CURRENT
FOREIGN TRADE POLICIES & ITS IMPACT ON INDIAN EXPORT SYSTEM

SYNOPSIS

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For
the Degree of doctor of Philosophy

In

Management

Submitted
to

 

 

SHRI
VENKETESHWARA UNIVERSITY,

Gajraula,
Amroha (Uttar Pradesh)

 

Research
Supervisor:                    Research
Scholar:

Dr.
Prabhat Srivastava                  Monika Choudhary

 

Year-
2017-18

 

Table of Contents
CHAPTER – 1
1
INTRODUCTION
2
1.1)  Background
of study. 2
1.2)  Significance of study
3
1.3)  Utility of study…………………………………………………………………………………………………. 2
 
CHAPTER – 2
4
LITERATURE REVIEW
5
Type chapter title (level 3)
6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CHAPTER
– 1

Introduction:
 

Trade
between two or more nations is called foreign trade or international trade.
Exchange of goods & services between different–different countries is
foreign trade.

Now
question arise why do we need export? Export means trade across the political
boundaries of different nations. No nation is self sufficient & had all the
goods that it needs. This happens because of the climatic variations &
unequal distribution of natural resources.

As a
result, countries all over the world have become interdependent & which is
possible only through foreign trade. To meet the high import, export growth is
important. For eg. To meet the oil import bill, export is unavoidable.

Thus,
it is evident that export promotion continues to be major thrust area for the
government. Several measures have been taken in the past for improving export
performance of the country. In India, government has come out from time to time
with various policies on foreign trade to promote export thereby increasing the
foreign exchange reserve. These policies are termed as “ex-im policies”.

The
need for one country to trade with another country is based in large part on
the idea of comparative advantage–which says that any country, no matter how
technologically disadvantaged it may be, can always find some sort of good that
will let it enter the game of foreign trade.

 In this sense, foreign trade is just an
extension of the production, exchange, & consumption that is a fundamental
part of life. The difference with foreign trade is that producers & consumers
reside in separate countries and their currencies are different.

Now, the question is what is foreign
trade policy?

Foreign
trade policy is the set of guidelines or the procedures which are being
formulated by the government to incorporate in the economy and being followed
so as to attain maximum amount of foreign trade.

Foreign
trade policy in India is formulated by the government of India, Ministry of
commerce and Industry, department of commerce.

The
Foreign Trade Policy (FTP), 2015-2020,(as updated) w.e.f. 05.12.2017
incorporating provisions relating to export and import of goods and services,
shall come into force with effect from the date of notification and shall
remain in force up to 31st March, 2020, unless otherwise specified. All exports
and imports made up to the date of notification shall, accordingly, be governed
by the relevant FTP, unless otherwise specified.

Due
to some uneven distribution of natural resources and the theory of comparative
cost, some countries are more suitable place to produce some goods more economically than other
countries which encourages foreign trade. The new Foreign Trade Policy
(2015-20) is made product wise and location wise and tried to maximize the
foreign trade from the country keeping in mind Central Government’s pet
projects, ‘Make in India’ and ‘Digital India’ so as to attain export target of
900 billion dollars by year 2020 through newly introduced two schemes.

The Policy spells out
measures for increased digitalization of exports and imports with the aim to
gradually move towards a paperless office in 24×7 environment and
self-certification by established exporters and importers.

The export promotion of
capital goods scheme (EPCG) is also made lucrative. Incentives are available
for SEZs also. These measures will create more employment avenues in
manufacturing and services.

 The policy
aims at boosting India’s exports and Central Government’s pet projects, ‘Make
in India’ and ‘Digital India’ is being integrated with the new FTP.

1.1)      
Background of
study

 

 Countries are engaged in
international trade for various reasons. Particularly, exports are the means to
generate foreign exchange required to finance the import of goods &
services.

 

Countries
like Germany, USA, Japan and others used their trade policy to:

 

(a)
Restrict their imports a sheltered market for their own industries
so that they could develop rapidly, and

 (b) Promote their exports so that their expanding
industries could secure foreign markets.

 

In
other words, trade policy has acted as an important policy instrument in the
context of many advanced countries.

India,
however, did not had a clear trade policy before Independence, though some type
of import restriction-known as discriminating protection-was adopted since 1923
to protect a few domestic industries against foreign competition. It was only
after Independence that a trade policy as part of the general economic policy
of development was formulated by India.

 

Indian
economy has shifted towards the globalisation economy is linked with
world economy. During 1950-1951 to 2003-2004 the Govt of India have implemented
number of foreign trade policies, these policies have brought a tremendous
changes in Indians foreign trade.

