Good afternoon

&
Welcome
to the
Presentation on India’s Trade
Reforms 1991-2014
In this presentation We will take you through the

• Trends of the Trade Policies 1991 to 2004,

• Highlights of trade policies 2004 to 2009,
• Highlights of the Trade Policy 2009-2014 .

So Sit back, Relax and Enjoy while we breeze you

from the desperate times of 1991 to the high thrills
Of US $300 Billion foreign exchange reserves in
2009.
Economic Reforms in India since 1991-2004
•India was a late-comer to economic reforms, embarking on the
process in earnest only in 1991, in the wake of an exceptionally
severe balance of payments crisis.

•Many countries in East Asia achieved high growth and poverty

reduction through policies which emphasized greater export
orientation and encouragement of the private sector.
•India took some steps in this direction in the 1980s,

•But only in 1991 that the government signal a systemic shift to

a more open economy with
- Greater reliance upon market forces,
- A larger role for the private sector including foreign
investment,
- A restructuring of the role of government.
 India’s economic performance in the post-reforms period has
many positive features:

• The average growth rate in the ten year period from 1992-93 to 2001-02
was around 6.0 percent,
• Though this growth record is only slightly better than the annual average
of 5.7 percent in the 1980s, but it can be argued that the 1980s growth
was unsustainable, fuelled by a buildup of external debt which
culminated in the crisis of 1991. In sharp contrast,
• Growth in the 1990s was accompanied by remarkable external stability
despite the East Asian crisis.
• Poverty also declined significantly in the post-reform period, and at a
faster rate than in the 1980s according to some studies.
• However, the ten-year average growth performance hides the fact that
while the economy grew at an impressive 6.7 percent in the first five
years after the reforms,
• it slowed down to 5.4 percent in the next five years. But slowed down
after the East Asian crisis,
• The annual growth of 5.4 percent was much below the target of 7.5
percent which the government had set for the period.
India’s economic performance in the post-reforms period has many
positive features:
This Led to questions about the effectiveness of the reforms.
World economic growth was slower in the second half of the
1990s and that would have had some dampening effect, but
India’s dependence on the world economy is not large enough for
this to account for the slowdown.

This policy changes cover five major areas:

•Fiscal deficit reduction,
•Industrial and trade policy,
•Agricultural policy,
•Infrastructure development
•Social sector development
we shall discuss the cumulative outcome of 18 years of trade
policies only in this presentation.
Before we discuss the Trade policy it is important to
understand the factors that necessitated the reforms:

• Fiscal profligacy that caused of the balance of

payments crisis in 1991,

• Reduction in the fiscal deficit was therefore an

urgent priority at the start of the reforms.

• The combined fiscal deficit of the central and

state governments was 9.4% of GDP in 1990-
91 and was going out of control.
Reforms in Industrial and Trade Policy
– Reforms in industrial and trade policy were a central focus of
much of India’s reform effort in the early stages.

– Industrial policy prior to the reforms was characterized by

multiple controls over private investment which limited the
areas in which private investors were allowed to operate, and
often also determined the scale of operations, the location of
new investment, and even the technology to be used.

– The industrial structure that evolved under this regime was

highly inefficient and needed to be supported by a highly
protective trade policy,
Industrial Policy (not delving deeply into it)

• Industrial policy has seen the greatest change in

the Economic reforms, As a result

• The list of industries reserved solely for the

public sector covering 18 industries was
reduced to 3.

• Monopolies and Restrictive Trade Practices

Act was abolished and replaced with more
open Restrictive trade policies Act.
 TRADE POLICY- 1991 TO 2004
First element of the Trade Policy:
 

Trade policy reform has made progress though the

pace was slower than industrial liberalization.
Before the reforms, trade policy was characterized by

– high tariffs and all pervasive import restrictions.

– Imports of manufactured consumer goods were
completely banned.
– For capital goods, raw materials and intermediates,
certain lists of goods were freely importable, but for most
items where domestic substitutes were being produced,
imports were only possible with import licenses.
– The criteria for issue of licenses were non transparent,
endemic delays and corruption unavoidable.
So what did these ERs Policy do??? The economic reforms sought
To phase out import licensing
– Import licensing defended on the grounds of managing the balance of payments,
were removed and any BOP crisis was effectively managed through exchange rate
flexibility

– Import licensing was abolished relatively early for capital goods and intermediates,
became freely importable in 1993, with flexible exchange rate regime.
 
To reduce import duties
– Removing quantitative restrictions on imports of capital goods and intermediates
was relatively easy, because the number of domestic producers was small.

