For about 40 years (1950-90), foreign trade of India suffered from strict bureaucratic and discretionary controls. Beginning 1991, the Government of India introduced a series of reforms to liberalise and globalise the Indian economy. Reforms in the external sector of India were intended to integrate the Indian economy with the world economy. The major trade policy changes in the post-1991 period have included simplification of procedures, removal of quantitative restrictions, and substantial reduction in the tariff rates. India’s approach to openness has been cautious, contingent on achieving certain preconditions to ensure an orderly process of liberalisation and ensuring macroeconomic stability. Foreign Trade Policy (FTP) for the period 2015-20 announced by the Government on April 1, 2015 visualises increase in India’s exports of merchandise and services from US$ 465.9 billion in 2013-14 to approximately US$ 900 billion by 2019-20 and to raise India’s share in world exports from 2 percent to 3.5 percent. The products wherein India has the maximum presence in international market in terms of export share are spices, marine products, precious and semi-precious stones and textiles. Recent trends, however, indicate that the commodity structure of India’s exports has slowly begun to shift towards higher technology intensive manufactures. According to Trade Profiles, 2014 of the World Trade Organization (WTO), India’s share in total world exports was 1.66 percent in 2013 whereas its share in total world imports was 2.47 percent for the same year. The main destinations of India’s exports are European Union, United States, United Arab Emirates, China and Singapore. The greatest challenge facing the Indian economy is to enhance its productivity and competitiveness so as to achieve a sustained growth in exports of goods and services.

About the Author

Dr. Vibha Mathur is presently an Associate Professor in the Department of Commerce, Jesus and Mary College (JMC), University of Delhi, New Delhi. She received her M.Phil. and Ph.D. degrees from the Department of Commerce, Delhi School of Economics (DSE), University of Delhi. She has written extensively on India’s foreign trade and authored a number of books on the subject. The prominent ones include: Foreign Trade, Export-Import Policy and Regional Trade Agreements of India, WTO and India: Development Agenda for the 21st Century, and India-European Union Trade Prospects and the Impact of Euro. She was a visiting fellow at the European Commission and Parliament in Brussels, Belgium, in May 2001. In June 2005, she visited, as a guest, the University of Victoria, Melbourne, Australia. In March 2003, she was selected by the University Grants Commission (UGC), New Delhi for a post-doctoral research project titled: Birth of Euro and its Implications for India-Eurozone Trade. The project was successfully completed and submitted to UGC in May 2005. She has also completed another UGC project titled: Trade Liberalisation and its Impact on India-ASEAN Trade.

Table of Contents:
