(Session: 2009-2011) ASSIGNMENT ON INDIAN COMMERCIAL POLICY A CRITICAL OVERVIEW
Submitted To: Prof. A.K.SHARAN
Submitted By VARSHA NATHANI PRATEEK THAKUR GAGAN SINGH MOHIT MALVIYA KAMAL SEWANI
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CONTENTS PAGE NO.
PART A – OVERVEIW OF COMMERCIAL POLICY 3-4
PART B – COMMERCIAL POLICY OF INDIA/FOREIGN TRADE POLICY 5-8
PART C – CHALLENGES , ISSUES AND RECOMMENDATION 9-14
REFRENCES 15
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AN OVERVEIW: COMMERCIAL POLICY OF INDIA
India's economic history can be broadly divided into three eras, beginning with the pre-colonial period lasting up to the 17th century. The advent of British colonization started the colonial period in the 18th century, which ended with independence in 1947. The third period stretches from independence in 1947 until now. The economy of India is the twelfth twelfth largest largest economy in the world by nominal value and the fourth largest by purchasing power parity (PPP). In the 1990s, following economic reform from the socialist-inspired economy of postindependence India, the country began to experience rapid economic growth, as markets opened for international competition and investment. In the 21st century, India is an emerging economic power with vast human and natural resources, and a huge knowledge base. Economists predict that by 2020, India will be among the leading economies of the world. Trade is not an end in itself, but a means to economic growth and national development. The primary purpose is not the mere earning of foreign exchange, but the stimulation of greater economic activity. The Forei Foreign gn Trad Tradee Polic Policy y is root rooted ed in this this belie belieff and and built built aroun around d two two majo major r objectives. These are: (i) To double our percentage share of global merchandise trade within the next five years; And (ii) To act as an effective instrument of economic growth by giving a thrust to employment Generation. Commercial policy of India is also known as the foreign trade policy of India. By composition of foreign trade of any country we imply the composition of imports and exports. An examination of the foreign trade of a country enables to analyze the progress of that country and the rate and speed of structural changes operating in it. In the pre-independe pre-independence nce period, the direction of India’s India’s foreign trade was determined not according to the comparative cost advantages of India but by the colonial relations between India and Britain. It was Britain that decided from which countries India could import its requirement and to which country it could export its products. Naturally, Naturally, a major part of India’s India’s exports exports was either directly with Britain Britain or its colonies colonies or allies. This pattern pattern continued continued for some years after Independence as well since India has not till then explored the possibilities of 3
developing trade relations with other countries of the world. For example, the combined share of U.K and U.S.A. in India’s export earning was 42 percent in 1950-51. Their share in India’s import expenditure was as much as 39.1 percent pe rcent in the same year. With other capitalist countries like France, Germany, Italy, Japan etc India either did not have trade relations at all or they were very insignificant. The situation has changed very much since, and now after 58 years of planning, the the trade trade rela relati tions ons have have open opened ed up and and mark mark exhi exhibi bitt mark marked ed chan changes ges.. Th Thee diversification in trade relation has reduced the vulnerability of the economy to the outside political pressures. Commencing July 1991, the Government of India has initiated a number of measures to open up the foreign trade sector and has announced the massive import liberalizations over the last decade. These include devaluation the rupee in July 1991 and subsequently its depreciation against the currencies of leading industrialized countries, introduction of the convertibility of rupe rupeee firs firstt on trad tradee acco account unt then then for for all all the the curr current ent accou account nt tran transa sact ctio ions ns,, libera liberaliz lizati ation on of import import regime regime,, substa substanti ntial al reduct reduction ion in custom customss tarif tarifff rates, rates, decanalising of many items of trade, wide ranging measures to give a thrust to exports, exports, etc. In fact, the trade policy reforms reforms initiated initiated in 1991 have drastically drastically changed the scenario and have resulted in a shift from the inward-oriented policy of the past to an outward-oriented policy. India’s trade has increased significantly in the post reform period. In absolute terms, the trade volume rose from US $ 42.2 billion ($ 18.1 billion exports and $ 24.1 billion imports) in 1990-91 to US $ 398.66 billion ($ 159.01 billion exports and $ 239.65 billion imports) in 2007-08. The Union Commerce Ministry, Government of India announces the integrated Foreign Trade Policy FTP in every five year. This is also called EXIM policy. This policy is