Upload
amit-kumar
View
226
Download
0
Embed Size (px)
Citation preview
8/8/2019 EXIM Policy Final
1/30
Group 3
8/8/2019 EXIM Policy Final
2/30
` Natural Resources are unequally distributed across the world
` No Nation is self sufficient and has all the goods that it needs.
` Cost of productions are different in different countries.
` To meet foreign exchange needs.
8/8/2019 EXIM Policy Final
3/30
` These are policies that aims at :
Developing export potential
Improving export performance
Encouraging foreign trade Creating favorable balance of payments position.
` EXIM Policies are prepared and announced by the Central
Government (Ministry of Commerce) and is regulated by
the Foreign TradeDevelopment & Regulation Act, 1992.
8/8/2019 EXIM Policy Final
4/30
` The first EXIM Policy was introduced on the 12th of April,
1985.
`
The Government of India notifies the EXIM Policy for aperiod of five years.
8/8/2019 EXIM Policy Final
5/30
` To accelerate the economy and to derive maximum benefitsfrom expanding global market opportunities.
` To stimulate growth by providing access to essential raw
materials, intermediates, components, and capital goodsrequired for production.
` To Enhance the technological strength and efficiency
` To generate new employment.
` To provide quality consumer products at reasonable prices
8/8/2019 EXIM Policy Final
6/30
The government appointed the Import and Export Policy
Committee headed by Mr.Mudaliar in 1962 to review
Governments trade policy.
The recommendations of the committee were accepted by the
government. Mr.V.P Singh, the then Commerce Minister,
announced the Export Import policy on the 12th of April,
1985.
The basic aim of the policy was to facilitate production
through easier and quicker access to imported inputs, impartcontinuity and stability of EXIM Policy, strengthen the export
production base, facilitate technological up gradation and
affect all possible savings in imports.
8/8/2019 EXIM Policy Final
7/30
Import policy post independence :-
Limited Imports to conserve foreign exchange
Industrialization centered
Modified to help export promotion
8/8/2019 EXIM Policy Final
8/30
Indias foreign trade policy during the last five decades may be
broadly split into three phases :-
Import substitution policy
Export drive policy
Export acceleration policy
8/8/2019 EXIM Policy Final
9/30
` In order to liberalize imports and boost exports, the
Government of India introduced the Indian EXIM Policy on
April 1, 1992.
` Export Import Policy was made for the duration of 5 years tobring stability and continuity.
` But The Central Government reserves the right to make any
amendments to the trade policy in public interest.
` This policy was thought to be a major step towards the
economic reforms of India.
8/8/2019 EXIM Policy Final
10/30
Liberalization Licensing, quantitative restrictions and other regulatory controls was
substantially eliminated.
Import liberalization
Out of 542 items from the restricted lists 150 items was transferred toSpecial Import License(SIL) and remaining 392 items have been
transferred to Open General license(OGL) List .
EPCG Scheme
Duty on imported capital goods reduced from 15% to 10%.
Advanced license scheme
Period for export obligation was extended from 12 months to 18 months.
8/8/2019 EXIM Policy Final
11/30
Globalization ofIndian economyAgriculture
Additional SIL of 1% for export of agro product, allowing EOUs and other
units in EPZ in agriculture sectors to 50%of their outputs in the domestic
tariff area (DTA) on payment of duty.
`
100% Foreign Equity participation In the case of 100% EOU, and units setup in EPZ.
Quality upgradation
` ISO 9000 certification has been increased from 2% to 5% of the FOB value
of exports. This has encouraged industries for R&D program.
Impact on self reliance` This policy encouraged domestic sourcing of raw materials in order to
build of a strong domestic production based.
8/8/2019 EXIM Policy Final
12/30
` Aims at achieving at least 1% share of world exports by 2006-2007 from thepresent level of 0.67%.
` Increasing commodity-country matrix from15 countries and 15 commoditiesto 25 countries and 220 export products under the Medium Term ExportStrategy.
` Providing better transport assistance for export of fresh and processedfruits, vegetables, floriculture, dairy products.
` Special emphasis has to be laid on promoting exports of cottage andhandicraft sectors.
` Export restrictions like registration and packaging requirements wereremoved on butter, wheat & wheat products, coarse grains.
8/8/2019 EXIM Policy Final
13/30
` Aims at doubling percentage share of global trade within 5years
` Expanding employment opportunities, especially in semi
urban and rural areas.
` Certain special focus initiative have also been identified foragriculture, handlooms, handicraft, gems & jewellery, leather
and Marine sectors.
` Several new institutions were established during this period
whose main functions were to help exporters.
Some of this institutions are-India Trade Promotion
Organization (ITPO),National Centre for Trade Information
(NCTI),
8/8/2019 EXIM Policy Final
14/30
` Agriculture :
Scheme called the Vishesh Krishi Upaj Yojana for promoting
the export of fruits, vegetables, flowers, minor forest produce,
and their value added products has been introduced.
Import of inputs such as pesticides shall be permitted underthe Advance License for agro exports.
` Handlooms :
Specific funds would be earmarked under MAI/ MDAScheme for promoting handloom exports.