1. International Trade: Recent History and Emerging Scenario 1.1 Emergence of East Asian Economies and China 1.2 Trade Openness 1.2.1 Developing Countries and Trade Openness 1.3 Emergence of World Trade Organization (WTO) 1.4 Globalization and International Trade 1.4.1 Meaning of Globalization 1.4.2 Dimensions and Features of Globalization 1.4.3 Globalization and Developing Countries 1.4.4 Globalization and the Poor 1.4.5 Future of Globalization 1.5 Global Economic Crisis and International Trade 1.5.1 Period Preceding the Crisis 1.5.2 Genesis of the Present Crisis 1.5.3 Contagious Nature of Crisis and the Rejection of De-coupling Theory 1.5.4 Intensity of the Crisis 1.5.5 Damage Control Measures at World Level 1.6 Future Scenario of World Trade 2. India’s Post-Independence Trade Policy 2.1 Partition and the Aftermath 2.2 Depletion of Sterling Balances 2.3 Empire Dollar Pool 2.4 Devaluation of the Rupee in September 1949 2.5 Korean War and the Export Boom 2.6 Trade Agreement with Pakistan, 1950 2.7 Devaluation of the Rupee in June 1966 2.8 Import Substitution: Cornerstone of Trade Policy 2.9 Balance of Payments Crisis, 1991 2.10 East Asian Crisis 2.11 Initiation of Reforms in the Foreign Trade Sector 3. Legal and Institutional Framework for Foreign Trade 3.1 Constitutional Provisions and the Law 3.2 Department of Commerce, Ministry of Commerce and Industry 3.2.1 Subjects under the Administrative Control of the Department of Commerce 3.3 Attached and Subordinate Offices of the Department of Commerce 3.3.1 Attached Offices 3.3.2 Subordinate Offices 3.4 Autonomous Bodies under the Department of Commerce 3.4.1 Commodity Boards 3.4.2 Marine Products Export Development Authority, Cochin 3.4.3 Agricultural and Processed Food Products Export Development Authority (APEDA), New Delhi 3.4.4 Export Inspection Council (EIC), New Delhi 3.4.5 Indian Institute of Foreign Trade (IIFT), New Delhi 3.4.6 Indian Institute of Packaging (IIP), Mumbai 3.4.7 Indian Institute of Plantation Management (IIPM), Bangalore 3.5 Public Sector Undertakings 3.5.1 State Trading Corporation of India Limited (STC) 3.5.2 Metals and Minerals Trading Corporation of India (MMTC) 3.5.3 PEC Limited 3.5.4 ECGC Limited 3.5.5 India Trade Promotion Organisation (ITPO) 3.6 Advisory Bodies 3.6.1 Board of Trade (BOT) 3.6.2 Inter-State Trade Council 3.7 Other Organisations 3.7.1 Federation of Indian Export Organisations (FIEO) 3.7.2 Indian Council of Arbitration (ICA) 3.7.3 Indian Diamond Institute (IDI) 3.7.4 Footwear Design and Development Institute (FDDI) 3.7.5 National Centre for Trade Information (NCTI) 3.7.6 Price Stabilization Fund (PSF) Trust 3.7.7 GS1-India 3.7.8 India Brand Equity Foundation (IBEF) 4. Export-Import (EXIM) Policy: 1992-97, 1997-2002 and 2002-07 4.1 EXIM Policy, 1992-97 4.2 EXIM Policy, 1997-2002 4.2.1 Objectives 4.2.2 Salient Features 4.2.3 Modified EXIM Policy, April 1998 4.2.4 EXIM Policy, 1999-2000 4.2.5 EXIM Policy, 2000-01 4.2.6 EXIM Policy, 2001-02 4.3 EXIM Policy, 2002-07 4.3.1 Special Economic Zones (SEZs) 4.3.2 Employment Generation 4.3.3 Technology Upgradation 4.3.4 Growth-oriented 4.3.5 EXIM Policy, 2003-04 4.3.6 Mini EXIM Policy, January 2004 5. Foreign Trade Policy (FTP):2004-09, 2009-14 and 2015-20 5.1 Foreign Trade Policy (FTP), 2004-09 5.1.1 Objectives and Strategy 5.1.2 Special Focus Initiatives 5.1.3 New Export Promotion Schemes 5.1.4 Simplification, Rationalization and Modifications of Ongoing Schemes 5.1.5 Simplification of Rules and Procedures and Institutional Measures 5.1.6 Annual Supplement 2005-06 to FTP, 2004-09 5.1.7 Annual Supplement 2006-07 to FTP, 2004-09 5.1.8 Annual Supplement 2007-08 to FTP, 2004-09 5.1.9 Annual Supplement 2008-09 to FTP, 2004-09 5.1.10 Trade Facilitation Measures, February 2009 5.2 Foreign Trade Policy (FTP), 2009-14 5.2.1 Special Focus Areas 5.2.2 Market Diversification 5.2.3 Technological Upgradation 5.2.4 Support to Status Holders 5.2.5 Agriculture and Village