– In the case of final consumer goods it was difficult because the number of domestic
producers affected was very large on account of the consumer goods industry being
reserved for small scale production.

These quantitative restrictions on imports of manufactured consumer goods

and agricultural products were removed on April 1, 2001, because of a ruling by
a W T O dispute panel on a complaint by the United States.
The second element of Trade Policy
Lowering Tariff protection:
 
Progress in reducing tariff protection was even slower,
• The weighted average import duty rate declined from the very high level of 72.5
percent in 1991-92 to 24.6 percent in 1996-97.
• However, the average tariff rate then increased by more than 10 percentage
points in the next four years.
• The government returned to reducing tariff protection In February 2002.
• The peak duty rate was reduced to 30 percent,
• A number of duty rates at the higher end of the existing structure were lowered,
• A number of low end duties were raised to 5 percent.
• The weighted average duty rate was 29 percent in 2002-03.
• India’s tariff levels were significantly lower than in 1991,(but remained highest in
the developing world).
• The weighted average import duty in China and South East Asia was about half
the Indian level. The government had announced that average tariffs would be
reduced to around 15 percent by 2004,
But even if this was implemented, tariffs in India would be much higher than China
(which has committed to reduce weighted average duties to about 9 percent by
2005 as a condition for admission to the World Trade Organization).
Foreign Direct Investment
– Liberalizing foreign direct investment was another
important part of India’s reforms,

• The belief was that this would

– Increase the total volume of investment in the

economy,

– Improve production technology,

– Increase access to world markets.

Foreign Direct Investment
• The policy now allows 100 percent foreign ownership in a large number of
industries and majority ownership in all except banks, insurance companies,
telecommunications and airlines.

• Procedures for permission were simplified by listing industries that are eligible
for automatic approval up to specified levels of foreign equity (100 percent, 74
percent and 51 percent).

• Potential foreign investors investing within these limits only need to register
with the Reserve Bank of India.

• For investments in other industries, or for a higher share of equity than is

automatically permitted in listed industries, applications are considered by a
Foreign Investment Promotion Board that was set up for speedy decisions.

• In 1993, foreign institutional investors were allowed to purchase shares of listed

Indian companies in the stock market, opening a window for portfolio
investment in existing companies.
What were the expectations of these
reforms in FDI??

• Generate faster industrial growth

• Greater penetration of world markets in

industrial products,
What have reforms in FDI result in??
This has led to significant changes.
• Indian companies have upgraded their technology
• Expanded to more efficient scales of production.
• Restructured through mergers and acquisitions
• Re-focused their activities to concentrate on areas of core competence.
• New dynamic firms have displaced older and less dynamic ones:
• Of the top 100 companies ranked by market capitalization in 1991, about
half are no longer in this group.
• Foreign investment inflows increased from virtually nothing in 1991 to
about 0.5 percent of GDP.
• Though this figure remains much below the levels of foreign direct
investment in many emerging market countries (not to mention 4
percent of GDP in China), the change from the pre-reform situation is
impressive.
• The presence of foreign-owned firms and their products in the domestic
market has added greatly to the pressure to improve quality.
 How has the performance been ???
Honestly it was disappointing!!!!
• Industrial growth increased sharply in the first five
years after the reforms, but slowed to an annual rate
of 4.5 percent in the next five years.
• Export performance has improved, but modestly.
• The share of exports of goods in GDP increased from
5.7 percent in 1990-91 to 9.7 percent, but this
reflected in part due to exchange rate depreciation.
• India’s share in world exports, which had declined
steadily since 1960, increased slightly from around 0.5
percent in 1990-91 to 0.6 percent in 1999-2000,
• India’s manufactured exports had a 0.5 percent share
in world markets for those items in 1990 and this rose
to only 0.55 percent by 1999.( Like the case in China
and southeast Asia),
 The causes for this modest export performance
• slow lowering import duties, this made India a high cost
producer and therefore less attractive as a base for export
production.
• Exporters have long been able to import inputs needed for
exports at zero duty, but the complex procedure for obtaining
the necessary duty-free import licenses typically involves high
transactions cost and delays.
• High levels of protection compared with other countries is also
the reason why foreign direct investment in India has been
much more oriented to the protected domestic market, rather
than using India as a base for exports.
• However, high tariffs are only part of the explanation for poor
export performance. The reservation of many potentially
exportable items for production in the small scale sector (which
has only recently been relaxed) was also a relevant factor.
• The poor quality of India’s infrastructure compared with
infrastructure in east and southeast Asia, is yet another.
Export of Services & Trade Policy 1991-2001
The one area which has shown robust growth through the 90s with
a strong export orientation is