updated every year with some modifications and new schemes. New schemes come into effect on the first day of financial year i.e. April 1, every year. The import import policy and the export export policy of the Government Government of India. India. This discussion is best divided into two periods: The pre-reform period (i.e., the period prior to 1991), and The reform period (i.e., the period after after 1991). During the latter period, massive liberalization liberalization measures have been introduced in the industrial sector, the foreign trade, sector and the financial sector. As far as the foreign trade sector is concerned, the year 1991 is a “watershed” as massive trade liberalization measures adopted since this year year mark mark a majo majorr depar departur turee from from the the relat relative ively ly prote protecti ction onist istic ic trade trade policies pursued in earlier years. According to Rajesh Mehta, such a break stems from the change in the perception for the trade policy mind-set in the country. “While the objectives of self-reliance and self sufficiency influenced the trade trade policy policy formulat formulation ion in the 1950s and 196 1960s, 0s, the factor factorss like like export export led growth, improving efficiency and competitiveness of Indian industries prevailed upon the trade policy-making policy-making during the 1970s and the early 1980s. The current trade policy reforms, reforms, on the other hand, seem to have been guided mainly by the 4
concerns over globalization of the Indian economy, improving competitiveness of its industry and adverse balance of payments situation”. As stated earlier, the period after 1991 has been marked by a substantial liberalization of the trade policy. While some liberalization measures were the result of the conviction among government circles that they were necessary to make exports competitive in the intern internati ationa onall market market,, some some were were underta undertaken ken und under er the pressu pressure re of the international agencies, as a part of the stabilization and structural adjustment programmed. Moreover, with India joining the WTO (world trade organization) in 1995 as a founder member, it is under an obligation to strike down all quantitative restrictions on imports and reduce import tariffs so as to ‘open up’ the economy to world trade and the forces of globalization.
FOREIGN TRADE POLICY
The new The new Forei Foreign gn Trad Tradee Poli Policy cy (FTP) (FTP) take takess an inte integr grat ated ed view view of the the overa overall ll development of India's foreign trade and. goes beyond the traditional focus on pure exports. This would be clear from the following statement in the policy document, "Tra "Trade de is not not an end in itse itself lf,, but but a mean meanss to econo economi micc grow growth th and and nati nation onal al development. The primary purpose is not the mere earning of foreign exchange, but the stimulation of greater economic activity." Objectives and Strategy of FTP, 2004-09
In line with the above focus, the FTP lays down two major objectives: I. To double our percentage share of global merchandise trade within the next five years; and II. To act as an effective instrument of economic growth by giving a thrust to employment generation. Strategies proposed to achieve these objectives ob jectives include the following: 1. Unshackling of controls and creating an atmosphere of trust and transparency in dealing with business. 2. Simplifying procedures and bringing down transaction costs. 3. Neutralizing incidence of all levies and duties on imports used in export products. 5
4. Facilitating development of India as a global hub for manufacturing, trading and services. 5. Identifying and nurturing special focus areas which would generate additional employment opportunities, particularly in semi-urban and rural areas. 6. facilitating facilitating technologic technological al and infrastructur infrastructural al up gradation gradation of all the sectors sectors of the Indian economy, especially through import of capital goods and equipment. 7. Avoiding inverted duty structures and ensuring that domestic sectors are not disadvantaged in trade agreements. 8. upgrading the infrastructural network related to the entire Foreign Trade chain, to international strandards. 9. Revitalizing the Board of Trade by redefining its role, and inducting into it experts on trade policy. 10. Activating Indian Embassies abroad as key players in the export strategy. Main Features of FTP, 2004-09
The main features of FTP, 2004-09, are as follows: envisaged a 1. Doubling share of global merchandise trade. FTP (2004-09) envisaged doubling of India's share in world exports from 0.75 per cent to 1.5 per cent by 2009. 2. Five thrust sectors. Sectors with significant export prospects coupled with poten potenti tial al for employ employmen mentt genera generati tion on in semi-u semi-urba rban n and rural rural areas areas were were identified as thrust sectors. FTP announced specific strategies (termed 'Special Focus Initiatives') for five such sectors: Agriculture, Handicrafts, Handlooms, Gems and Jewellery, and Leather and Footwear sector.
