Foreign Trade Policy

Question 1

Types of trade

2 types of trade: Internal trade and foreign trade
Foreign trade: Export trade, import trade and re-export trade
Foreign trade- governed by Foreign Trade (Development and Regulation) Act, 1992
Payment of export-import transactions- Foreign Exchange management Act, 1999
Physical movement of goods and services- Customs Act, 1962

Question 2

Importance of foreign trade

Answer 2

1. Export of surplus production
2. Promotes specialization
3. Rise in standard of living
4. Economic stabilization
5. Increase in National income
6. proper distribution of resources

Question 3

Export-Import trade-Institutional framework
Stable economy measured by- growth in index of exports
Main objective: to accelerate the development of the economy with required regulation to support the framework structure
Key institutions in the framework:

Answer 3

1. Export promotion council (19)
   Function:
   - tell gov. about exporters problems
   - keep members posted about trade inquiries and oppurtunities
   - to help identify potential export oppurtunities
   - provide assistance to individual exporters on specific problems
   - to solve disputes between exporters and importers
2. Commodity boards (9)
   - acts as export promotion council in case of specific goods
3. State’s Cell
   - under Ministry of Commerce
   - acts as nodal agency between state government and union territories
4. Development Commissioner, Small Scale Industries Organization (SSIS)
   - headquarter- New Delhi

Question 4

Foreign Trade Policy (2015-2020)

Answer 4

• Merchandise export from India Scheme
• Service Exports from India Scheme
  Rates of reward- 3% and 5%
• Duty Credit Scrips
• Status Holders
  Preferential Trading Agreements (PTA), Free Trade Agreements (FTA), Comprehensive Economic Cooperation Agreements (CECA), Comprehensive Economic Partnership Agreements (CEPA)