– Software Development
– IT enabled services like
• Medical transcription,
• Backup accounting, and
• Customer related services
 
• Export earnings in this area have grown from $100 million in 1990-91 to over $6
billion in 2000-01,

• Expected to continue to grow at 20 to 30 percent per year,

India’s success in this area is one of the most visible achievements

of trade policy reforms which allow access to imports and
technology at exceptionally low rates of duty, since exports in this
area depend primarily on the improved telecommunications infrastructure.
 Labor Laws & Trade Policy

• Inflexibility of the labor market is a major factor reducing India’s

competitiveness in exports,
• Any firm wishing to close down a plant, or to retrench labor in any unit
employing more than 100 workers, can only do so with the permission
of the state government, and this permission is rarely granted.
• The increased competition in the goods market has made labor more
willing to take reasonable positions, because lack of flexibility only leads
to firms losing market share. This is important area of reform that has
yet to be addressed.
• The lack of any system of unemployment insurance makes it difficult to
push for major changes in labor flexibility unless a suitable contributory
system that is financially viable can be put in place.
• The government has recently announced its intention to amend the law
and raise the level of employment above which firms have to seek
permission for retrenchment from 100 workers at present to 1000 while
simultaneously increasing the scale of retrenchment compensation.
These gaps in reforms provide a possible explanation
• For the slowdown in industrial growth in the
second half of the 1990s.
• The initial relaxation of controls led to an
investment boom, but this could have been
sustained only if industrial investment had been
oriented to tapping export markets, as was the
case in east Asia.
• As it happened, India’s industrial and trade
reforms were not strong enough, nor adequately
supported by infrastructure and labor market
reforms to generate such a thrust.
Agriculture Reforms & Trade Policy1991-2001
• While the Economic Reforms excessively focused on industrial
and trade policy, they neglected agriculture which provides
the livelihood of 60 percent of the population.
• Agricultural growth in the second half of the 1990s
decelerated as proof of this neglect.
• There is a notion that trade policy changes have not helped
agriculture. The reduction of protection to industry, and the
accompanying depreciation in the exchange rate, has tilted
relative prices in favor of agriculture and helped agricultural
exports.
• The index of agricultural prices relative to manufactured
products has increased by almost 30 percent in the past ten
years.
• The share of India’s agricultural exports in world exports of
the same commodities increased from 1.1 percent in 1990 to
1.9 percent in 1999, whereas it had declined in the ten years
before the reforms.
Infrastructure Development & Trade Policy 1991 - 2001
Rapid growth in a globalized environment requires a well-
functioning infrastructure especially

• Electric power,
• Road and rail connectivity,
• Telecommunications,
• Air transport,
• Efficient ports.

These services were traditionally provided by public sector

monopolies, but since the investment needed to expand
capacity and improve quality could not be mobilized by the
public sector, these sectors were opened to private investment,
including foreign investment.
Major Successes
• Telecommunications - Exports of IT and ITES
depend on this.
• Air Transport development of airport
infrastructure and the privatization of Airlines
have led to faster and better connectivity for
exports.
• Ports – better and higher handling capacities,
faster TAT for imports and exports
• Road connectivity facilitating speedy goods
transportation to nearest export locations,
Failures 
• Electricity Generation & Distribution
 Financial Sector Reform & Trade Policy 1991-2001
• India’s reform program included wide-ranging reforms in the
banking system and the capital markets relatively early in the
process with reforms in insurance introduced at a later stage.
• Banking sector reforms included:
– Measures for liberalization,
– Dismantling the complex system of interest rate controls,
– Eliminating prior approval of the Reserve Bank of India for large loans,
– Reducing the statutory requirements to invest in government
securities;

• Measures designed to increase financial soundness, like

introducing capital adequacy requirements and other prudential
norms for banks and strengthening banking supervision,
• Measures for increasing competition like more liberal licensing
of private banks and freer expansion by foreign banks.
Financial Sector Reform & Trade Policy 1991-2001
Stock Market reforms

• factor limiting the efficiency of banks is the legal framework, which makes it very
difficult for creditors to enforce their claims.
• Reforms in the stock market were accelerated by a stock market scam in 1992
that revealed serious weaknesses in the regulatory mechanism,
• Reforms implemented include establishment of a statutory regulator,
• Promulgation of rules and regulations governing various types of participants in
the capital market and also activities like insider trading and takeover bids,
• Introduction of electronic trading to improve transparency in establishing prices

• Dematerialization of shares to eliminate the need for physical movement and

storage of paper securities.

