Points to Remember:
- Key features of the 2015-20 Foreign Trade Policy (FTP).
- Impact on Indian exports and imports.
- Strengths and weaknesses of the policy.
- Suggestions for future trade policies.
Introduction:
India’s Foreign Trade Policy (FTP) is a five-year plan that outlines the government’s strategy for promoting international trade. The 2015-20 FTP, officially titled “Foreign Trade Policy 2015-20,” aimed to boost India’s exports and integrate the country more deeply into the global economy. It followed a period of relatively slower export growth and sought to address challenges such as declining global demand and increased competition. The policy emphasized simplification of procedures, promotion of specific sectors, and leveraging technology for better trade facilitation.
Body:
1. Key Features of the 2015-20 FTP:
The 2015-20 FTP introduced several key features:
- Focus on Services Exports: Recognizing the growing importance of services, the policy aimed to promote exports in sectors like IT, tourism, and education.
- Simplified Procedures: The policy streamlined export-import procedures, reducing paperwork and making it easier for businesses to engage in international trade. This included the introduction of online platforms for various trade-related processes.
- Incentive Schemes: Various incentive schemes were introduced to support specific export sectors, including Merchandise Exports from India Scheme (MEIS), Service Exports from India Scheme (SEIS), and other sector-specific schemes. These schemes provided duty drawbacks and other financial benefits.
- Emphasis on Technology: The policy promoted the use of technology to improve efficiency and transparency in trade procedures. This included the use of digital signatures and online tracking systems.
- Focus on Small and Medium Enterprises (SMEs): Recognizing the significant contribution of SMEs to exports, the policy provided specific support measures for these businesses.
2. Impact on Indian Exports and Imports:
The impact of the 2015-20 FTP was mixed. While some sectors experienced significant growth in exports, others faced challenges. The policy’s success was also influenced by external factors like global economic conditions and fluctuations in commodity prices. Data on export growth during this period needs to be analyzed sector-wise to assess the policy’s true impact. A comprehensive evaluation would require comparing export growth rates during this period with previous periods and considering global economic trends.
3. Strengths and Weaknesses:
Strengths:
- Streamlined procedures made trade easier for businesses.
- Incentive schemes provided crucial support to exporters.
- Focus on services exports recognized a growing sector.
Weaknesses:
- Implementation challenges hampered the effectiveness of some schemes.
- Dependence on incentive schemes might have created distortions in the market.
- The impact on overall export growth was not as substantial as initially hoped.
4. Comparison with Previous Policies: A comparative analysis with previous FTPs would highlight the evolution of India’s trade policy approach, showing shifts in focus and priorities over time. This would provide a more nuanced understanding of the 2015-20 policy’s place within the broader context of India’s trade liberalization journey.
Conclusion:
The 2015-20 FTP represented a significant attempt to modernize and streamline India’s foreign trade regime. While it achieved some success in simplifying procedures and promoting certain sectors, its overall impact on export growth was mixed. Future trade policies should focus on:
- Improving the efficiency and transparency of implementation mechanisms.
- Reducing reliance on export subsidies and promoting competitiveness through other means.
- Strengthening trade agreements and diversifying export markets.
- Investing in infrastructure and skills development to enhance export capacity.
By addressing these issues, India can create a more robust and sustainable export-oriented economy, contributing to inclusive and holistic development while upholding constitutional values of economic justice and equality. A continuous evaluation and adaptation of trade policies based on data-driven insights are crucial for achieving long-term success in the global marketplace.