EXPORT AND IMPORT

POLICY
 What is Exim Policy?

It contains policies in the sphere of Foreign trade i.e.
with respect to import & export from the country
and more especially export promotion measures,
policies and procedure related there to.
Export means selling abroad and import as bringing
into India, any goods and services.
EXIM Policy is a set of guidelines and instructions
established by the DGFT in matters related to the
import and export of goods in India.
DGFT-Directorate General of Foreign Trade
 Objective of Exim
Policy

Accelerating the countrys transition to a globally oriented
vibrant economy with a view to derive maximum benefits
from expanding global market opportunities;
Stimulating sustained economic growth
Enhancing the technological strength and efficiency
Encouraging the attainment of internationally accepted
standards of quality
Providing consumers with good quality products and
services at reasonable prices.
 Advantages of Import

Reduce dependence on existing markets
Exploit international trade technology
Extend sales potential of existing products
Maintain cost competitiveness in your
domestic market
 Disadvantages Of
Import

Importation of items from other
countries can increase the risk of getting
them which is no more common in the
warm weather.
it leads to excessive competition
It also increases risks of other diseases
from which the country is exporting the
goods.
 Advantages Of Export

Exporting is one way of increasing your
sales potential

Increasing sale& profits

Reducing risk and balancing growth

Sell Excess Production Capacity.

Gain New Knowledge and Experience

 Disadvantages Of
Export

Extra Costs

Financial Risk

Export Licenses and

Documentation

Market Information
 STRATEGIC OPTIONS FOR TRADE
POLICY

A Free trade policy is one which does not impose any
restriction on the exchange of goods and services between
different countries. A free trade policy involves complete absence
of tariffs, quotas, exchange restrictions, taxes and subsidies on
production, factor use and consumption.

A Protective trade policy pursued by a country seeks to

maintain a system of trade restrictions with the objective of
protecting the domestic economy from the competition of foreign
products

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 Organisations

Various organisations of Imports and Exports are:
WTO(World Trade Organisation)
IMF(International Monetary Fund)
ADB(Asian Development Bank)
WTO is major international trade board for liberalisation.
WTO came into in the year 1995 jan 1st.
GATT agreement required to be member of WTO.
Major part of WTO is FTRB(Foreign Trade Review Body).
FERA AND FEMA


 Import procedures

Trade enquiry
Procurement of import license
Obtaining foreign exchange
Placing the indent
Dispatching a letter of credit
Obtaining necessary documents
Customs formalities and clearing of goods
Making the payment
 Export procedures

Registration procedure
Pre shipment procedure
Shipment procedure
Realizing export incentives
Post-shipment procedure
 Pre 1991 Trade
Policy

In eighties, Export
promotion
schemes were
In 1960s and implemented-
70s, imports Export Promotion
were partly Council, The trade
Second Year liberalised with Fair Authority of
Plan- Highly several India, cash
Inward Looking Restrictive conditions. compensatory
Development Policy. schemes etc.
Strategy- Import
Substitution
Strategy
The 1991 Trade policy

Liberalisation of imports and exports

Liberal Exchange Rate Management

Rationalisation of tariff structure.

Changes in the system of export incentives.

 Comparison of Pre 90s
& Post 90s Exim Policy
Year Import Export Trade
(Cr.) (Cr.) Bal.(Cr.)
Excess of Import due to-
1948-51 650 647 -3 Pent-up demand of war.
Shortage of food & raw material due to
partition.
Import of capital goods due to starting
of hydro-electric & other projects.
Trade deficit was largely due to
1951-56 730 622 -108 programmes of industrialization which
gathered momentum and pushed up the
imports of capital goods.

No improvement in exports.
Year Import Export Trade
(Cr.) (Cr.) Bal.(Cr.)
Excess of import due to setting of steel
1956-61 1080 613 -467 plants,heavy expansion & renovation on
railways & modernization of many
industries.
Export lower than occur in second plan
which shows that export promotion drive
did not materialize.
Excess of import due to-
1961-66 1224 747 -477 Rapid industrialization needs capital
goods as raw material.
Defence needs had increased due to
aggression by China & Pakistan.
Need of foodgrains due to failure of
crops in 1965-66.
Year Import Export Trade
(Cr.) (Cr.) Bal.(Cr.)
Devaluation was resorted to essentially-
1966-69 5775 3708 -2067 To reduce volume of import.
(Annual- To boost export.
Create favourable balance of trade and
plans) balance of payment.

As a consequence of import restriction

1969-74 1972 1810 -162 policies with vigorous export promotion
measures ,during 1972-73 the country
had favourable balance of trade for first
time since independence.
But several international factors pushed
up the price of petroleum
product,steel,fertilizers etc.results low
magnitude of trade balance.
Year Import Export Trade
(Cr.) (Cr.) Bal.(Cr.)
Significant increase in export during
1974-79 5540 4730 -810 every year of this period.Export of
coffee,tea,cotton fabrics etc.recorded
substantial increase in this period.
But,Janta Government followed policy of
haphazard import liberalization results
decline trade balance from 1977-78.
Decline in POL imports was more than
1980-85 14,986 9051 -5935 by a big hike in non-POL imports as a
consequence of import liberalization.

Consequently, huge trade balance.

Year Import Export Trade
(Cr.) (Cr.) Bal.(Cr.)
Huge trade balance compelled the
1985-90 28,874 18,033 -10,841 government to approach the World
Bank/IMF for loan.
The government was also forced to
apply brakes on the licensing policy of
imports.

In 1990-91,push was given to

1990-92 45,522 38,300 -7222 export,but as a consequence of Gulf
war government failed to curb imports.

In1991-92, government introduced

number of measures in trade policy
allowing exim scripts,abolishing cash
compensatory support(CCS) schemes
as also a two-step devaluation of the
rupee,but fail to boost up export.
Year Import Export Trade
(Cr.) (Cr.) Bal.(Cr.)

In 1992-01,slow down in exports due to-

1992-01 140740 118252 -22,488 Depressed nature of world markets.
Saturation of developed countries market
for electronic goods which are dynamic
export sectors.
Increased protectionism by industrialised
countries in area of textile and clothing.
Increasing competition from China &
Taiwan.
India underestimated the impact South-
East Asian crisis
Non-Tarrif barriers have been created by
developed counties to slow down Indian
exports.
In 2000-01 export was largely due to
rupee depreciation along with further
trade liberalization,more openness to
foreign investment in EOU sectors ike IT.
Year Import Export Trade
(US (US Bal.(US
$million) $million) $million)

2002 03 65422 52512 -12910 Rise in imports in 2002-03 was broadly

based on oil imports,food &allied
products(edible oil),capital goods.

Exim policy 2003-04gave massive thrust

to exports by
2003-04 80177 64723 -15454 Duty free import facility for service
sector upto earning 10lakh foreign
exchange.
Liberalization of Duty Exemption
scheme.
Besides,all these measures trade balance
in 2003-04 are high due to mainly on
imports of POL products
more.Currently, almost two-third of
country crude oil requirements are
imported.Besides import of POL, import
of non POL items shot up by 17%
in2002-03 to 26.2%in 2003-04.
 Conclusion

EXIM Policies provides policy and strategy of the government
to be followed for promoting exports and regulating imports.
Export and import play a significant role in the economic
development of all the developed and developing economies.
With the growth of international organisations like WTO,
UNCTAD, ASEAN, etc., world trade is growing at a very fast
rate.