Foreign Trade Policy in India 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 in India. This was established by the DGFT. Every 5 years the Government of India announces the Export Import (EXIM) policy in India which is renewed annually. The Export-Import (EXIM) policy in India is revised every year on 31st March and the modifications are effective from 1st April every year. The main vision of Foreign Trade Policy in India is to make a significant participant in world trade and enable the country to adopt the position of leadership in international trade. This article is about the Export Import (EXIM) policy in India, its objectives, advantages, disadvantages, and its impact on Export Import (EXIM) Policy in the Indian economy.

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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 in india 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.

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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.

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Advantages of Export Import (EXIM) Policy

This section will discuss some of the advantages of Export Import (EXIM) policy in India.

• 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.

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Disadvantages of EXIM Policy

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

• 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.

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Impact of EXIM Policy on the Indian Economy

Foreign Trade constitutes more than 45 percent of India's economy. So the export-import policy in India 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 in India 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.

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FAQs

Here we have provided the most frequently asked questions about the Foreign Trade Policy / EXIM Policy in India.

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. EXIM policy in india is also called Foreign Trade Policy in India.

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

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