POLICY (2009-2014)

The foreign trade policy which was announced on August 28,2009 is an integrated policy for the
period (2009-14). Objectives of foreign Trade Policy 2009-14

I) To arrest and reverse declining trend of export is the main aim of the policy. This aim will
be reviewed after two years.
II) To double India’s exports of goods and services by 2014.
III) To double India share in global merchandise trade 2020 as a long term aim of this policy.
India’s share in global merchandise export was 1.45 percent in 2008. Simplification of
the application procedure for availing various benefits.
IV) To set in motion the strategies and policy measures which catalyse the growth exports.
V) To encourage exports through a mix of measures including fiscal incentives, institutional
changes, procedural rationalisation and efforts for enhance market access across the
world and diversification of export.

Aim in General:

The policy aims at developing export, improving export performance, boosting foreign trade and
earning valuable foreign exchange. FTP assumes great significance this year as India’s exports
have been battered by the global recession. A fall in exports has led to the closure of several
small and medium scale export oriented units, resulting in large scale unemployment.

Targets

 Export Target $200 billion for 2010-11.

 Export Growth Target: 15 % for next two year and 25% thereafter. EPCG

1. Obligation under EPCG scheme relaxed.

2. To aid technological up gradation of export sector. EPCG scheme at Zero duty has been
introduced.

3. Export obligation import of spares, moulds etc. Under EPCG scheme has been reduced by
50%.