8/8/2019 EXIM Policy Final
15/30
` Handicrafts: -New Handicraft SEZs shall be established which
would procure products from the cottage sector and do the
finishing for exports.
` Gems & Jeweler: -Import of gold of 18 carat and above shall be
allowed under the replenishment scheme.
` Leather and Footwear:-
Machinery and equipment for Effluent Treatment Plants shall be
exempt from basic customs duty.
Re-export of unsuitable imported materials such as raw hides &skins and wet blue leathers is permitted.
8/8/2019 EXIM Policy Final
16/30
` The Board of Trade was revamped and given a clear and
dynamic role in advising government on relevant issues
connected with Foreign Trade Policy.
` Development and promotion on SEZs. Special Economic Zones
(SEZ) are growth engines that can boost manufacturing, augment
exports and generate employment. The private sector has been
actively associated with the development of SEZs.
8/8/2019 EXIM Policy Final
17/30
` Special Economic Zone (SEZ) is a specifically delineated duty
free area. It require special fiscal and regulatory regime in
order to impart a hassle free operational regime encompassing
the state of the art infrastructure and support service.
` SEZ units may export goods and services including agro-
products, partly processed goods, sub-assemblies and
components except prohibited items .
8/8/2019 EXIM Policy Final
18/30
Balance ofPayment:
A systematic record of a nation's total payments to foreign
countries, including the price of imports and the outflow of
capital and gold, along with the total receipts from abroad,
including the price of exports and the inflow of capital and
gold.
They are further divided into the following:i) Capital Account
ii) Current Account
8/8/2019 EXIM Policy Final
19/30
It is the sum of the balance of trade (exports minus imports of
goods and services), net factor income (such as interest and
dividends) and net transfer payments (such as foreign aid).
8/8/2019 EXIM Policy Final
20/30
` The capital account records all transactions between adomestic and foreign resident that involves a change ofownership of an asset.
` It is the net result of public and private internationalinvestment flowing in and out of a country.
` It includes foreign direct investment, portfolio investment
(such as changes in holdings of stocks and bonds) and otherinvestments (such as changes in holdings in loans, bankaccounts, and currencies).
8/8/2019 EXIM Policy Final
21/30
` The freedom to convert the local financial assets into foreign
financial assets and vice-versa at market determined rates of
exchange.
` It is associated with the changes of ownership in
foreign/domestic financial assets and liabilities and embodies
the creation and liquidation of claims on, or by the rest of the
world.
8/8/2019 EXIM Policy Final
22/30
FDI and FII
FDI Foreign Direct Investment
Asserts controlling stake with inclination to control.a
firm.
FII
Stock Market / Securities market based investment with no
inclination to control
8/8/2019 EXIM Policy Final
23/30
` A committee on capital account convertibility was setup by the
Reserve Bank of India (RBI) under the chairmanship of former RBI
deputy governor S.S. Tarapore to "lay the road map" to capital
account convertibility.
` In 1997, the Tarapore Committee had indicated the preconditions for
Capital Account Convertibility.
The three crucial preconditions were :
1)fiscal consolidation,
2)a mandated inflation target
3)strengthening of the financial system.
23
8/8/2019 EXIM Policy Final
24/30
Raise the annual limit for the amount you are allowed to carry on
a private visit abroad from $25000 presently to $100000.
Permission to invest into foreign stock markets up to the extentof $25,000 in a year.
Banning the Participatory Notes to avoid/reduce money
laundering.
8/8/2019 EXIM Policy Final
25/30
` India has still followed a path of partial CAC and is moving
gradually towards full convertibility.
` Adoption of CAC in India was to make the movement of
capital and the capital market independent and open. This
would exert less pressure on the Indian financial market.
` Allocation of foreign funds in the country helps in equalizing
the capital return rates not only across different borders, butalso escalates the production levels.
8/8/2019 EXIM Policy Final
26/30
` It allows domestic residents to invest abroad and have a globallydiversified investment portfolio, this reduces risk and stabilizes theeconomy.
` NRI community will benefit tremendously if and when Capital
Account Convertibility becomes a reality du to various restrictionimposed on the movement of their wealth.
` Opens the gate for international savings to be invested in India. It isgood for India if foreigners invest in Indian assets this makesmore capital available for Indias development.
` Most importantly convertibility will induce competition againstIndian finance.
8/8/2019 EXIM Policy Final
27/30
` During the good years of the economy, it might experience
huge inflows of foreign capital, but during the bad times there
will be an enormous outflow of capital.
` There arises the possibility of misallocation of capital inflows.
Such capital inflows may fund low-quality domestic
investments, like investments in the stock markets or real
estates, and desist from investing in building up industries and
factories, which leads to more capacity creation andutilization, and increased level of employment.
8/8/2019 EXIM Policy Final
28/30
` An open capital account can lead to the export of domestic
savings which for capital scarce developing countries would
curb domestic investment.
8/8/2019 EXIM Policy Final
29/30
` According to us it is not the right time for our economy to go
for full Capital account convertibility as it will not benefit
Indian Economy owing to the fact that we are still a
developing economy and we still need priority sector
investments, free entry and exit of fund will merely lead toincrease in inequality.
8/8/2019 EXIM Policy Final
30/30
` THANK YOU