EXIM Policy 2002-07 Implementation is the key

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Article Details

Pub. Date	:	June, 2002
Product Name	:	The Analyst
Product Type	:	Business Environment
Product Code	:	ANBE10206
Author Name	:	N Janardhan Rao, Team Analyst
Availability	:	YES
Subject/Domain	:	Finance
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Description

While the policy is designed to tap India's export potential, a lot depends on how the policy is going to be implemented.

With the dismantling of 50-year-old import restrictions, India joined the bandwagon of free world trade. It opened up a market worth $25 bn under an Export-Import (EXIM) policy. A full-fledged effort seems to be under way to make exports an effective engine for growth for the Indian economy. The Government has decided to lift all Quantitative Restrictions (QRs) on exports, improve incentives for Special Economic Zones (SEZs) and schemes like Duty Entitlement Passbook (DEPB), advance license, and Export Promotion Capital Goods (EPCG) in the new five-year EXIM Policy 2002-07. (For more information on QRs, refer our earlier articles of QR PhaseoutNew Vistas and Competition vs. Protection in Analyst May 2001).

Basically, the removal of export QRs, giving extra facilities to SEZs and boosting agricultural exports have been the mainstay of the policy. With the lifting of QRs, the policy has made a paradigm shift on its focus from import liberalization to export orientation. The apex business chambers have welcomed the EXIM policy and they say that the creation of SEZs would increase the flow of foreign investment.

The most encouraging aspect of the EXIM policy is its focus in raising India's export competitiveness. Given the increasing global competition and the recognition that international trade is an effective instrument of economic growth, employment generation and, therefore, poverty alleviation, India has to build upon its existing strengths, create conditions for removing weaknesses, find ways and means to compete in the wake of the changing rules of the game and offer conditions conducive to meet the challenges. The new EXIM policy has aimed to address all these issues in a structured and comprehensive manner. The Union Minister of Commerce, Murasoli Maran, claims that the EXIM Policy is "comprehensive in scope and multi-sectoral. It takes care of more than 80 percent of the population living in rural areas by focusing on the agricultural sector, cottage and handicrafts and small-scale sectors."

Keywords

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