Foreign Trade, Export-Import Policy and Regional Trade Agreements of India

From 1950 to 1990, the foreign trade of India suffered from strict bureaucratic and discretionary controls. Similarly, foreign exchange transactions were tightly controlled by the government and the Reserve Bank of India. With some exceptions, India always faced a deficit in its balance of payments, i.e. the value of imports always exceeded the value of exports. Exports remained relatively sluggish, owing to a lack of exportable surplus, competition in the international market, inflation at home, and the increasing protectionist policies of the developed countries. In 1991, the government introduced a series of reforms to liberalize and globalize the Indian economy. India's approach to openness has been cautious, contingent on achieving certain preconditions to ensure an orderly process of liberalization and ensuring macroeconomic stability. The major trade policy changes in the post-1991 period have included: a simplification of procedures * the removal of quantitative restrictions * a substantial reduction in the tariff rates * a move towards current account convertibility * liberal inflows of private capital * a shift towards market-determined exchange rate * a gradual liberalization of restrictions on outflows * a focus on export growth * attracting non-debt-creating capital flows. In recognition of the growing importance of foreign trade in the Indian economy, this book provides a comprehensive description and analysis of the developments in India's foreign trade and allied sectors, with a focus on post-1991 period.