Main strategies announced for the five sectors outlined in the FTP are as follows: (i) (i) In agric agricul ultu ture re,, a new sche scheme me call called ed Vishesh Vishesh Krishi Krishi Upaj Upaj Yojana Yojana was introduced to boost exports of fruits, vegetables, flowers, minor forest produce and their value added products. Export of these products would qualify for duty free credit entitlement equivalent to 5 per cent of the value of exports. In addition, the the poli policy cy made made capi capita tall goods goods impor importe ted d for for agri agricu cult ltur uree under under the the Ex Expo port rt Promotion Capital Goods (EPCG) scheme duty free. (ii) The package for gems and jewellery sector includes : (i) duty free import of consumables for metals other than gold and platinum up to 2 per cent of the value of exports; (ii) duty free re-import entitlement for rejected 6
jewe jewell ller ery y upto upto 2 per cent of the the valu valuee of expor exports ts;; (iii (iii)) duty duty free free impo import rt of commercial samples of jewellery increased to Rs. 1 lakh; and (iv) allowing import of gold of 18 carat and above under the replenishment scheme. (iii (iii)) As far far as the the handl handloo ooms ms and and handi handicr craf afts ts sect sector or is conce concern rned ed,, the the FTP FTP announced that a new Handicraft Special Economic Zone would be established. In addition, duty sops for trimmings and embellishments imported by handlooms and handicraft producers were increased to 5 per cent of the value of exports. (iv) (iv) In the leathe leatherr and footwe footwear ar sector sector,, the dutyduty-fre freee entitl entitleme ements nts of import import trimmings, embellishments and footwear components were increased to 3 percent. This is expected to help the leather and footwear sector save upto 5 per cent of its import costs. In addition, duty free import of specified items for leather sector was increased to 5 per cent of the value of exports. 3. 'Served from India' to be built as a brand.
Presently services contribute more than 50 per cent of the country's GDP. To provide a thrust to service exports, FTP advocated a number of steps. These include: (i) Served from India brand will be created to catapult India the world over as a major global services hub. (ii) An exclusive Export Promotion Council for services would be set up in order to map opportunities in key markets, and develop strategic market access programmes. (iii) Individual service providers who earn foreign exchange of at least Rs. 5 lakh, and other service providers who earn foreign exchange of at least Rs. 10 lakh would be eligibl eligiblee for a duty duty credit credit entit entitlem lement ent of 10 per cent of total foreign foreign exchange exchange earned by them. (iv) Stand-alone Stand-alone restaurants restaurants would be entitled entitled to duty credit equivalent equivalent to 20 per cent of the foreign exchange Earned. In the case of hotels, the entitlement would be 5 per cent. (v) Healthcare and educational institutions would be entitled to duty credit of 10 per cent of the foreign exchange earned. 4. New categories of star houses. The FTP announced a new categorization of status holders. Under the new scheme, export houses were divided into five cate categor gorie iess depen dependi ding ng upon upon thei theirr expo export rt perfo perform rman ance ce in thre threee year years. s. Th Thee categories categories were (i) One Star (export of Rs. 15 crore); (ii) Two Star (export of Rs. 100 crore); (iii) Three Star (export of Rs. 500 crore); (iv) Four Star (export of Rs. 1,500 crore); and (v) Five Star (export of Rs. 5,000 caore). A star export 7
hous housee was was enti entitl tled ed to get get lice licenc nce, e, cert certif ific icat ate, e, permi permiss ssio ions ns and cust custom omss cleara clearance ncess for both both import importss and export exportss on self-d self-decl eclara arati tion on basis. basis. The star star export house was also granted the benefit of 100 per cent retention of foreign exchange in Export Earners Foreign Currency (EEFC) account. It was also to be eligible for consideration under the Target Plus Scheme and enjoy a number of other privileges (like exemption from furnishing Bank Guarantee). 5. "Target Plus' Scheme. Exporters who exceed the annual export target were to be rewarded under the Target Plus Scheme. This reward was in terms of entitlement to duty-free credit based on incremental export earnings. With the target for 2004-05 being fixed at 16 per cent, the lower limit for qualifying for these rewards was pegged at 20 per cent. Target plus scheme was abondoned in the second supplement to Foreign Trade Policy announced on April 7, 2006. 