This is to some extent reflected in the fact that foreign institutional investors have
invested a cumulative $21 billion in Indian stocks since 1993, when this avenue for
investment was opened.
 Where Did India Stand Globally?
International Trade of Select Countries in 2003
Country Exports Imports GDP Trade as % of GDP
(US$ bn.) (US$ bn.) (US$ bn.)
Korea 197.6 175.5 605.0 61.7
China 438.3 393.6 1446.9 57.5
Mexico 165.4 171.0 626.1 53.7
Russia 135.9 75.4 433.5 48.7
South Africa 38.7 35.0 160.1 46.0
Argentina 29.4 13.1 129.7 32.8
Brazil 73.1 48.3 492.1 24.7
India 57.0 74.3 588.8 22.3
Source: Economist Intelligence Unit
 India’s share in global merchandise exports: 0.8% (2003)
 India’s Export Performance
India's Export Performance (1999-2000 to 2003-04)

70000
52856 63623
60000
44147 43976
50000 47742
36760
US$ million

40000
30000
29751
20000
10000

0
1999-2000 2000-01 2001-02 2002-03 2003-04
All Commodities Years Agricultural & allied products
Ores & minerals Manufactured goods
Petroleum & crude products
 India’s Import Performance
India's Import Performance (1999-2000 to 2003-04)

90000
80000
77237
70000 61572
60000 51588
49799 50056 56613
US$ million

50000
40000
30000 37172

20000
10000
0
1999-2000 2000-01 2001-02 2002-03 2003-04

All Commodities Years

Petroleum crude & products Non-POL items
 Trade Policies in India 2004 - 2009
 Exim Policies

 Streamlined trade procedures

 Liberalised import regime
 Thrust on export orientation

 Medium Term Export Strategy, 2002

 1% share in global exports by 2007

 Foreign Trade Policy 2004-2009

 To double India’s share in global merchandise trade by 2009
 Special Economic Zones
The Government of India announced the introduction of Special
Economic Zones in April 2000 to achieve the following objectives:

• Generation of additional economic activity

• promotion of exports of goods and services
• Promotion of investment from domestic and foreign sources
• Creation of employment opportunities
• Development of infrastructure facilities

Special Economic Zone (SEZ) is defined as "a specifically delineated

duty free enclave and shall be deemed to be foreign territory for the
purposes of tradeoperations and duties and tariffs". SEZs are an
acknowledgement of the potential of export-led development
strategy in accelerating economic growth.
The Gov’t has converted eight EPZs located at
• Kandla and Surat (Gujarat),
• Cochin (Kerala),
• Santa Cruz (Mumbai-Maharashtra),
• Falta (West Bengal),
• Madras (Tamil Nadu),
• Visakhapatnam (Andhra Pradesh)
• Noida (Uttar Pradesh) into SEZs.
Since then 3 new SEZs commenced at
• Indore (Madhya Pradesh),
• Manikanchan - Salt Lake (Kolkata)
• Jaipur commenced operations.
The incentives and facilities offered to the units in SEZs for attracting
investments into the SEZs, including foreign investment
• Duty free import/domestic procurement of goods for
development, operation and maintenance of SEZ units
• 100% Income Tax exemption on export income for SEZ units under
Section 10AA of the Income Tax Act for first 5 years, 50% for next 5
years thereafter and 50% of the ploughed back export profit for
next 5 years.
• Exemption from minimum alternate tax under section 115JB of the
Income Tax Act.
• External commercial borrowing by SEZ units upto US $ 500 million
in a year without any maturity restriction through recognized
banking channels.
• Exemption from Central Sales Tax.
• Exemption from Service Tax.
• Single window clearance for Central and State level approvals.
• Exemption from State sales tax and other levies as extended by
the respective State Governments.
 The major incentives and facilities available to
SEZ developers
• Exemption from customs/excise duties for
development of SEZs for authorized operations
approved by the BOA.
• Income Tax exemption on export income for a block of
10 years in 15 years under
• Section 80-IAB of the Income Tax Act.
• Exemption from minimum alternate tax under Section
115 JB of the Income Tax Act.
• Exemption from dividend distribution tax under
Section 115O of the Income Tax Act.
• Exemption from Central Sales Tax (CST).
• Exemption from Service Tax (Section 7, 26 and Second
Schedule of the SEZ Act).
 Exports from the functioning SEZs
during the last four years are as under

