Bi being India’s fourth largest trading partner. India’s export

Bi lateral Co-operations for Foreign Trade

To
promote and grow international trade, India adopted a policy of forming
Regional Trade Agreements. They were assumed as ‘building blocks’ towards
liberalization of trade.  The various
levels of agreements are FTA – Free Trade Agreement, PTA- Preferential Trade
Agreements, and CECA – Comprehensive Economic Cooperation Agreements etc. The
first bilateral FTA was with Sri Lanka – the India-Sri Lanka Free Trade
Agreement (ISLFTA) on March 2000. Along with many trade agreements with South
East Asian countries, India is examining the potential for cooperation in trade
in goods and services, investments and other areas of economic cooperation with
a number of Asian countries such as China and Indonesia. Along with ‘Looking
East’ policy, India has seriously begun efforts to develop preferential trade
linkages with developing countries in Latin America (MERCOSUR, Chile), West
Asia (Gulf Cooperation Council (GCC), Israel) and Africa (South African Customs
Union (SACU), Mauritius).

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Below are some major bilateral
co-operations India has entered into;

1.     
ASEAN
– India Free Trade Area (AIFTA):

The
relationship with ASEAN is a key pillar of our foreign policy. AIFTA is a free
trade area with 10 members of ASEAN and India which came into effect on 1st Jan
2010.This has been growing steadily with ASEAN being India’s fourth largest
trading partner. India’s export to ASEAN has increased to US$ 31.07 billion in
2016-17 and India’s import to ASEAN increased by 1.8% in 2016-17 stood at US$
40.63 billion.

 

2.     
With
Sri Lanka – India-Sri Lanka Free Trade Agreement (ISFTA):

·        
Formed on 1st March
2000

·        
Provides duty free concessions
on a lot of products

·        
India is now the largest
trading partner of Sri Lanka, with over 70% of Sri Lankan exports to India
moving under the FTA and below 30% of the Indian exports to Sri Lanka moving
under the FTA

·        
At a time of economic
crisis, India provided a great opportunity for Sri Lankan exports via the ISFTA

 

3.     
BIMSTEC
– Bay of Bengal Initiative for Multi-Sectoral Technical and Economic
Cooperation:

International Organizations of Bangladesh,
India, Sri Lanka, Myanmar, Thailand, Bhutan and Nepal. Agreements are under negotiations.

 

4.     
Thailand (separate
from FTA agreement with ASEAN):

EHS (Early Harvest Scheme) is between India and
Thailand signed in October 2003, wherein 83 products were identified to be
reduced to zero in a phased manner. EHS is used as way to build greater
confidence amongst trading partners to prepare them for bigger economic
engagement.

 

5.     
SAFTA
– South Asia Free Trade Agreement:

A
Free Trade Agreement among India, Pakistan, Nepal, Sri Lanka, Bangladesh,
Bhutan and the Maldives searched on 6 January 2004 at the 12th SAARC summit in
Islamabad, Pakistan. The member countries India, Pakistan and Sri Lanka shall
bring down duties to 20% in first phase ended on 2007 and to zero by 2012.Other
nations Nepal, Bhutan, Bangladesh, Afghanistan and Maldives have an additional
3 years to reduce tariffs to zero.

 

Government
Schemes to Boost Export/Foreign Trade:

Exports is a major driver of economic growth and help generate
much needed jobs along with improving balance of trade in our favor. India need
to work on logistics, labor laws, trade policies etc. to increase
competitiveness in International trade. To mitigate the adverse impact of
global recession and boost exports in general, the government always adopted
positive policy measures, a few of them listed below:

Pre Export Schemes:

1.      Advance
Authorization Scheme – Allows duty free imports of Inputs along with fuel, oil,
catalyst etc required for manufacturing export product. Available for physical
exports and deemed exports including intermediate supplies.

2.      Duty
Free Import Authorization (DFIA) – Active from May, 2006. To facilitate
transfer of the authorization or the inputs. Minimum VA of 20% is required
under this scheme.

