Export Import (EXIM) Policy or Foreign Trade Policy In India - Check Definition, Objectives, Advantages, & More...

Export Import (EXIM) Policy or Foreign Trade Policy In India: Aspirants who are preparing for various Government exams must learn about the Foreign Trade Policy in India, which is also known as the Export Import (EXIM) Policy. Foreign Trade policy is one of the important topics in the RBI Grade B exam and is included in the Economic and Social Issues (ESI) section. Candidates will get the complete information about the Foreign Trade Policy in this article. EXIM policy is also known as the Foreign Trade Policy. Foreign Trade policy is a set of guidelines and instructions set by the Directorate General of Foreign Trade (DGFT) which is the agency of the Ministry of Commerce and Industry under the Government of India. EXIM policy helps in the promotion of international trade and boosts the economic growth of the country. This helps to maintain the environment of the economy which helps in aiding the citizens. Foreign Trade Policy improves exports by reducing imports and promotes sustainable development. In India, Export Import policy plays a major role in the manufacturing and service sectors.

Click on the link provided below to download the Export Import Policy PDF or Foreign Trade Policy PDF.

Download Export Import Policy PDF | Foreign Trade Policy PDF

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What is Foreign Trade Policy?

Foreign Trade Policy Meaning: Foreign Trade Policy is a set of guidelines and instructions related to the import and export of goods in India and a set of incentives to increase exports. So, it's also called an Export Import (EXIM) policy. This was established by the DGFT. Every 5 years the Government of India announces the Export Import policy which is renewed annually. The Export Import policy is revised every year on 31st March and the modifications are effective from 1st April every year. 

The main vision of Foreign Trade Policy is to make India a significant participant in world trade and enable the country to adopt the position of leadership in international trade.

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Objectives of EXIM Policy

A set of policies and plans to regulate the imports and exports of a country is termed an EXIM policy. This policy will be formulated by the Government of the country. Export Import policy includes various objectives like promoting the growth of the country's economy, improving foreign exchange returns, and enhancing international trade.  Foreign Trade policy describes the market and product strategy and various other measures required for export promotion and enhancement of the entire trade ecosystem.

Let us discuss the complete details of the objectives of the EXIM policy.

  • Promotes Exports by providing incentives and facilities to the exporters.

  • Reduces Imports by setting restrictions on the import of specific goods that can be made domestically.

  • Boosts employment opportunities in the country by improving exports in the manufacturing and service sectors. 

  • Improves economic growth by promoting exports and reducing imports to increase the balance of trade and foreign exchange reserves for creating a stable economic environment.

  • Develops New Markets for the development of the country's exports.

  • Improves the quality of exports by providing various upgrades in the technology to produce high quality products to acquire international standards.

  • Fosters sustainable development by exporting eco friendly products and restricting the import of harmful products.

Government Banks in India

Advantages of EXIM Policy

This section will discuss some of the advantages of Export Import policy.

  • EXIM policy promotes international trade by enabling the movement of goods and services between countries.

  • Boosts Exports by providing various incentives to exporters like subsidies, tax benefits, and so on.

  • Restrains imports by imposing tariffs and restrictions on imported products to prevent importing of less quality goods.

  • Helps in creating employment opportunities in the export sector.

  • Promotes economic growth by increasing the volume of exports and imports.

  • Enables to gain new technologies from neighboring countries.

  • EXIM policy helps in improving the competition among businesses across global markets.

 

Disadvantages of EXIM Policy

Although EXIM policy has numerous advantages, it also includes disadvantages. This section will discuss some of the disadvantages of Export Import policy.

  • Trade imbalance occurs between countries when the import of the country is more than the export of the country which will cause in lack of foreign exchange reserves.

  • This also leads to depending on imports which will decline the domestic manufacturing, leading to unemployment.

  • Import of agricultural products will affect domestic farmers and local industries.

  • Currency fluctuations also affect the EXIM policy.

  • EXIM policy also affects the environment with higher carbon emissions due to transportation.

  • Foreign brands with higher technology act as competition to the domestic brands.

Impact of EXIM Policy on Indian Economy

Foreign Trade constitutes more than 45 percent of India's economy. So the export import policy earns a special focus and dedicated attention as the major constituent of India's economic policies. In recent times the Department of Commerce under the Ministry of Commerce and Industry has systematically mainstreamed the State and Union Territory Governments and various Departments and Ministries of Government of India in the promotion of India's trade globally which helps in significant outcomes.  

Foreign Trade policy provides a stable and sustainable policy environment for foreign trade in services to link incentives for exports and imports with various other initiatives such as Make in India, Digital India, Skill India, Startup India, Smart City, Swachh Bharat, Goods and Services Tax, and so on. Global trade engagement will increase the demand for India's products and strengthen the Make in India scheme. This will also reduce unwanted imports and reduce the trade imbalance.

 

Foreign Trade Policy in India: FAQs

Here we have provided the most frequently asked questions about Foreign Trade Policy / Export Import Policy.

Q. Which ministry announces Foreign Trade Policy?

A. The Ministry of Commerce and Industry announces the Foreign Trade policy.

Q. EXIM policy is also called as?

A. Export Import (EXIM) policy is also called Foreign Trade Policy.

Q. How many years once the Foreign Trade Policy is announced?

A. Foreign Trade policy or EXIM policy is announced every 5 years.

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