Industry 5.2.6 Handlooms 5.2.7 Handicrafts 5.2.8 Gems and Jewellery 5.2.9 Leather and Footwear 5.2.10 Marine Sector 5.2.11 Electronics and IT Hardware Manufacturing Industries 5.2.12 Sports Goods and Toys 5.3 Foreign Trade Policy (FTP), 2015-20 5.3.1 Vision, Mission and Objectives 5.3.2 Whole-of-Government Approach 5.3.3 Addressing In-house Challenges 5.3.4 Aligning FTP with WTO 5.3.5 Market Strategy 5.3.6 Product Strategy 5.3.7 Brand Building 5.3.8 Anchoring Trade Policy in the Domestic Policy Framework 5.3.9 Focus of the FTP 5.3.10 Import Appraisal 5.3.11 Measures Needed to Achieve Objectives 6. India’s Exports: Composition, Destination, Issues and Concerns 6.1 Post-Independence Export Performance at a Glance 6.2 India’s Share in World Trade/Exports 6.3 Composition of Exports 6.4 Destination of Exports 6.5 Credit Flow to Export Sector 6.5.1 Working Group to Review Export Credit, 2005 6.6 Export Duties 6.6.1 Cesses on Exports 6.6.2 Export versus Import Duties 6.6.3 Export Tariff Policy 6.7 Export Strategy: Issues and Concerns 6.7.1 Competitiveness of Exports 6.7.2 Medium Term Export Strategy (MTES) 6.7.3 Restraining Domestic Consumption 6.7.4 Product Diversification 6.7.5 Export Infrastructure 6.7.6 Export Promotion Schemes 6.7.7 Trade Facilitation 6.7.8 Adhering to Standards 6.7.9 Building the India Brand 6.7.10 Digitisation and E-governance 6.7.11 Trade Remedial Measures 6.8 Future of India’s Exports 7. Product-wise Export Strategy 7.1 Project Exports 7.2 Information Technology (IT) Sector 7.3 Services Sector 7.4 Gems and Jewellery 7.5 Pharmaceutical Industry 7.5.1 Medical Devices/Equipments 7.6 Engineering Goods 7.7 Chemicals 7.8 Electronics Goods 7.9 Leather Products 7.10 Textiles 7.10.1 Readymade Garments 7.11 Carpets 7.12 Iron Ore 7.13 Agriculture Exports 7.13.1 Infrastructure and Technology 7.13.2 Food Processing and Value Addition 7.13.3 Market and Product Development 7.13.4 Organic Exports 7.13.5 Plantation Products 8. Region-wise and Country-wise Export Strategy 8.1 Region-wise Export Strategy 8.1.1 European Union (EU) 8.1.2 South-East Asia 8.1.3 Africa 8.1.4 Commonwealth of Independent States (CIS) 8.1.5 Latin America 8.2 Country-wise Export Strategy 8.2.1 US 8.2.2 Japan 8.2.3 Russia 8.2.4 China 9. Export Promotion Councils (EPCs) 9.1 Engineering Export Promotion Council (EEPC) 9.2 Project Exports Promotion Council of India (PEPC) 9.3 Chemicals and Allied Products Export Promotion Council (CAPEXIL) 9.4 Council for Leather Exports (CLE) 9.4.1 Core Objectives of CLE 9.4.2 Activities and Services of CLE 9.5 Sports Goods Export Promotion Council (SGEPC) 9.6 Gem and Jewellery Export Promotion Council (GJEPC) 9.7 Shellac and Forest Products Export Promotion Council (SHEFEXIL) 9.7.1 SHEFEXIL’s North-East Mandate 9.8 The Cashew Export Promotion Council of India (CEPCI) 9.9 The Plastics Export Promotion Council (PLEXCONCIL) 9.10 Pharmaceuticals Export Promotion Council of India (Pharmexcil) 9.10.1 Services Rendered by Pharmexcil 9.11 Indian Oilseeds and Produce Export Promotion Council (IOPEPC) 9.12 Services Export Promotion Council (SEPC) 10. Special Economic Zones (SEZs) 10.1 Special Economic Zones Act, 2005 10.2 Approval Mechanism and Administrative Set up of SEZs 10.2.1 Approval Mechanism 10.2.2 Administrative Set up 10.3 Criteria for Approval 10.4 Conversion of EPZs into SEZs 10.4.1 How are SEZs Different from EPZs? 10.4.2 Will EPZ Conversion Help? 10.5 Incentives and Facilities Offered to Units in SEZs 10.6 Incentives and Facilities Available