6. Setting up of Free Trade and Warehousing Zones (FTWZs). The FTP introd introduce uced d a new scheme scheme to establ establish ish Free Free Trade Trade and Warehou Warehousin sing g Zones Zones (FTWZs) (FTWZs) to create create trade-rela trade-related ted infrastru infrastructure cture to facilitat facilitatee the import import and export of goods and services with freedom to carry out trade transactions in free currency. This is aimed at making India into a global trading hub. Each zone would have minimum outlay of Rs. 100 crore and 5,00,000 square metres built-up area. Foreign direct investment would be permitted up to 100 per per cent cent in the the devel developm opmen entt and esta establ blis ishm hmen entt of the the zone zoness and thei their r infrastructural facilities. 7. Sops for EOUs. The FTP announced a number of benefits for the exportoriented units (EOUs). These include: (i) EOUs to be exempted from servicetax in propor proportio tion n to their their exported exported goods goods and services services;; (ii) (ii) EOUs EOUs to be perm permit itte ted d to reta retain in 100 100 per cent cent of expor exportt earn earnin ings gs in EEFC EEFC acco account unts; s; (iii) Income tax benefits on plant and machinery to be extended to DTA (Domestic Tariff Areas) that converting EOUs; and (iv) Import of capital goods to be on self- certification basis for EOUs. 8 Reduc Reducing ing tran transac sactio tional nal costs costs and simpl simplify ifying ing proce procedur dureses- The FTP announced a number of rationalization measures' to reduce transactional costs and simpli simplify fy procedu procedures res.. These These includ include: e: (i) All export exporters ers with with minimu minimum m turnover of Rs. 5 crore exempted from funishing bank guarantee (this will help small exporters who incur high transactional costs); (ii) Import of second-hand capital goods permitted without any age restrictions; (iii) Minimum depreciated value value for plant and machin machinery ery to be locate located d into into India India reduce reduced d from from Rs. 50 crore to Rs. 25 be filed reduced; reduced; (vii) Time Time bound introductio introduction n of Electronic Electronic Data Interface (EDI) for export transactions, etc 9 Focus on infrastructure development Some special measures announced for infrastructur infrastructuree development development in the FTP are: (i) The threshold threshold limit of 8
designate Towns of Export Excellence' has been reduced from Rs.1000 crores to Rs. 250 crore in the five thrust-secto thrust-sectors rs announced (ii) Funds from ASIDE (Assista (Assistance nce to States. States. for infrastructur infrastructuree Development Development of Exports) Exports) used for develo developmen pmentt of Agri Agri Export Export Zones Zones also, also, (iii) (iii) establ establish ishmen mentt of common common facility facility centre will will be encouraged encouraged for use by house-based house-based service providers; providers; and (,v) (,v) Pragat Pragatii Maidan Maidan at Delhi Delhi will will be transf transform ormed ed into into a world-c world-clas lasss complex. 10. Other measures. Of the various other measure announced in the FTP.the following deserve specific mention (i) Biotechnology Parks to be set up in the country having all the facilities of 100 per cent EOUs.
(ii) The Board of Trade to be revamped and given a clear and dynamic role. (iii) Financial assistance to be provided to export for meeting their costs and legal legal expens expenses es relate related d to trade trade matter matterss like like anti-d anti-dump umping ing action action and countervailing duties in other countries. (iv) Although the DEPB (Duty Entitlement and Pass book Scheme)is as it covers 52 per cent of o f India's exports and is easy to administer.
CHALLENGES AND ISSUES: A CRITICAL OVERVEIW OF FTP
As the discussion above shows, the Foreign Trade Policy, 2004-09 introduced a number of schemes for promoting exports and opening up trade. However, it has been criticized on a number of counts. The main criticisms are as follows: 1.
Burden of export promotion schemes.
The various export promotion schemes have resulted in a substantial loss of revenue to the government. This loss was Rs. 37,590 crore in 2005-06 and is estimated to have touched the figure of Rs. 53,768 crore in 2006-07.2" It is difficult to appreciate the plethora of liberal giveaways to the various categories of exporters like duty free entitlements for status holders, service providers and agri-exporters and easier status recognition norms. While the FTP has announced announced a number number of conces concessio sions ns and exempt exemption ions, s, it says says nothing on business or businessmen who avail of duty exemptions but do not fulfils their obligations. "In practice, the government has given whoever
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masquerades as exporter, complete freedom to evade duties through export promotion licences."" 2.
Danger of circular trading .
