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Foreign Trade Policy In India

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19.1 INTRODUCTION:

Foreign Trade is a vital sector of a country's national economy, and contributes substantially to the economic welfare of the people and the development of resources. Economies of scale and international specialisation as also the fruits of scientific and technological progress in the world become more easily accessible through the foreign trade1. In the context of planned economic development of developing nations, an appropriate trade policy has become necessary and significant. Today no country in the world is self-sufficient in the sense that it does not possess facilities for economical production of all the goods and services that are consumed by its people. Probably no country can produce all the goods that it needs. …show more content…

Though the process of trade liberalisation in India has been underway for over two decades, the trade policy measures initiated since 1991 as a part of the economic reforms process have been more comprehensive.
Exim Policy or Foreign Trade Policy is a set of guidelines and instructions established by the DGFT (Directorate General of Foreign Trade) in matters related to the import and exports of goods in India. The Foreign Trade of India is guided by the Export Import Policy in short EXIM Policy of the Indian Government and is regulated by the Foreign Trade Development and Regulation Act, 1992. DGFT is the main governing body in matters related to EXIM Policy. Foreign Trade has replaced the earlier law known as the Imports and Exports (Control) Act, …show more content…

The main difference is that international trade is typically more costly than domestic trade.
The reason is that a border typically imposes additional costs such as tariffs, time costs due to border delays and costs associated with country differences such as language, the legal system or culture. International trade consists of ‘export trade’ and ‘import trade’. Export involves sale of goods and services to other countries. Import consists of purchases from other countries.
International or Foreign trade is recognized as the most significant determinants of economic development of a country, all over the world. The foreign trade of a country consists of inward (import) and outward (export) movement of goods and services, which results into outflow and inflow of foreign exchange. Thus it is also called EXIM Trade.
Definition:
According to Wasserman and Haltman, “International trade consists of transaction between residents of different countries”.
According to Anatol Marad, “International trade is a trade between nations”.
According to Eugeworth, “International trade means trade between nations”.

Types:
There are three types of Foreign Trade which are as

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