Indian Trade Policy Importance and its Implementation

Foreign trade policy of India is very important from the viewpoint of developing economies. For example, in India, we have a strong Iron and Coal reserve, these are established industry opportunities, However, for the growth of this industry, we need to import the technical know-how from other countries who pioneer in it. Assuming that we as a country, did not have a foreign trade policy, then it would become both, a daunting task and an expensive effort.

Another area which would bring our country to a standstill is the inability to fulfil the demands of the petroleum products. An absence of a foreign trade policy would massively hinder the economic development of our country.

Appropriate Distribution of labor: Through the Foreign trade policy, a country can create a division of expertise and specialization over a global platform. It assists in producing commodities at a lesser cost, so assume a country has huge natural resources, it can outsource the labor, which means export raw material and import finished goods to countries which have skilled labor. Thus they reduce the cost of production.

Stable Pricing: With the help of Foreign trade policy a country can lead to equality of pricing, to ensure a stable demand and supply situation. A foreign trade policy also enables us to import certain products at the time of a natural calamity when demand is high, this ensures the scarcity is managed without taxing the end consumer.

Consumer Advantage: By proving better quality and quantity of goods. It also assists in raising the standard of living especially for underdeveloped countries.

• It makes full use of natural resources. If some resourcesare in surplus in a country then by foreign trade it can be sold in those countries from where it gets its highest price.
• As a foreign trade we can get cheap and quality goods from other countries.
• It promotes cultural cooperation and mutual confidence among the people of different countries.
• This is the most important source of foreign exchange.
• By imposing the import and export duties government earns revenue.

There are many factors contributing to this, the present trade policies, economic reforms, also India’s intrinsic strengths are most sought after in the global space. The country is also promoting infrastructure and technological developments, which are promising for the economic sector in the years to come. With the forthcoming foreign trade policy, our exports are expected to reach US$ 1000 billion by the year 2022-2023.