EXIM Policy
The Export-Import Policy (EXIM Policy), announced under the Foreign Trade (Development and Regulation Act), 1992, would represent the level of international trade rules or liberalization, as well as the export promotion initiatives. Although the EXIM Policy is declared for a five-year term, a policy is issued on March 31st of each year, within the general framework of the Five Year Policy, for the following year.
Since 1992, freedom has been a key component of EXIM policies. Licensing, quantity constraints, and other regulatory and discretionary controls have been largely abandoned.
Every five years, the Union Commerce Ministry of the Government of India releases the integrated Foreign Trade Policy (FTP). This is also known as the EXIM Policy. This policy is updated every year with changes and new schemes. Every year, new plans take effect on the beginning day of the fiscal year, which is April 1. The Foreign Trade program, released on August 28, 2009, is a comprehensive program for the years 2009–2014.
A country’s export-import (EXIM) policy establishes the laws and regulations that govern its exports and imports. This policy is sometimes referred to as Foreign Trade Policy. It outlines the government’s policies and strategies for encouraging exports and controlling imports. This policy is revised on a regular basis to reflect changes in the local and international environments. In this strategy, the government’s stance to various sorts of exports and imports is communicated to different exporters and importers.
Export refers to selling products and services to other nations, while import refers to purchasing goods and services from other countries. In today’s globalized world, no economy can stay isolated from the rest of the globe. All developed and emerging countries rely heavily on exports and imports to drive economic growth. World commerce is expanding rapidly as a result of the expansion of international organizations such as the World commerce Organization, the United Nations Conference on Trade and Development, ASEAN, and others.
Objectives of the EXIM Policy
To support sustained development in exports such that they account for at least 1% of global goods commerce.
To promote long-term economic development by facilitating access to vital raw materials, intermediates, components, consumables, and capital goods necessary for increasing production and supplying services.
To improve the technical strength and efficiency of Indian agriculture, industry, and services, therefore increasing competitiveness and creating new job possibilities, and to promote the adoption of globally recognized quality standards.
To supply customers with high-quality products and services at competitive international pricing, while also leveling the playing field for local production.
Governing Body for Exim Policy
Section 5 of the Foreign Trade (Development and Regulation Act), 1992, authorizes the Indian government to notify the Exim Policy for a five-year period (1997-2002). The present Export Import Policy covers the years 2002–2007. The Exim Policy is amended annually on March 31st, with revisions, upgrades, and new schemes taking effect on April 1st of each year.
The Union Minister of Commerce and Industry generally announces any changes or revisions to the EXIM Policy, which are coordinated with the Ministry of Finance, the Directorate General of Foreign Trade, and the network of Dgft Regional Offices.
Exim Policy 1992–1997
On April 1, 1992, the Indian government established the Indian Exim Policy for the first time to liberalize imports and increase exports. The Export Import Policy was implemented over a five-year period to provide stability and consistency. However, the Central Government retains the right, in the public interest, to change the Trade Policy in accordance with the powers provided by Section 5 of the Act. Such a modification must be made by a notification published in the Indian Gazette.
The Export Import Policy is seen as a crucial milestone in India’s economic reforms.
Exim Policy 1997–2002
A new Export Import Policy was required to ensure the smooth operation of the Indian export and import sector. As a result, the Indian government implemented a new Exim Policy for the 1997-2002 fiscal year. This strategy has streamlined processes and reduced the contact between exporters and the Director General of Foreign Trade (DGFT) by halving the number of needed papers for export. Imports have been more liberalized, and greater attempts have been made to boost Indian exports in international commerce.
Objectives of the Exim Policy 1997–2002
The primary goals of the Export Import Policy 1997-2002 are as follows:
To expedite the economy’s transition from a low to a high level of economic activity by transforming it into a globally oriented, lively economy that benefits fully from growing global market possibilities.
To promote long-term economic development by providing access to vital raw materials, intermediates, components, consumables, and capital goods necessary for increased production.
Improve the technical strength and efficiency of Indian agriculture, industry, and services, hence increasing competitiveness.
To generate new jobs. Opportunities and promote adherence to globally acknowledged quality standards.
To provide excellent consumer items at reasonable pricing.
Highlights of the Exim Policy 1997–2002
Period of the Exim Policy
This policy is valid for five years, as opposed to three years under previous policies. It is applicable from April 1, 1997 to March 31, 2002.
Liberalization
Liberalization is a key aspect of the program.
It has significantly reduced license requirements, quantitative constraints, and other regulatory and discretionary controls. All commodities, excluding those on the negative list, may be freely imported or exported.
Import Liberalization.
Of the 542 goods on the restricted list, 150 have been moved to the Special Import Licence (SIL) list, with the remaining 392 transferred to the Open General Licence (OGL) list.
The Export Promotion Capital Goods (EPCG) Scheme
The tariff on imported capital goods under the EPCG Scheme has been cut from 15% to 10%.Under the zero duty EPCG Scheme, the threshold limit has been cut from Rs. 20 crore to Rs. 5 crore for agricultural and related sectors.5. Advanced Licence Scheme
The export requirement term under the Advance License Scheme has been increased from 12 to 18 months.
A six-month extension may be granted upon payment of 1% of the value of unfulfilled exports.
The Duty Entitlement Pass Book (DEPB) Scheme
The DEPB Scheme allows exporters to apply for loans based on a percentage of FOB value of exports in freely convertible currencies.
This credit may be used to import raw materials, intermediates, components, parts, and packaging materials for export purposes.
Impact of Exim Policy 1997-2002
(a) Globalisation of the Indian Economy
The Exim Policy 1997-02 established a framework for the globalization of the Indian economy. This is obvious from the policy’s first purpose, which says. “To accelerate the economy from low level of economic activities to- high level of economic activities by making it a globally oriented vibrant economy and to derive maximum benefits from expanding global market opportunities.” (b) Impact on the manufacturing sector in India
The EXIM policy 1997-02 included a number of reform initiatives aimed at boosting India’s industrial development and creating job opportunities in the non-agricultural sector. These include a drop in tariff from 15% to 10% under the EPCG plan, which allows Indian enterprises to import capital goods and is a significant step toward boosting the quality and productivity of Indian industry.
(b) The impact on agriculture
The Exim Policy 1997-2002 included several positive efforts to enhance the Indian agriculture economy. These actions include providing an extra SIL of 1% for agro product exports and permitting EOUs and other units in EPZs in agricultural sectors to sell 50% of their production in the domestic tariff area (DTA) after paying duty.
(d) Impact on Foreign Investment.
In order to stimulate foreign investment in India, the Exim Policy 1997-02 allowed for 100% foreign equity participation in 100% EOUs and EPZ entities.
(e) Impact on Quality Upgrade
The SIL entitlement of exporters with ISO 9000 certification has been enhanced from 2% to 5% of the FOB value of exports, encouraging Indian firms to conduct R&D programs and improve product quality.
(f) Impact on Self-Reliance.
The Exim Policy 1997-2002 effectively achieves one of India’s long-term goals of self-reliance. The Exim Policy accomplished this by promoting domestic procurement of raw materials in order to establish a strong local industry base. New incentives given to the Exim Policy have also benefited exporters.