Institute of Chartered Financial Analysts of India (ICFAI) University 2006 Certification Finance International and Trade – I - university paper

iv. To give consumers with good quality goods and services at internationally competitive prices while at the identical time creating a level playing field for the domestic producers.

The 1st National Foreign Trade Policy for the period 2004-09 incorporating the export and import policy for the period 2002-07 came into force with effect from first September, 2004 and shall remain in force up to 31st August, 2009. The Policy has for the 1st time tried to integrate the trade policy with the process of Country's Economic development.

The be new trade policy replaces the five-year Export-Import Policy of 2002-07. The most important factor that proves the likeness ranging from the new and existing policy is the implication of WTO agreement and the Free Trade Agreement ranging from India and other countries.

The new initiatives announced for agriculture and other thrust areas such as handicrafts, hand looms, gems and jewelry, and leather and footwear are appreciable.

Further, in the new trade policy export-oriented units will be exempted from the service tax and biotechnology parks in the country would get all the facilities of 100% export-oriented units. In addition to the above, the government has liberalized the EPCG benefits, the permission to transfer capital equipment to group companies, the extension of duty-free entitlement benefits to a few more sectors, duty relief on fuel consumed by exporting units, and determination to double exports and keep a special focus on agriculture, all as a part of focusing on the new policy.

Foreign Trade Policy (2004-2009) Highlights

1. Strategy

It is for the 1st time that a comprehensive Foreign Trade Policy is being notified. The Foreign Trade Policy takes an integrated view of the overall development of India's foreign trade.

The objective of the Foreign Trade Policy is two-fold:

i. To double India's percentage share of global merchandise trade by 2009; and

ii. To act as an effective instrument of economic growth by giving a thrust to employment generation, especially in semi-urban and rural areas.

The key strategies are:

i. Unshackling of controls;

ii. Creating an atmosphere of trust and transparency;

iii. Simplifying procedures and bringing down transaction costs;

iv. Adopting the fundamental principle that duties and levies should not be exported;

Earning:   Approval pending.