3.      Schemes
for Gems & Jewellery Sector – An employment oriented sector. Duty free
import/procurement from nominated agencies allowed in advance.

Post
Export Schemes:

1.      Duty
Entitlement Pass Book (DEPB) Scheme – Neutralizes custom duty on all inputs for
a product.

2.     
Duty Drawback Scheme –
Refund of customs duty and excise duty on the inputs used in the manufacture of
goods to be exported. Under GST, the duty drawback would only be available for
the customs duty paid on imported inputs or central excise paid on certain
petroleum or tobacco products used as inputs or fuel for captive power
generation.

 

 

 

 

VISHESH
KRISHI AND GRAM UDYOG YOJANA:

For employment generation
in rural and semi urban areas, the Yojana has been expanded to include
agriculture produce and their value added products. Duty credit scrip benefits
are guaranteed.

 

FOCUS
MARKET SCHEME (FMS):

Exporters of all products
to notified countries shall be entitled for Duty Credit Scrip equivalent to 3%
of FOB value of exports. The scheme covers a total of 110 markets.

 

FOCUS PRODUCT SCHEME (FPS):

Export of notified products to shall be
entitled for Duty Credit Scrip equivalent to 2% of FOB value of exports. This
is to incentivize export of products which have high employment potential.

 

Diversification
of Products Post 1991:

Composition
of India’s Merchandise Exports:

Commodity/Year

1987-88

1990-91

1995-96

2000-01

2005-06

2010-11

2013-14

Petroleum Products

4.14

2.88

1.43

4.2

11.29

16.52

20.05

Gems and Jewellery

16.67

16.11

16.59

16.57

15.06

16.12

13.14

Cosmetics

4.38

6.81

6.82

8.22

8.85

7.69

8.81

Transport Equipnment

1.61

2.21

2.91

2.23

4.19

6.39

6.86

Machinery and Instrument

3.28

3.84

2.61

3.55

4.93

4.71

5.19

Readymade Garments

11.61

12.32

11.56

12.5

8.36

4.62

4.78

Manufacture of Metals

1.84

2.51

2.6

3.54

4.11

3.37

3.1

Cotton, Yarn etc

7.3

6.45

8.1

7.77

3.83

2.3

2.85

Rice

2.16

1.42

4.3

1.44

1.36

1.01

2.47

Electronic Goods

1.27

1.28

2.11

2.36

2.11

3.27

2.44

Iron & Steel

0.18

0.89

2.19

2.31

3.44

2.04

2.4

Other Engineering Goods

1.34

1.67

1.39

1.32

2.29

3.38

2.24

Plastic and Linoleum Products

0.42

0.61

1.84

2.05

2.73

1.86

2.16

Other Agriculture products

0.25

0.74

1.67

1.8

1.58

1.59

2.16

Leather and Manufactures

7.98

7.98

5.51

4.36

2.62

1.56

1.82

Rubber Products

1.44

1.71

2.05

2.1

2.04

1.43

1.73

Manmade yarn

0.73

1.25

2.36

2.38

1.9

1.7

1.64

Marine Products

3.4

2.95

3.18

3.13

1.54

1.04

1.62

Other Ores and Minerals

1.27

2.01

2.05

1.76

2.27

1.55

1.27

Oil Meals

1.36

1.87

2.21

1

1.07

0.97

0.9

Iron Ore

3.54

3.22

1.62

0.8

3.69

1.87

0.51

Carpets

2.63

2.06

1.77

1.31

0.83

0.41

0.33

Tea

3.83

3.29

1.1

0.88

0.38

0.29

0.26

 

100

100

100

100

100

100

100

 

 

Due to relatively small
industrial base in the 1960’s and early 1970’s India mainly exported agro-based
manufactures. But with the development of the indigenous industries consequent
upon the program of industrialization, the non-traditional items gained
importance in the export basket.