Analyze the trade policy reforms implemented by India in the 90s. What are its implications?
EXIM Policy 1990:
- A scheme of automatic licensing was introduced under which upto 10 percent of the value of previous year’s license could be imported.
- The Export Pass Book Scheme introduced in 1986 is withdrawn.
- The OGL list was expanded to facilitate easy access to import of items not available within the country.
- Under the Duty Exemption Scheme, Blanket Advance Licensing base been introduced for manufacturers exporters having a minimum foreign exchange earnings of Rs. 10 crore in the previous three years.
- A scheme of Star Trading House was introduced for exporters with an average annual net foreign exchange earnings of Rs. 75 crore in the preceding three licensing years of the base period.
EXIM Policy (1992-97): This policy gave a further push to liberalization by freely allowing imports of all items except a negative list. EXIM Policy contains:
- Import of all items including capital goods are freely allowed.
- The Export Promotion Capital Goods (EPCG) scheme liberalized further.
- A significant aspect of the new policy is that amendments will be made once a quarter.
- The Registration-Cum-Membership Certificates (RCMC) will continue to be an essential requirement for any importer or exporter to avail the benefits.
- Exports of all items are free except a negative list.
- Import of number of items like newsprint, non-ferrous metals, natural rubber etc. decanalized. Petroleum products, edible oils and cereals continue to be on canalized list.
- The scope of duty exemption scheme has been enlarged.
- Under the new policy, certain categories of exports and exporters are eligible to receive special import licenses.
- Export houses, trading and star trading houses to be eligible for self-certification.