At the time FTP, 2004-09, was announced, some critics had expressed the apprehension that the target plus scheme could lead to a sharp rise in 'circular trading' in the guise of increasing exports. This is due to the reason that the scheme had given incentives for achieving higher exports without any any linka linkage ge to the the volu volume me of impor imports ts.. For For inst instanc ance, e, supp suppos osee that that an exporter, with a turnover of Rs. 500 crore in 2003-04, imported inputs worth Rs. 1,000 crore in 2004-05. He could claim credit for 100 per cent export growth by re- exporting the imported goods even with a nominal value addition. Under the target plus scheme, the exporter would then be eligible for an incentive of upto 15 per cent on the incremental value of his exports (for 100 per cent incremental export growth, the incentive was 15 per cent). This would translate into a reward of Rs. 75 crore (15 per cent of Rs. 500 crore) on a nominal value addition. Thus, the Target Plus Scheme carried the the dang danger er of circ circul ular ar trad tradin ing. g. Th This is coul could d crea create te prob proble lems ms for for the the government in the long run. The actual working of the Target Plus Scheme showed that the above criticism was correct as it led to a substantial revenue leakage. Accordingly, the government abandoned this scheme in the second supplement to FTP announced on April 7, 2006.
3.
Risk of importing outdated machinery.
The FTP allowed the import of second-hand machinery without any age limit. This might result in the import of very v ery old machines from the Western count countri ries es whic which h could could be outd outdat ated ed and and dila dilapi pida date ted. d. Impor Importt of such such machinery can become a burden on the economy. In any case it is not likely to help exports at all. 4.
Policy fails to take a holistic view of trade issues.
The most important critics of FTP is that it fails to take the holistic view of the issues and concerns intricately connected with foreign trade or draw up a cleare clearerr road road map to achiev achievee the target targeted ed export export growth growth.. As correc correctly tly 10
pointed out by TNC Rajagopalan, the FTP says next to nothing about the governm government ent’s ’s negoti negotiati ating ng stance stance at the WTO, WTO, trade trade relati relations ons with with the neighb neighbor, or, approa approach ch toward towardss bilate bilateral ral trade trade agreem agreement ents, s, integr integrati ation on of develop development ment and global globaliza izatio tion n strate strategie gies, s, helpin helping g market market penetr penetrati ation, on, market access issues, competitiveness, projects exports and so on. 5.
Relative importance of the home market .
As far far as the the issu issuee of the the rela relati tive ve impor importa tanc ncee of the the home home mark market et is concerned, Deepak Nayyar argues that in large countries like India, where the the dome domest stic ic mark market et is over overwh whel elmi ming ngly ly impo import rtan ant, t, sust sustai aine ned d industrialization only be based on the growth of the internal market." In the ultima ultimate te analy analysis sis,, large large economi economies es must must endeavo endeavorr to intern internali alize ze external markets. Therefore, industrialization may stress manufacturing for the domest domestic ic market market through through import import substi substitut tution ion or manufa manufactu cturin ring g for expor exportt to exter externa nall mark market ets. s. "In "In term termss of an appr approp opri riat atee stra strate tegy gy for for industrialization striking a balance between import substitution and export promotion is the equivalent of -walking on two legs. An environment that produ produces ces a specta spectacul cular ar sport sport perfor performan mance ce is also also conduci conducive ve to effici efficient ent import substitution and rapid economic growth”. 6. The natur naturee or the the degree degree of State State inter intervent vention ion
As far as the issue of State intervention in the process of industrialization is concerned, the experience of the second half of the twentieth century shows that the guiding and Suppo Support rtiv ivee role role of the the Stat Statee has has been been at the the found foundat atio ion n so succ succes essf sful ul development among the late industrialism. This is true not only in the case of the centrally planned economies of Eastern Europe but also in the case of the market economies of East Asia. According to Deepak Nayyar, in terms of State State interv interventi ention, on, there there is not much much to disti distingui nguish sh betwee between n import import substitution and export promotion. In the former, the State protects the domestic domestic capitalists capitalists from foreign competition competition in the home market market while in the the latt latter er,, the the Stat Statee prot protec ects ts the the dome domest stic ic capi capita tali list stss from from fore foreig ign n competition in the world market. It is the -nature' of State Intervention that matters. It is this nature and degree of State intervention in the foreign trade sect sector or that that dese deserv rves es seri serious ous atte attent ntio ion n in the the conte context xt of plann plannin ing g for for industrialization. The experience of India illustrates that it is possible for State State interv intervent ention ion to create create an oligopo oligopolis listic tic situat situation ion in a compet competiti itive ve environment, just as the experience of the Republic of Korea illustrates that
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it is possible for State intervention to create a competitive situation in an oligopolistic environment". ISSUES OF CONCERN
The commerce minister has presented a very optimistic long term vision of increasing the country’s share of world trade to 5 percent by 2020, which means an eight fold increase in exports through 25 percent annual growth for next twelve years. This is an daunting task. In fact in the short term scenario is worrisome as global economy is slowing down, world’s largest economy USA is into recession and uncertainty about the future of rupee dollar exchange rate continues. A number of critics argue that given this scenario, the achievement of the target seems doubtful. In addition, the following short coming of the forth comings in the Fourth Supplement of Trade Policy: 1.
