“I am sure that the industry and the Government, working in tandem, will be able to ensure that the Indian exports become globally competitive and that we are able to achieve the target, which we have set for ourselves”.
Minister of Commerce & Industry
Government of India
The origin of trade in India was around 100CE(Common ERA). At the time India exported cotton, ivory, mallow cloth, muslin, precious and semi precious gems, silk, spices and vulneraries like black pepper, nard, spikenard, long pepper and malabathrum. At the same time India was an importer of wine from Italy and Arabia. They also imported copper, tin, lead, coral, topaz, flint, glass, sweet clover, storax, realgar, antimony, gold and silver coins. As we all know in 1498, Vasco da Gama landed in Calicut (now it is popularly known as Kozhikode).He made a huge profit during his trip. This made the Portuguese eager to trade with India more and also attracted European steersman and tradesmen.
In 1500 another Portuguese tradesman landed in India. He was called Pedro Álvares Cabral. He established Portuguese trading posts at Calicut and Cochin(now it has been changed to Kochi). He returned to Portugal in 1501. His hand was full of pepper, ginger, cinnamon, cardamom, nutmeg, mace, and cloves which resulted in tremendous profit.
According to the 1991 trade liberalization , due to the average tariffs exceeding 200 percent and the extensive quantitative restrictions on imports India was a closed economy (autarky).Initially to allow Indian ownership of business, foreign investment was strictly restricted in India. For the betterment of India’s economy, the country cautiously began to revolutionizein the 1990’s. This opened up a gate for increased foreign trade in India which produced outstanding results. Since that time India started to taste the fruit of economic reforms.
During 1990-2005 GDP growth has increased from 15 percent to 35 percent. The fruits of liberalization reached their peak in 2007. With this, India became the second fastest growing major economy in the world, next only to China. India however holds its right to protect when need arises. The government’s stand on trade and investment policy has displayed a marked shift from protecting ‘producers’ to benefiting ‘consumers’. This is reflected in its Foreign Trade Policy(FTP) for the year 2004 to2009.It was announced on 31st August, 2004 and its annual supplement was released for the year 2007-08 on 19th April, 2007.
As expected stability of policy administration has yielded positive results and in last 3 years India’s exports quantity have almost doubled. Another objective of this policy is to make exports an effective tool of economic growth. In arise of the global economic slowdown, our Indian exporters suffered a significant inimical impact. Due to the depreciation of the demand worldwide and especially the shrinkage in demand in the traditional market of our exports, exports which had grown by 48.1% during April to September, 2008, endured economic downturn during the next 12 months from October, 2008 to September, 2009.
To examine the performance of the export sectors and to evaluate the need based support measures within the financial restrictions, performance surveys were conducted at regular intervals. As a result of this reviews additional measures were announced in March 2010 and in the Annual Supplement to FTP, released on 23rd August, 2010. Foreign Trade policy for the year 2009-2014 is mainly focused on lessening the adverse impact of the global recession on the Indian economy and on investigating inflation.