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India in The Global Setting

India is emerging as one of the largest markets in the world due to factors such as a large population, rising income, and changing social attitudes. However, India also faces problems as it is one of the poorest countries with a per capita income less than half the average of developing countries. The EXIM Policy announced every five years by the Indian government consists of export and import provisions, promotion schemes, and details for different sectors, with the goal of doubling India's share of global trade and generating employment.

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2K views3 pages

India in The Global Setting

India is emerging as one of the largest markets in the world due to factors such as a large population, rising income, and changing social attitudes. However, India also faces problems as it is one of the poorest countries with a per capita income less than half the average of developing countries. The EXIM Policy announced every five years by the Indian government consists of export and import provisions, promotion schemes, and details for different sectors, with the goal of doubling India's share of global trade and generating employment.

Uploaded by

Hari Krishna
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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INDIA IN THE GLOBAL SETTING

INDIA-- AN EMERGING MARKET

India is emerging as one of the largest markets in the world. It is


indeed one of the growth markets of the future. While the market for a number of
products in the developed countries are saturating or declining. India presents an
expanding market because of the some factors, they are:

1. Existence of a large backlog of unsatisfied desires, like those for consumer


durables.
2. Fast increase in population.
3. Rising income.
4. The communication revolution and changing social attitudes giving rise to a
revolution of rising expectations and spurt in demand.

The Indian economy presents a mixed picture of problems and opportunities.


India is the second most populous nation in the world. However, as the population of
India is growing much faster than that of china, in future the population of India could
exceed that of China, although now China’s population is about 30 per cent higher than
that of India. China has nearly three times the land area of India, indicating that
considering the geographical size the population problem is the most serious in India.

In terms of per capita income, India is one of the poorest countries of the
world. India with about 17 per cent of the world population produces only about 1.6 per
cent of the world GDP. In purchasing power parity terms, it is about 5.5 per cent. India
with a per capita GNI of $620 in 2004 ranked very low among the nations of the world.
The per capita income of India is less than half of the average per capita income of the
developing countries. However, now it is higher than that of low income economies.

EXIM POLICY

EXIM Policy is the export import policy of the government that is announced every
five years. It is also known as the Foreign Trade Policy. This policy consists of
general provisions regarding exports and imports, promotional measures, duty
exemption schemes, export promotion schemes, special economic zone programs
and other details for different sectors. Every year the government announces a
supplement to this policy.
The Govt. of India, Ministry of Commerce and Industry announce Export Import
Policy every five years. The current policy covers the period 2002-2007. The Export
Import Policy (Foreign Trade Policy) is updated every year on the 31st of March and
the modifications, improvements and new schemes are effective w.e.f. 1st April of
every year.

Context of New Foreign Trade Policy

Trade is not an end in itself, but a means to economic growth and national
development. The primary purpose is not the mere earning of foreign exchange, but
the stimulation of greater economic activity.
For India to become a major player in world trade, an all encompassing,
comprehensive view needs to be taken for the overall development of the country's
foreign trade.

While increase in exports is of vital importance, we have also to facilitate those


imports which are required to stimulate our economy. Coherence and consistency
among trade and other economic policies is important for maximizing the contribution
of such policies to development. Thus, while incorporating the existing practice of
enunciating an annual Foreign Trade Policy, it is necessary to go much beyond and
take an integrated approach to the developmental requirements of India's foreign
trade.

The Foreign Trade Policy is built around two major objectives. These are:

 To double our percentage share of global merchandise trade within the next five
years; and
 To act as an effective instrument of economic growth by giving a thrust to
employment generation.

Strategy

For achieving these objectives, the following strategies need to be adopted:

 Unshackling of controls and creating an atmosphere of trust and transparency to


unleash the innate entrepreneurship of our businessmen, industrialists and traders.
 Simplifying procedures and bringing down transaction costs.
 Neutralizing incidence of all levies and duties on inputs used in export products,
based on the fundamental principle that duties and levies should not be exported.
 Facilitating development of India as a global hub for manufacturing, trading and
services.
 Identifying and nurturing special focus areas which would generate additional
employment opportunities, particularly in semi-urban and rural areas, and developing
a series of 'Initiatives' for each of these.
 Facilitating technological and infrastructure up gradation of all the sectors of the
Indian economy, especially through import of capital goods and equipment, thereby
increasing value addition and productivity, while attaining internationally accepted
standards of quality.
 Activating our Embassies as key players in our export strategy and linking our
Commercial Wings abroad through an electronic platform for real time trade
intelligence and enquiry dissemination.

The new policy envasages merchant exporters and manufacturer exporters


business and industry as partners of government in the ahievement of its stated
objectives and goals.

The new EXIM policy is essentially a road map for the development of india’s
foreign trade. It contains the basic principles and points the direction in which we
propose to go. By virtue of its very dynamics, a trade policy cannot be fully
comprehensive in all its details. It would naturally require modification from time to
time. We propose to do this through continuous updating, based on the inevitable
changing dynamics of international trade. It is in partnership with business and
industry that we propose to erect milestones on this roadmap. With a view to doubling
our percentage share of global trade within 5 years and expanding employment
opportunities, especially in semi urban and rural areas, certain special focus initiative
have been identified for the agriculture, handlooms, handicrafts, jems and jwellery
and leather sectors.

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