CONTEXT
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 Exim Policy, it is necessary to
go much beyond and take an integrated approach to the developmental
requirements of India's foreign trade. This is the context of the
new Foreign Trade Policy.
OBJECTIVES
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.
The Foreign Trade Policy is rooted in this belief and built around
two major objectives. These are: |
|
| (I) |
To double our percentage share of global merchandise trade within the next five years; and |
|
| (II) |
To act as an effective instrument of economic growth by giving a thrust to employment generation. |
|
|
STRATEGY
These objectives are proposed to be achieved by adopting, among others, the following strategies: |
|
| (I) |
Unshackling of controls and creating an atmosphere
of trust and transparency to unleash the innate entrepreneurship
of our businessmen, industrialists and traders. |
|
| (II) |
Simplifying procedures and bringing down transaction costs. |
|
| (III) |
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. |
|
| (IV) |
Facilitating development of India as a global hub for manufacturing, trading and services. |
|
| (V) |
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. |
|
| (VI) |
Facilitating technological and infrastructural upgradation 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. |
|
| (VII) |
Avoiding inverted duty structures and ensuring that our domestic sectors are not disadvantaged in the Free Trade
Agreements/Regional Trade Agreements/Preferential Trade Agreements that we enter into in order to enhance our exports.
|
|
| (VIII) |
Upgrading our infrastructural network, both physical and virtual, related to the entire Foreign Trade chain,
to international standards. |
|
| (IX) |
Revitalising the Board of Trade by redefining its role, giving it due recognition and inducting experts on
Trade Policy. |
|
| (X) |
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. |
|
|
PARTNERSHIP
The new Policy envisages merchant exporters and manufacturer exporters, business and industry as partners of Government
in the achievement of its stated objectives and goals. Prolonged and unnecessary litigation vitiates the premise of
partnership. In order to obviate the need for litigation and nurture a constructive and conducive atmosphere,
a suitable Grievance Redressal Mechanism will be established which, it is hoped, would substantially reduce
litigation and further a relationship of partnership.
The dynamics of a liberalized trading system sometimes results in injury caused to domestic industry on account of dumping.
When this happens, effective measures to redress such injury will be taken.
ROADMAP
This Policy is essentially a roadmap 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 updation, 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. |
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NEW DELHI
31ST AUGUST |
(KAMAL NATH)
MINISTER FOR COMMERCE & INDUSTRY,
2004 GOVERNMENT OF INDIA |
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