Economic Environment of Business

Indias Trade Policy

Trends & Structural Changes in Foreign Trade

Trade has increased over the period 1950-2010 Commodity Wise Initially imports consisted basically capital goods Now they consist of Petroleum, Oil & Lubricants; Machinery; Gems & Jewellery; Edible oil; Iron & steel; Fertilizers; etc. Initially raw materials were exported

: PGM, 2011

Trends & Structural Changes in Foreign Trade

Now we still export Jute but its share is decreasing; Tea; Engineering goods; POL; Chemicals; Gems & Jewellery; Ready made Garments; Rice; Fish; Leather; etc. Recently exports of Electronic & Computer goods; Services & Projects have increased

Country Wise In 2007-08 we mainly imported from China; USA; Saudi Arabia; UAE; Iran; Germany; Switzerland & Singapore In 2007-08 we mainly exported to USA; UAE; China; Singapore; UK; Hong Kong & Germany
: PGM, 2011

Balance of Payments

Balance of Payments of a country is a systematic record of all economic transactions between the residents of a country & the rest of the world carried out in a specified period of time It is a broader term then Balance of Trade To ensure the balancing sometimes there is a surplus or a deficit India had a heavy deficit during the period 195676; it came down during 1976-1980 for some time; but during 1980-1991 it became severe; 1993-94 there was a turnaround & during 200104 for three consecutive years we had surplus on current account but the situation changed again in 2008-09 due to the global recession
: PGM, 2011

1991 New Trade Policy

1991 was a watershed year in trade policy Massive trade liberalization measures were adopted Major departure from earlier protectionist trade policies Before 1991 Import Substitution Post 1991 Export Promotion
: PGM, 2011

1991 New Trade Policy

Freer Export & Import; Decanalisation Rationalization of Tariff Structure Convertibility of rupee on current account Trading Houses; SEZs; EOU scheme Agricultural Export Zones; Setting up of FTWZs Market Access Initiative Scheme Focus on service exports; Served from India Five Thrust sectors-agriculture, handicrafts; handloom; Gems & Jewellery; Leather & footwear Reducing transactional costs & simplifying procedure Concessions & Exemptions : PGM, 2011

IMF
Objectives: International Monetary Co-operation Promotion of International Trade Exchange Rate Stability Establish a multilateral system of payments Correct disequilibrium in BOP by providing financial assistance Conditionalities: Carry out a programme of Balance of Payments adjustment

: PGM, 2011

World Bank
Objectives: Reconstruction & Development of its member countries Promote Foreign Private Investment Growth & development of International Trade Encourage loans Conditionalities: Liberalization; Privatization & Globalization Problems: Dominated by developed countries
: PGM, 2011