Export Import Policy (EXIM Policy)

 

EXIM Policy: An Overview

EXIM Policy (Export-Import Policy), also known as the Foreign Trade Policy (FTP), is a set of guidelines and instructions formulated by the government of a country to regulate its imports and exports. The EXIM policy serves as a framework to enhance the competitiveness of domestic goods in the international market, boost exports, manage imports, and integrate the national economy with the global economy.

Objectives of the EXIM Policy

The primary objectives of the EXIM policy are:

1.      To Promote Exports: The policy aims to increase the volume and value of exports to improve the country’s balance of payments and foreign exchange reserves. This is achieved through various incentives, schemes, and promotional measures.

2.      To Enhance Competitiveness: EXIM policy seeks to make domestic industries globally competitive by providing them access to the latest technology, raw materials, and intermediate goods at competitive prices.

3.      To Facilitate Imports: The policy ensures the smooth import of essential goods, such as raw materials, capital goods, and technology, needed for economic growth and development.

4.      To Regulate Trade: The policy lays down rules and regulations for export and import activities, aiming to streamline and simplify procedures to reduce costs and improve ease of doing business.

5.      To Diversify Export Markets: EXIM policy encourages the exploration of new markets to reduce dependence on a few traditional markets and enhance export earnings.

6.      To Integrate with the Global Economy: The policy aims to align the country's trade practices with global standards and facilitate its integration into the global trading system.

7.      To Promote Sustainable Development: By encouraging the export of environmentally friendly products and adopting green trade practices, the policy aims to achieve long-term sustainable growth.

EXIM Policy in the Indian Context

India's EXIM policy, also known as the Foreign Trade Policy (FTP), is formulated by the Ministry of Commerce and Industry. It outlines the country's trade strategy for a set period, providing a comprehensive framework to promote exports and regulate imports. The current FTP (2023-2028) was introduced on April 1, 2023, and focuses on achieving ambitious export targets, enhancing trade facilitation, and promoting India's integration into the global supply chain.

Key Features of India's EXIM Policy

1.      Target-Driven Approach:

• The current policy aims to achieve exports worth $2 trillion by 2030, with $1 trillion each from merchandise and services exports. This target-driven approach provides a clear roadmap for stakeholders, aligning efforts towards a common goal.

2.      Promotion of Exports through Schemes:

• India’s EXIM policy includes various incentive schemes like the Remission of Duties and Taxes on Exported Products (RoDTEP), Export Promotion Capital Goods (EPCG), and Advance Authorization Scheme to support exporters by reimbursing taxes, providing duty-free imports of capital goods, and offering duty exemptions on imported inputs used in export production.

3.      Focus on Emerging Sectors:

• The policy emphasizes sectors like pharmaceuticals, high-tech manufacturing, and e-commerce to boost India's export capacity. It encourages value-added exports rather than the export of raw materials.

4.      Digital Trade Facilitation:

• The EXIM policy promotes the digitalization of trade processes to enhance transparency, reduce transaction costs, and ensure faster clearances. Initiatives like the Single Window Interface for Facilitating Trade (SWIFT) and the Electronic Data Interchange (EDI) system are part of this effort.

5.      Special Economic Zones (SEZs) and Export-Oriented Units (EOUs):

• The policy encourages the development of SEZs and EOUs to create export hubs that benefit from tax incentives, infrastructural support, and regulatory simplifications.

6.      Support for MSMEs and Small Exporters:

• Recognizing the role of Micro, Small, and Medium Enterprises (MSMEs) in export growth, the policy includes measures to facilitate their integration into the global market through capacity-building programs, credit facilitation, and market access initiatives.

7.      Market Diversification:

• To reduce dependence on traditional export markets, the policy promotes market diversification by exploring new regions like Latin America, Africa, and the CIS (Commonwealth of Independent States) countries.

8.      Sustainability and Green Trade:

• India's EXIM policy aims to promote environmentally sustainable trade practices by encouraging exports of green products and adopting eco-friendly production processes.

India's EXIM Policy, or Foreign Trade Policy, helps strengthen the manufacturing sector and trading systems to effectively compete on a global scale. It enhances foreign exchange reserves and capital flows through Foreign Direct Investment (FDI) and aims to increase trade to promote job creation and overall economic growth.