Foreign trade regulation in india 12-64

• 1. Foreign Trade Regulation in India Anupam Singh Gautam(10810012) U.Kistaiah (10810064)

2. Agenda History of Foreign Trade in India Foreign Trade Act Foreign Trade Policy 2009-14 Incentives Schemes New Initiatives Organizational Setup 3. HISTORY OF FOREIGN TRADE IN INDIA Import control was introduced in 1940 In 1946 the Emergency provisions ordinance was promulgated to continue the import trade control Import and Export(control) Act came into force with effect from 25th march 1947 Finally the Import and Export(control) act was replaced by the Foreign Trade(Development and Regulation) Act in 1992. 4. MAIN PROVISIONS:1. Development and Regulation2. Prohibition and Restriction3. EXIM Policy4. Director General of Foreign Trade5. Importer - Exporter Code Number6. Issue and Suspension/Cancellation of license7. Search, Inspection and Seizure8. Penalty for Contravention 5. Indias Foreign Trade In the last few years, robust growth in merchandise exportsFrom US$ 63 billion in 2003-04 to US $ 168 billion in 2008-09. Share of global trade (WTO estimates): 20032008 Merchandise trade0.83%1.45% Commercial Services 1.4%2.8% Goods & Services 0.92%1.64% TradeSource : Annual report of foreign trade policy 5 6. Indias Foreign Trade Exports & Imports(Figures in US$ billion) YearExport %Imports %Growth Growth 2004-05 83.53 30.8111.52 42.7 2005-06 103.0923.4149.17 33.8 2006-07 126.2622.5185.60 24.4 2007-08 162.9029.0251.65 27.0 2008-09 185.2913.6303.69 20.7 2009-10 178.75-3.52 288.37 -5.01Source: Ministry of commerce 6 7. REASONS FOR EXPORT DECLINEMajor Hurdles faced by Indian Exporters: Rupee Appreciation by about 12% in theyear2007-08 Global Economic Slowdown and Recessionin Developed Economies during 2008-09and its impact. High Interest Rates Ban on exports of certain food productssince 2007. High Incentives provided by some of thecountries like China, Bangladesh etc. 7 8. Indias Foreign TradeMajor Export Destinations Country2008-09($ bn)% share in Total1USA19.712%2United Arab Emirates 17.811%3China8.5 5%4Singapore7.6 5%5Hong Kong6.4 4%6United Kingdom 6.2 4%7Germany5.9 4%8Netherlands5.9 4%9Saudi Arabia 4.8 3%10 Belgium4.3 3%8 9. Indias Foreign TradeMajor Import CommoditiesCommodity2008-09 % share in Total ($ bn) 1Petroleum, Crude and products93.132.36% 2Machinery, Electrical and non-electrical 24.38.44% 3Electronic goods 21.57.48% 4Gold and silver19.56.76% 5Fertilizer, crude and manufactured 13.64.72% 6Pearls, precious and semi-precious 12.84.44% 7Organic and inorganic chemicals12.84.43% 8Coal, coke and briquettes10.53.64% 9Iron & Steel 9.5 3.30% 10 Metaliferrous ores and metal scrap 8.3 2.89%9 10. Foreign Trade Policy 2009-14Short Term Objectives: To arrest and reverse the declining trend of exports; and To provide additional support to those sectors which have been hitbadly by recession in the Developed World.Medium term Policy Objectives : To achieve an Annual Export growth of 15% with an Annual ExportTarget of US$ 200 billion by March 2011. To achieve an Annual Export growth of around 25% by 2014. To double Indias exports of goods and services by 2014.Long Term Objective : To double Indias share in Global Trade by 2020. 10 11. Promotional Measures/ IncentiveSchemes Vishesh Krishi and Gram Udyog Yojana(VKGUY) Focus Market Scheme (FMS) Focus Product Scheme (FPS) Market Linked Focus Product Scheme(MLFPS) 11 12. Vishesh Krishi & Gram Udyog Yojana(VKGUY) To promote exports of : (i) Agricultural Produce and their value added products (ii) Minor Forest Produce and their value added variants (iii) Gram Udyog Products (iv) Forest Based Products and (v) Other Products, as notified from time to time. VKGUY benefits are granted with an aim to compensate high transport costs, and to offset other disadvantages.12 13. Focus Market Scheme Objective is to offset high freight cost and other externalities to select international markets with a view to diversify the markets and to enhance Indias export competitiveness in these countries. Currently 109 markets have been notified13 14. Focus Product Scheme Objective is to incentivize export of such products which have high export intensity / employment potential, so as to offset infrastructure inefficiencies and other associated costs involved in marketing of these products. Currently over 1000 Products covered under FPS. Example: Green Technology products14 15. Market Linked Focus Product Scheme(MLFPS) To promote exports of products of highexport intensity but which have a lowpenetration in countries Currently over 1550 products coveredunder MLFPS. 15 16. Foreign Trade Policy 2009-14New InitiativesHigher Support for Market and ProductDiversification 26 new markets added under FMS(16 in Latin America, 10 in Asia-Oceania) Incentive under FMS raised from2.5% to 3%. Incentive under FPS raised from1.25% to 2%.16 17. Foreign Trade Policy 2009-14New Initiatives Higher Support for Market and ProductDiversification (contd.) New products under FPS :Engineering products, Plastic (value added products),Technical Textiles, Green Technology products , vegetables, textiles and certain Electronic items. New products/markets under MLFPS : Pharmaceuticals, Synthetic textile fabrics, value added rubber products, value added plastic goods, textile made ups,, glass products, certain iron and steel products . Benefits to these products will be provided, if exports are made to 13 identified markets (Algeria, Egypt, Kenya, Nigeria, South Africa, Tanzania, Brazil, Mexico, Ukraine, Vietnam, Cambodia, Australia and New Zealand). The above markets also included for existing products i.e. Auto Components, Motor cars, Bicycles & Parts, Apparels. 17 18. Foreign Trade Policy 2009-14New Initiatives To Support Various Sectors Like Gems & Jewelers Sector Pharmaceutical Sector Agriculture Sector Leather Sector Handloom sector 18 19. ORGANISATIONAL SET UPMinistry of commerceAutonomous Public sector Attached and Advisory body subordinatebodies undertakingsOffice 20. MINISTRY OF COMMERCE The Ministry of Commerce, Government ofIndia, is the most important organ concernedwith the promotion and regulation of the foreigntrade of the country. Matters related to foreign trade are dealt withby eight divisions in the Department ofCommerce. i) Administrative and General Division, (ii)Finance Division, (iii) Economic Division, (iv)Trade Policy Division, (v) Foreign TradeTerritorial Division, (vi) Exports ProductsDivision, (vii) Services Division, and (viii)Industries Division. 21. DESCRIPTION OF AUTONOMOUSBODIES Export Inspection Council Indian Institute of Foreign Trade Indian Institute of Packaging Export Promotion Councils, Commodity Boards and Authorities Federation of Indian Export Organisation Indian Council of Arbitration India Trade Promotion Organisation 22. PUBLIC SECTOR UNDERTAKINGS The State Trading Corporation of India andits subsidiaries The spices Trading Corporation TheMineralsandMetalsTradingCorporation of India and its subsidiary 23. ADVISORY BODYCentral Advisory Council on Trade: The CentralAdvisory Council on Trade, consisting ofrepresentatives from different organisations andindividuals with business standing and expertise inthe field of trade and commerce, and headed byCommerce minister. 24. ATTACHED AND SUBORDINATEOFFICES Office of the Director General of ForeignTrade(DGFT) Office of Development Commissioners Director General of Commercial Intelligenceand Statistics 25. Thank You