to SEZ Developers 10.7 Apprehensions and Concerns 10.8 SEZs and National Security 10.9 Lessons from China 10.9.1 Size of SEZ 10.9.2 Customs Regulations 10.9.3 Incentives Package 10.9.4 Labour Laws 10.9.5 Involvement of State and Local Authorities 10.9.6 DTA Sales 10.9.7 Foreign Investment and Technology 10.10 Issues Relating to SEZs 10.10.1 Impact of Direct Tax Code (DTC) 10.10.2 Goods and Services Tax (GST) 10.10.3 Power Generation and Distribution 10.10.4 Dual Control and Co-ordination 10.10.5 Disinvestment 11. India’s Regional Trade Agreements (RTAs) 11.1 India’s Look East Policy 11.2 South Asia Free Trade Area (SAFTA) 11.2.1 Rules of Origin 11.2.2 Mechanism for Compensation of Revenue Loss (MCRL) for the Least Developed Contracting States 11.2.3 Technical Assistance to Least Developed Contracting States in Agreed Areas 11.2.4 Implementation of SAFTA Agreement 11.3 ASEAN and India 11.4 India-Sri Lanka Free Trade Agreement (ISLFTA) 11.5 India-Thailand Comprehensive Economic Cooperation Agreement (CECA) 11.6 Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) Free Trade Agreement (FTA) 11.7 India-Singapore Comprehensive Economic Cooperation Agreement (CECA) 11.8 Asia Pacific Trade Agreement (APTA) 11.9 India-Chile Preferential Trade Agreement (PTA) 11.10 India-South Korea Comprehensive Economic Partnership Agreement (CEPA) 11.11 India-Gulf Cooperation Council (GCC) Free Trade Agreement (FTA) 11.12 India-Japan Comprehensive Economic Cooperation Agreement (CECA) 11.13 India-Malaysia Comprehensive Economic Cooperation Agreement (CECA) 11.14 India-Mauritius Comprehensive Economic Cooperation and Partnership Agreement (CECPA) 11.15 India-SACU Preferential Trade Agreement (PTA) Negotiations 11.16 India-Pakistan Trading Arrangement 11.17 India-Nepal Treaty of Trade 11.17.1 Treaty of Trade 11.17.2 Treaty of Transit 11.17.3 Agreement of Cooperation to Control Unauthorized Trade 11.17.4 Inter-Governmental Committee (IGC) at Commerce Secretary-level 11.18 India-EU Broad-based Trade and Investment Agreement 11.19 India-European Free Trade Association (EFTA) Negotiations on Broad-based Bilateral Trade and Investment Agreement 11.20 Regional Comprehensive Economic Partnership (RCEP) Agreement among ASEAN + 6 (Australia, China, India, Japan, Korea, and New Zealand) 11.21 Global System of Trade Preferences (GSTP) 11.22 Impact and Utilisation of FTAs 12. World Trade Organization (WTO) and India 12.1 Establishment of WTO 12.2 Functions of WTO 12.2.1 Trade Negotiations 12.2.2 Implementation and Monitoring 12.2.3 Dispute Settlement 12.2.4 Building Trade Capacity 12.2.5 Outreach 12.3 Anti-dumping and Subsidies Agreements 12.4 Agreement on Textiles and Clothing (ATC) 12.4.1 Textile Sector in the Post-Quota Era 12.4.2 Implications for India 12.4.3 Measures Taken by the Government 12.5 Fifth Trade Policy Review (TPR) of India 12.5.1 Openness of India’s Trading Regime 12.5.2 Gap between India’s Bound and Applied Rates on Agricultural Products 12.5.3 Export Incentives 12.5.4 FDI Policy 12.5.5 Intellectual Property (IP) Policies and Enforcement 12.5.6 Government Procurement 12.5.7 Sanitary and Phyto-sanitary (SPS) and Technical Barriers to Trade (TBT) Measures 12.5.8 Export Restrictions 12.5.9 Other Issues 12.6 Doha Round of Negotiations and India 12.7 WTO Conference in Bali and India 12.7.1 Trade Facilitation (TF) 12.7.2 Public Stockholding for Food Security Purposes 12.7.3 Duty Free Quota Free (DFQF) Market Access for Least Developed Countries (LDCs) Bibliography Index