FOREIGN TRADE POLICY

[27 AUG 2009 31 MAR 2014]

BY
AAKASH TIWARI &
JOYABRATA GUHA
 What is Foreign Trade Policy
Foreign trade is exchange of capital, goods, and
services across international borders or territories.
According to Wassermann and Haltman, foreign trade
consists transaction between countries inward and
outward.
So, Foreign Trade Policy is the policies which are taken
for future EXIM (export-import) of the country.
Foreign trade is consist of export trade and import
trade.
Export involves sale of goods and services to other
countries.
Import involves purchase of goods and services from
other countries.
 Indias Foreign Trade Policy 2009-14
The union commerce ministry , government of India
announces the integrated foreign trade policy in
every five year.
The policy is updated every year with some
modifications and new schemas.
New schemas come into affect on the start of the
financial year.
The current FTP was announced on Aug 28,2009 for
the period of 2009-14.
The current FTP will continued until new FTP
announced.
 Need of Foreign Trade Policy
Generally, No country is self sufficient, it has to
depend on other countries for importing the
goods and services, which either non-available or
available in insufficient quantities.
Similarly, a country has to export goods, which
are in demand from outside or the country have
it in access quantity.
Without foreign trade, nation would be limited to
the goods and services produced within their
own borders.
 Foreign trade or international trade is
recognized a the most significant
determinants of economic development of a
country, all over the world.
It consist of inward (import) and outward
(export) movement of goods and services,
which results in inflow and outflow of foreign
exchange. Thats why it is called EXIM trade.
 Objectives of FTP 2009-14
To stop the declining trend of exports and starting
the exports is the main aim of the policy.
To double Indias exports of goods and services by
2014.
To double Indias share in global merchandise trade
by 2020 as a long term goal.
To act as an effective instrument of economic growth
by giving a thrust to employment generation.
To accelerate export and discourage imports to
ensure surplus trade in five years.
 Simplification of the application procedure for
availing benefits.
To encourage exports trough a mix of measures
including fiscal incentives, institutional changes,
procedural rationalization and efforts for enhancing
market access across the world and diversification of
exports markets.
To set in motion the strategies and policy measures
which catalyze the growth of exports.
 INFORMATION
Merchandize is $296.8 Billion in exports & $488.6
billion in imports, as on 2012-13.
Total exports in 2012-13 is $442.4 billion and
total imports is $616.7 billion.
Indias merchandize Export and Import in $
US billion in 2012-13
$600.00

$500.00

$400.00

$300.00
$488.60
$200.00
$296.80
$100.00

$0.00
Exports Imports
 Total import and export of India in $ US
billion in 2012-13
$700.00

$600.00

$500.00

$400.00

$300.00 $616.70

$200.00 $442.40

$100.00

$0.00
total exports total imports
General aims

The policy aims at developing, improving export

performance, boosting foreign trade and earning
valuable foreign exchange.
A fall in exports has led to the closure of several
small and medium scale export oriented units ,
resulting large scale unemployment.
Target :
Export Target : $ 200 for 2010-11
which is achieved
Challenges of foreign trade policy

Challenge of becoming a major player in world trade.

Challenge of real diversification of Indias exports
Challenge of increasing export & its competitiveness
Challenge of comprehensive economic cooperation
agreements (CECAs) in the absence of WTO.
Challenge of tariff reforms.
Challenge of service trade.