Year Exports (Crs) Growth

• 2003-2004 13,854 39%
• 2004-2005 18,314 32%
• 2005-2006 22,840 25%
• 2006-2007 34,615 52%
• 2007-2008 66,638 92%
 Foreign Trade Policy 2004-09

Quantum Jump in Merchandise Exports

Required:
 Enhance exports of major export

commodities
 Identify potential export commodities

 Diversify export destinations

 Foreign Trade Policy 2004-09
Focus on Africa, Latin America and China”
India could aim to achieve:

 US$ 18 billion in Africa’s Imports by 2007 from

US$ 3.8 bn in 2003-04
 US$ 4 bn in China’s imports by 2007 (in 64
identified groups) from US$ 0.86 bn in 2000
 US$ 1.8 bn in LAC’s imports by 2007 (in 100
identified groups) from US$ 0.6 bn in 2000
 Share in India’s Exports in 2003-04: Africa (6%); Latin
America (1.8%); China (4.7)
 Foreign Trade Policy 2004-09
Simplifying procedures and bringing down
transaction costs,

 Transaction costs are incurred at the pre and post-

production stages, and arise out from several
procedural complexities associated with
administrative processes, availability of finance
and transportation problems.
 For enhancing the growth of exports it is
important to reduce the transaction costs involved.
 Foreign Trade Policy 2004-09
Transaction Costs: International Experience
 Simplified and less stringent bureaucratic
procedures like single window clearance and
business friendly approach
 Better technology due to higher levels of foreign
investment, faster loading/unloading methods
 Flexible labour laws
 Cheap availability of power and raw materials,
 Freight incentives by the Government,
 Lower ocean freight rates due to greater
availability of vessels
 Foreign Trade Policy 2004-09
Special package for agriculture

 Duty free imports of capital goods

 Will lower production cost and hence improve
profitability

 Exports of medicinal plants & herbal

products facilitated
 Global imports of medicinal plants: US$ 1 bn (2001)
 India second largest exporter after China
 Potential to increase export to Rs. 1750 crore by 2006-
07 and more than Rs. 2500 crore by 2009-10.
 Global market for Herbal products: US$ 80 bn
 India’s exports of Herbal products: US$ 280 mn (2002-
03)
 Foreign Trade Policy 2004-09
Textile sector incentives

 Duty free entitlement for garments &

handicrafts increased from 3% to 5%
 Will help exporters to move up the value chain
 However, further incentives required to
consolidate India’s position in the post-MFA era

 Handicraft Special Economic Zone to be

established
 Will contribute to strong growth in handicraft
exports
 Will generate employment opportunities
 Foreign Trade Policy 2004-09
Export Promotion Schemes

 Target Plus scheme introduced

 Will further boost exports from the successful
exporters

 Vishesh Krishi Upaj Yojana to boost horticulture exports

 Global trade in horticulture: US$ 79 bn (1999)
 India’s exports: Rs. 1830 cr (1999-2000)
 Success of AEZs for horticulture depend on “the
ability of the states to overcome existing
shortcomings in infrastructure, institutional
mechanism and policy and programme support to
achieve desired export orientation”
 Foreign Trade Policy 2004-09
Export Oriented Units
 Exemption from service tax

 EOUs permitted to retain 100% of export

earnings in EEFC accounts
 Income tax benefits to DTA units which
convert to EOUs
 All these should considerably increase export
growth from the EOUs
 Foreign Trade Policy 2004-09
Final Observations

 Import of second hand capital goods allowed

without age restrictions
 No outdated technology should be imported
 “Special Focus Initiatives”
 Could be extended to other sectors of high
export orientation like chemicals &
pharmaceuticals
 Export orientation of FDI should be increased
 LOW SHARE OF FDI & Exports
Sector Share in FDI (%)

Transportation industry 7.50

Computer software industry 6.46

Chemicals & pharmaceuticals 5.70

Textiles 1.20

Leather & leather goods 0.20

Services (incl. Hotels & Tourism) 8.37

WTO (The history)Uruguay Round, Marrakesh
The first meeting held at Seattle led to the emergence of many
controversies between developed and developing countries on
• Agricultural subsidies,
• Environment,
• Child labor.

• A significant development was emergence of G-20 nations

including India, Brazil and China at Cancun in 2003.

• In the initial stages these countries, had played a negligible role in

earlier negotiating rounds.

