Learn about export import policies and impact on Indian economy

The Covid-19 pandemic has incurred significant and escalating human costs throughout the world, and the necessary protective measures have had a significant impact on economic activities. The International Monetary Fund’s (IMF) World Economic Outlook (WEO) for October 2020 forecasts a worldwide growth rate of (-) 4.4 per cent, an upward adjustment of 0.8 per cent from their June expectations. The revision points to better-than-expected GDP growth in the second quarter and a stronger third-quarter rebound. In 2021, the global growth was expected to be 5.2 per cent, which is 0.2 percent lower than the June 2020 WEO Update and reflects the assumption of further social separation.

According to the IMF’s most recent prediction, advanced countries would expand at (-) 5.8% in 2020 before rebounding to 3.9 per cent in 2021. The growth rate for emerging markets and developing nations were downgraded to (-) 3.3 per cent in 2020, with a rebound to 6.0 per cent in 2021. As a result, emerging markets and developing countries are expected to increase faster than established economies in per capita income during the next two years.

Global Trade

The Covid-19 epidemic has wreaked havoc on the global economy and trade since output and consumption have been curtailed worldwide. According to WTO forecasts from October 2020, global merchandise trade would fall by 9.2 per cent in 2020, followed by a 7.2 per cent increase in 2021. In 2020, Asia’s trade drop will be less than in other areas, at (-) 4.5 per cent for exports and (-) 4.4 per cent for imports. World commerce appears to be recovering from profound Covid-19-induced depression, but the pandemic’s persistent consequences might hamper any rebound. The nature of the pandemic and the methods utilised to combat it have a lot to do with how well trade performed during the Covid-19 epidemic. National economies have been severely hampered by lockdowns and travel restrictions, which have resulted in major reductions in output and employment in many industries.

Simultaneously, strong monetary and fiscal policies have bolstered earnings, allowing consumption and imports to rise once the restrictions were lifted.

What is the purpose of imports?

Because of the fierce rivalry, you can only sell if your product is of higher quality than your rivals’, has the best pricing, and is delivered on time to the purchasers. To do this, one must have access to commodities and capital products of worldwide standard grade. We also need improved technologies at our disposal because the markets are changing dramatically worldwide.

We’ve progressed from letters to e-mails, faxes to video conferencing, and manually operated phones to satellite-based cellular phones. Without a superior technology product, it is impossible to compete in today’s world. If we are out-of-date – and hence out of the market – we will not be able to match the quality and services that others provide.

The Export and Import Policy

The Export and Import Policy (Exim Policy), which ran from 1992 to 1997, was a watershed moment in India’s economic history. For the first time, a concerted attempt was made to deconstruct different protectionist and regulatory measures to speed up the country’s transition to a global economy. This policy was implemented in conjunction with the 8th Five-Year Plan, resulting in significant increases in exports.

India’s overall exports climbed from US$ 17.86 billion in 1991-92 to US$ 155 billion in 2007-08, about 212 times more than the previous year.

India’s part in global commerce has expanded, and its export share as a proportion of GDP has also increased significantly. With these considerations in mind, the subsequent Exim Policies are aimed to build on the advantages of the prior Policy. They want to continue the liberalisation process, which has resulted in our gaining a roughly 1.5 per cent share in global merchandise trade in 2007-08, totalling US$ 525 billion. 

Two primary objectives have been identified in the present Foreign Trade Policy:

1. Within the next five years, quadruple our percentage share of global merchandise trade; and
2.  Operate as an effective vehicle of economic growth by boosting employment.

We have already accomplished the first of the above two objectives and are on pace to fulfil the second, namely, we have generated 136 lakh new employment in the last four years. Many Asian nations have achieved such extraordinary export-led growth in the era of globalisation and the WTO framework that South Korea and Taiwan are likely to be classified as developed countries by the WTO. The World Trading Organisation (WTO) is the world’s biggest commerce organisation, with 153 member nations and 96 per cent of global trade. Export growth is vital for any developing economy since it leads to the creation of employment, the development of infrastructure, economies of scale, and increased foreign exchange profits. Higher exports provide legitimacy to a country’s position in the international market in today’s world. As a result, exports are important to India’s government, which considers them a national priority.

Banking, Financial Services, and Insurance (BFSI)

Due to increased per capita income, introduction of new products, technological innovation, expanding distribution, networking, and growing customer knowledge of financial goods, India’s Banking, Financial Services, and Insurance (BFSI) industry is expected to develop dramatically. In the last 15 years, the BFSI industry has undergone significant changes and will continue to be a priority for India’s economic development based on inclusive growth.

Challenges and Opportunities

Due to India’s economic progress and increased public knowledge of financial goods and services, the BFSI business is expected to grow dramatically in the future years.

New and broader items will provide a plethora of options for specialised development.

RSM is ideally positioned to deliver numerous services on such IT platforms because the industry has accepted IT as a fundamental aspect of company strategy.

High regulatory oversight would necessitate ongoing monitoring and the adoption of risk mitigation measures based on a variety of control mechanisms, including ‘Risk-Based Audits’ (RBA) as given by:

• In its RBA instructions to banks, the Reserve Bank of India
• To the insurance business, the Insurance Regulatory Authority of India (IRDA)
• The Securities Exchange Board of India (SEBI) is in charge of the mutual fund industry.

Conclusion

International commerce, according to economic theory, enhances the level of life. The benefits of trade in practice are enormous, as seen by comparing the performance of open and closed economies. We anticipate India’s economy to continue to outpace the rest of the world in terms of economic growth in 2019 and have forecasted 7.2 per cent for the year. Favourable fiscal and monetary policies will help boost growth.