Bi number of Asian countries such as China and

Bi lateral Co-operations for Foreign Trade

To
promote and grow international trade, India adopted a policy of forming
Regional Trade Agreements. They were viewed 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 numerous 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. Other
than looking East, India has also 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):

ISFTA came into force on 1st March 2000,
provides duty free concessions to a wide range of products traded between the
two countries. India has now emerged as the largest and the most balanced
trading partner of Sri Lanka. In 2012, imports from India stood at 19% of the
overall imports of Sri Lanka, which was the largest source of imports to Sri
Lanka. While Sri Lanka’s exports to India stood at 5.8% of overall exports of
Sri Lanka ,3rd largest destination, with total trade between the two countries
amounting to US$ 4.2 billion. The ISFTA has made a substantial contribution in
bringing this situation 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 when Sri Lanka’s traditional markets in the West are showing
slow recovery from the global economic crisis, the growing markets in Asia like
that of India provide 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, Myanmar, Sri Lanka, 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. The EHS has been used as a mechanism 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 ending 2007 and to zero by 2012.Other
nations Nepal, Bhutan, Bangladesh, Afghanistan and Maldives have an additional
three years to reduce tariffs to zero.

 

Government
Schemes to Boost Export/Foreign Trade:

Exports are an important driver of economic growth and
help create 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 has 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 export intensity and
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.