While India has gradually opened up its economy, its tariffs continue to be high when compared with other countries, and its speculation norms are still restrictive. This leads some to see India as a ‘rapid globalizer’ while others still see it as a ‘highly protectionist’ economy. The main focus of this page is the foreign trade policy of India.
Foreign trade concerning main legislation in India is the Foreign Trade (Development and Regulation) Act, 1992. The Act endow with the expansion and regulation of foreign trade by assisting imports into, and supplementing exports from, India and for matters associated therewith or incidental thereto. As per the requirements of the Act, the government:-
(i) may make necessities for assisting and controlling foreign trade;
(ii) may proscribe, confine and regulate exports and imports, in all or particular cases as well as subject them to exclusion;
(iii) is endorsed to formulate and proclaim an export and import policy and also modify the same from time to time, by notification in the Official Gazette;
(iv) Is also authoritative to appoint a 'Director General of Foreign Trade' for the purpose of the Act, including formulation and accomplishment of the export-import policy.
Nevertheless, in modern years, the government’s stand on trade and investment policy has demonstrated a marked shift from protecting ‘producers’ to benefiting ‘consumers’. This is revealed in its foreign trade policy of India for 2004/09 according to which, "For India to become a major player in world trade we have also to make possible those imports which are required to stimulate our economy." Along with economic transformations, globalization of the Indian economy has been the leading factor in devising the trade policies. The reform procedures pioneered in the subsequent policies have focused on liberalization, ingenuousness and lucidity. They have given export friendly surroundings by simplifying the procedures for trade facilitation.
The declaration of a new Foreign Trade Policy of India for a five year period of 2004-09, substituting the till now nomenclature of EXIM Policy by Foreign Trade Policy (FTP) is another step in this course. It takes an incorporated view of the overall development of India’s foreign trade and provides a roadmap for the development of this sector. A dynamic export-led growth strategy of doubling India’s share in global commodities trade (in the next five years), with a spotlight on the sectors having prospects for export expansion and prospective for employment generation, constitute the main lath of the policy.
All such events are expected to enhance India's international competitiveness and aid in auxiliary increasing the acceptability of Indian exports. The policy sets out the core intentions, identifies key strategies, spells out focus initiatives, delineates export incentives, and also addresses issues relating to institutional support including simplification of procedures relating to export activities.
India is now belligerently pushing for a more liberal global trade regime, especially in services. It has implicit a leadership role among developing nations in global trade debates, and played a critical part in the Doha negotiations. With economic reforms, globalization of the Indian economy has been the guiding factor in formulating the Foreign trade policy of India.
In accordance with the provisions of the Act, a "Directorate General of Foreign Trade (DGFT)" has been set up as an attached office of the Ministry of Commerce and Industry. It is leaded by the 'Director General of Foreign Trade' and is answerable for formulating and implementing the Indian Foreign Trade Policy with the main intent of promoting Indian exports. The DGFT also issues licences to exporters and supervises their consequent commitments through a network of 32 regional offices located at the following places:- Ahmedabad; Amritsar; Bangalore; Baroda (Vadodara); Bhopal; Kolkata; Chandigarh; Chennai; Coimbatore; Cuttack; Ernakulam; Guwahati; Hyderabad; Jaipur; Kanpur; Ludhiana; Madurai; Moradabad; Mumbai; New Delhi; Panaji; Panipat; Patna; Pondicherry; Pune; Rajkot; Shillong; Srinagar(Functioning at Jammu); Surat; Thiruvananthapuram; Varanasi; and Vishakhapatnam.
The coming years are sure to witness a vigorous export-led growth strategy of doubling India’s share in global merchandise trade with a focus on the sectors having prospects for export expansion. The rising potential for employment generation will constitute the main backbone for the Indian foreign trade policy.