2. 3. 4. 5.
No concrete solutions to delays and transaction costs. Inadequate Inadequate expansion expansion of of the focus focus market market scheme scheme to find new new markets. markets. No expansion expansion of focus focus product product scheme scheme to to diversif diversify y export export basket. basket. Software Software technolo technology gy park park of India India given given no income income tax exempti exemption. on. Poor export export growth, growth, in in rupee terms, terms, and and in volume volume terms, terms, ignored. ignored.
In view of the recessionary conditions in the global market, the government of India downsized the export target for the year 2008-09 from $200 billion as announced in fourth supplement to FTP in April 2008 to $175 billion in February 2009. However this reduced target has been missed. Estimates presently available indicate that exports in the year 2008-09 will be between $168 billio billion n to $169 billi billion. on. This This disappo disappoint inting ing perfor performan mance ce is being being attr attrib ibut uted ed to weak weak dema demand nd from from USA USA and and Eu Euro rope pe.. Accor Accordi ding ng to the the Commerce Ministry, India’s exports could be flat in 2009-10, against the backdrop of a 9 per cent fall in global trade forecast by the WTO(World Trade Organization).
RECOMMENDATIONS
The best recommendation would be the more and more establishment of SEZ. The concept of is as such “conceptually SEZ’s operate like foreign entities within the territory of the country. They are usually separated by physical barriers from each other and from the rest of the country. They 12
have no trade barriers. The country’s trade barriers apply strictly within the area excluding the SEZs which wh ich is called as the domestic tariff area(DTA). Any goods sold by agents within the DTA to agents inside the SEZs are treated as exports of the country, and those purchased by the agents in the DTA from those in SEZs, as imports subject to custom cu stom duty. Any trade between the SEZs and outside world is allowed to bypass all custom requirements applicable to the DTA. That is foreign goods enter the SEZ free of customs duty, and exit abroad without being subject to any domestic taxes or customs regulations”. The salient features of SEZs are:
A designated duty free enclave to be treated as foreign territory only for trade operations and duties and tariffs No license required for imports. Manufacturing or service activities allowed. SEZ units to be positive net foreign exchange earners within three years Domestic sales subject to full customs duty and import policy in force Full freedom for subcontracting No routine examination by custom authorities of import/export of cargo.
SEZ Act, 2005 To instill confidence in investors and signal the government’s commitment to a stable SEZ policy regime , the special economic zones act 2005, passed by Parliament in may 2005. The SEZ Act, 2005 supported by SEZ rules, came into effect on February 10,2006. The main objective of SEZ Act are generation of additional economic activity, promotion of export of goods and services, promotion of investment from domestic and foreign resources, creation creation of employment employment opportunities opportunities and development development of infrastru infrastructure cture facilities. The salient features of the act are as follows: Governance, providing high attractive fiscal incentives and establishment of infrastructure for free and convenient trade practices. BENEFITS OF SEZ
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Helps in removing red tapism over India’s international trade Labour laws can be relaxed resulting in more and more establishment of industries Through the promotion of SEZs it would become possible to provide world class infrastructure which is necessary to ensure unhindered production. SEZs can reduce procedural complexities,bureaucratic hassles and barriers raised by monetary, trade, fiscal, taxation, tariff and labour policies. Tax incentives, infrastructure facilities, simplified trade procedures, single window clearance, exemption from various restriction that characterize the investment climate in the domestic economy. For the better trade of our country more and more of SEZs must be promoted in the country. As SEZs are expected to give a big push to expor exports ts,, empl employ oyme ment nt and and inves investm tmen ent. t. In fact fact they they act act as carr carrie iers rs of economic prosperity that will help in boosting economic growth at a very high rate, usher in affluence in rural areas, provide large number of jobs in manufacturing and other services, develop infrastructural facilities, make India India more more compet competiti itive, ve, attrac attractt global global manufa manufactu cturi ring ng and technol technologi ogical cal skills, help in slowing down rural urban migration and help in creating large number of jobs in manufacturing and other services.
REFRENCES
INDIAN ECONOMY- MISHRA AND PURI 27th Revised Edition Himalaya Publishing House
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