Trade Policy of India Since 1991-A Critical Evaluation and Comparative Study between Pre & Post Reform Periods
Foreign trade plays a very significant role in the economic, social, political and cultural life of nationals. Foreign trade is the way of economic development for every country especially for developing country like Indian. Given the multiplicity of social-economic permutation and combination, every country endeavors to protect and nurture its own inters first. International trade is becoming complex and highly competitive activity which has played a pivotal role in accelerating the pace of development. In the process of serving their own interest, the countries after create hindrances and try to lessen imports which provide subsidies and other benefits to their exporters for promoting them to export more. The countries world over are adopting various strategies to develop their industries and services such a way that they become self sufficient and still generate some exportable surpluses. In the process many countries are gradually opening up their market and are trying to complete and beat them in the market. India is also one of these countries.
Foreign Trade is a vital sector of a county’s national economy and contributes substantially to the economic welfare of the people and the development of resources. Economies of scale and international specialization as also the fruits of scientific and technological process in the world become more easily accessible through the foreign trade(1). In the context of planned economic development of developing nations an appropriate trade policy has become very necessary and significant. Today no counter in the world is self sufficient in the sense that it does not possess facilities for economical production of all the goods services that are consumed by its people. Probably no country can produce all the goods that it needs. Therefore, there is need to trade with others(2). Developing country needs more goods to feed a rapidly growing population. Exports can be a leading sector in growth(3). This means that higher earnings from higher marketability of a country’s commodities in the international market would stimulate the indigenous industrial activity in the country. This in turn brings many distinct benefits viz, greater utilization of resources, large employment opportunities, more foreign exchangeetc. Scholars states that trade would make the country as a whole better off(4). Foreign trade would make an impressive contribution to a country’s development. It is considered to be not simply a device for achieving production efficiency but it is also an engine of growth(5). When trade is introduced into a primitive economy, it acts as a dynamic force widening the extent of the market and the scope of “division of labor”(6). Foreign trade also facilitate the dissemination of technical knowledge, transmission of idea, import of know-how, managerial talents, and entrepreneurship. In addition foreign trade encourage movement of foreign capital.
In totality, foreign trade can have a profound impact on the growth of an economy in terms of production, employment technology, resources utilization and so on.
Key words -
1. FTP:- Foreign Trade Policy
2. EDI:- Electronic Data Interchange
3. Tariff:-A Tax or Duty to be paid on a particular class of imports and exports
4. Growth Rate:-THE rate at which something, in particular an economy or business grows.
5. Import:-Bring (goods or services) into a country from abroad for sale.
6. Export:-send (goods or services) to another country for sale.
7. Liberalization:- Removing unnecessary trade restriction and making the economy more competitive.
8. Globalization:- Free interaction among economies of the world in the field of trade, finance, production, technology and investment.
9. Balance of trade:-The difference in the value between a country’s Export and Imports
10. LPG:-Liberalization, Privatization, Globalization.
11. Import substitution:-Replacing foreign imports with domestic production
12. Export Promotion:-Expansion of domestic Export to more countries.