UGM June 2019 Q19
- Option : D
- Explanation : The foreign trade policy of India, like that of any developing country, was inward-looking till 1991. Through a series of restrictions and substitution approaches, imports into India were highly restricted. With regard to exports, the policy of the government was not harsh. Exports were sought to be allowed and encouraged to earn precious foreign exchange. But a country cannot think of only exporting without importing. The arguments for adopting protectionist policy towards foreign trade were more or less the same as explained earlier.
The period after 1991 has been marked by substantial liberalization of the trade policy. While some liberalization measures were initiated by the self-realization of the government about the need for making exports competitive in the overseas markets, the majority of the initiatives were introduced as a part of structural adjustment programs forced on India by IMF and World Bank. In addition, India became one of the founding members of WTO in 1995, forcing it to remove its own trade barriers imposed earlier on foreign markets.
India’s foreign trade policy is formulated and implemented by the Ministry of Commerce and Industry. Other concerned ministries also pitch in for the formulation and implementation of the policy. The majority of the ministries involved are (in addition to the Ministry of Commerce and Industry): Finance, Agriculture, and Textiles. Reserve Bank of India is also involved in the process. The Director-General of Foreign Trade (DGFT) is responsible for the execution of the foreign trade policy.
Advisory Bodies: Advisory bodies have been set up to advise the government in formulating foreign trade policy and matters relating thereto. The main advisory bodies are as under:
1. Board of Trade: This is a consultative and deliberative body set up to provide recommendations on:
(a) policy measures for increasing exports;
(b) industry-specific measures to improve exports;
(c) streamlining the institutional frame-work for imports and exports;
(d) rationalization of policy measures and procedures for imports and exports; and
(e) improving the international competitiveness of Indian goods and services.
2. Export Promotion Board: This board was set up in the Ministry of Commerce. Its main function is to coordinate the activities of different authorities for the effective execution of export-related matters.
3. Director-General of Anti-Dumping and Allied Duties (DGAD): This Directorate was constituted in April 1988 for carrying out investigations and to recommend the amount of anti-dumping duty/countervailing duty on the identified articles which would be adequate to check injury to the domestic industry.
4. Director-General of Foreign Trade (DGFT): The DGFT is responsible for the execution of the export-import policy of the Government.
5. Central Advisory Council on Trade: This council advises the Government on matters relating to:
(a) export and import policies.
(b) operation of import and export controls
(c) organization and development of commercial services