• The focus was exclusively on the interplay between the European

and the American trade representatives,
 WTO Meeting Cancun 2003
• At Cancun in 2003, this dynamics finally changed. Brazil took a
dramatic stand, forcing the world to pay attention to its interests.
• As against the past years where the United States, the EU, Japan,
and Canada had set the terms of the negotiations, the scenario
changed,
• After Cancun (2003), however, the agenda was set by a new Group
of five, which included the United States, the EU, Brazil, India, and
Australia
• Cancun thus represented a triumph for developing countries, which
suddenly gained recognition and a political stake in the
negotiations.
• The G-20 even managed to demand successfully and the EU and
the United States were asked to come back with improved offers
on agricultural subsidies and trade barriers.
 WTO Meeting Hong Kong’2005
In WTO ministerial conference held at Hong Kong in Dec’2005,
The issues at stake for India was
• trade in services,
• agriculture and non-agriculture market access.
• The main achievement of the Hong Kong Ministerial,
• An agreement on the elimination of export subsidies in agriculture,
• Some reduction in domestic support for agriculture
• Commitments on trade facilitation to indicate significant progress.

However, no progress was possible on

• agricultural and non-agricultural tariffs,

• on services.
 Highlights of 2009-14 Trade policy

• The government recently announced the

Foreign Trade Policy for the next 5 years.. the
policy states that the govt wants to double the
exports by 2014 and double the share into
world exports by 2020.
 Highlights of 2009-14 Trade policy

• 1.26 new markets have been added under

Focus Market Scheme (FMS).

• 2. Incentive available under FMS raised from

2.5% to 3%.

• 3. Incentive available under Focus Product

Scheme (FPS) raised from 1.25% to 2%.
 Highlights of 2009-14 Trade Policy

• 26 new markets have been added under Focus

Market Scheme (FMS).

• Incentive available under FMS raised from

2.5% to 3%.

• Incentive available under Focus Product

Scheme (FPS) raised from 1.25% to 2%.
 Highlights of 2009-14 Trade Policy
• The government Widens scope for products to be
included for benefits under FPS. Additional
engineering products, plastic and some electronics
get a look in.

• Market Linked Focus Product Scheme (MLFPS)

expanded by inclusion of products like
pharmaceuticals, textile fabrics, rubber products,
glass products, auto components, motor cars, bicycle
and its parts.etc. Benefits to these products will be
provided, if exports are made to 13 identified
markets (Algeria, Egypt, Kenya, Nigeria, South Africa,
Tanzania, Brazil, Mexico, Ukraine, Vietnam,
Cambodia, Australia and New Zealand).
 Highlights of 2009-14 Trade policy
• To aid technological up gradation of export sector,
EPCG Scheme at Zero Duty has been introduced.

• Jaipur, Srinagar and Anantnag have been recognized

as' Towns of Export Excellence’ for handicrafts;
Kanpur, Dewas and Ambur for leather products; and
Malihabad for horticultural products.

• Export obligation on import of spares, moulds etc.

under EPCG Scheme has been reduced by 50%.
 Highlights of 2009-14 Trade policy
• Taking into account the decline in exports, the facility
of Re-fixation of Annual Average Export Obligation
for a particular financial year in which there is decline
in exports from the country, has been extended for
the 5 year Policy period 2009-14. Support for Green
products and products from North East

• Focus Product Scheme benefit extended for export of

‘green products’ and some products from the North
East.

• To neutralize duty incidence on gold Jewellery

exports, it has now been decided to allow Duty
Drawback on such exports.
 Highlights of 2009-14 Trade policy
• In an Endeavour to make India a diamond
international trading hub, it is planned to
establish “Diamond Bourse(s)”

• Other sectors which incentives are given are Tea,

Pharmacy and Handloom.

• The policy also states the commitment of the

government to reduce the transaction costs.
 Acknowledgements

This presentation has been drawn heavily from

• Has gradualism worked for India- Montek Singh Ahluwalia,
• An overview of India’s economic policies – Dr. K.S.Rao,
• Implications of Foreign Trade Policy – S.R Rao, CGM, Exim Bank,
• Various papers of Planning Commission,
• Various papers of Ministry of finance.

Special Thanks to my colleagues in the group for their valuable inputs and
excellent advice in making this presentation:

• Jignesh Shah,
• Hanmant Pawar,
• Santosh kadam,
• Vinayak Surve
• Ritu Prabhakar
 Thanks for your patience
We hope you enjoyed this as
much as we enjoyed
preparing this presentation