 

 In the world of globalization, export success
can serve as a measure for the competitiveness of a country’s industries. As
all export & import are governed by foreign trade policies& it provides
provisions related to export & import of goods & services.

So,
there is a need to study the impact of these policies on trade.  In this report we will focus on the “Impact
of current foreign trade policies on India’s export”.

 

1.2)      
Significance
of study

 

Foreign
trade is important as it leads to effective & better utilisation of natural
resources & it also develops a wide range of market for the products. It
also contributes to the well being of the people involved in foreign trade.

 Foreign Trade Policy helps in increasing the
revenue of a nation by improving on the exports, which in turn help in
improving the Balance of Payment. Foreign Trade propels economic growth and
national development. The primary purpose is not the mere earning of foreign
exchange, but the stimulation of greater economic activity.

This
report “Impact of current foreign trade policies on Indian exports” is very
useful and important as it will identify the causes of trade deficit or surplus
and also it will give reasons where we are lacking as there is a gap in between
expected and actual performance of export and import. It also includes the role
of the schemes in promoting exports.

 

1.3)      
Scope
of the study

 

With
an aim to make India a significant partner in global trade by 2020 and for
increasing global competitiveness of domestic products and aligning India’s
tariff framework with the long term commitment at World Trade Organisation, the
government formulated Foreign Trade Policy (FTP) for the term of 5 years
commencing from 2015.

The
new Policy (FTP 2015-20) is made product wise and location wise and tried to
maximize the foreign trade from the country This policy aims at boosting
India’s exports and Central Government’s pet projects, ‘Make in India’ and
‘Digital India’ is being integrated with the new FTP 2015-20.

The
Policy (FTP 2015-20) of India mainly focuses on an ambitious export target of
900 billion dollars by year 2020 highlights a visible push to ‘Make in India’.

 

 

 

 

 

CHAPTER
– 2

LITERATURE
REVIEW

 

Many
theoretical & empirical Studies have been undertaken to assess the role of
foreign trade policies and patterns of trade & also its impact on India’s
Trade in India or any other country’s economic development. Prominent among
them are as follows:

(Dr.B.K.Shinde, dec 2009-jan 2010) Emphasise on a
number of changes took place in all most all the sectors of the Indian economy
since independence. During 1950-1951 to 2003- 2004 the Govt, of India have been
implemented number of foreign trade policies, these policies have brought a
tremendous changes in Indians foreign trade.

 

(Panagariya, 2004) talks about the external-sector policies of India; the impact of these
policies on trade flows, efficiency & growth; and the future direction
trade policies.  A discussion of the
major developments in the area of trade policy in both goods and services &
the   evolution of trade flows–their growth,
composition & direction and also the impact of trade liberalization on
efficiency and growth has been shown.

(T.P.Bhat, 2011)  Describes the pre-reform period and post-
reform period in which structural changes in the foreign trade particularly the
export sector has been shown.

 

(singh, Dec 2006) talks about the
export and import growth  for providing
the impetus for economic growth in developing countries and import provides the
link between the trade and output growth.

 

(Sally, 2011) focuses on India’s cumulatively significant trade and FDI
liberalisation has lessened the gap with other developing countries. External defence
is now much closer to Chinese & ASEAN levels. But that still leaves important
pockets of protection in agri­culture, some industrial products in addition to
big-ticket services sectors

 

(Mukherjee, 2012) analyses the
performance of India’s exports as well as the various economic factors which
have contributed to its growth. Since manufactured exports comprise a major
share of India’s aggregate exports. It also gives an overview of the export
performance of three important commodities namely gems & jewellery, cotton
and electronic goods furthermore concludes with key policy changes which could
have a bearing on the current trends seen in these sectors.

 

(PILLANIA, 2008)Indian economy and foreign trade are on a
growth trajectory. Indian exports have come a long way in value terms from the
time of gaining independence in 1947.

 

The total value of India’s merchandise exports increased
from US $ 1.3 billion in 1950-51 to US $ 63.8 billion in 2003-04 – a compound
rate of 7.6 per cent. Trade growth has picked up post liberalization of 1991.

 

The composition of trade is now dominated by manufactured
goods and services. India services exports share in global exports is more than
double of that of Indian manufacturing exports. East Asian countries,
particularly China have become a major trading block. There is huge untapped
potential for Indian foreign trade in years to come.

 

 

 

 

 

 

 

 

 

 

 

 

 

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