Foreign Trade in India dates back to the 16th century. With East India Company, the trade got strengthened and India became one of the newly industrialized nations.
During the 16th World war India was exporter of Manu pictured goods to Asia & Africa.
Where as it imported primary goods from Europe. At Independence India had a comfortable for ex. position valued at 1736 cr. Pound sterling left by Brithshers. However during initial years of planning India laid emphasis in the fall of our foreign exchange reserves. Thus the need to promote exports was felt. The main points included in the foreign trade during the planned period are 8:-
- Both exports and imports have grown considerably.
- India has adopt an Import substitution approach.
- Liberal Import of capital goods through helped the development of heavy and basic industries but demand out for ex reserves
- Devaluation of rupee.
- Imports were larger than exports after 1951 except during 1972-73 & 76-77
- Protectionist measures introduced by developed nations adversely affected India’s exports of carpets, iron, leather etc.
- India’s credit rating deteriorated.
- India experienced negative trends in the external sector in 1990’s due to fall of USSR.
Post Reform Period (1991 onwards)
- Liberalization in economic and trade policy from change in economic and trade policy from inward oriented to market-oriented policy.
- Indian economy got info grated with the liberalization, privatization & globalization policy with world economy.
- Policy initiatives aimed at liberalization deal with creating an operating environment of substantial freedom for the business enterprises from permits/ quotas/ licensing.
- Impact of reforms has lev. Encouraging as the share of India’s external sector in global commodity exports has went up from 4% to 8% in 2003.
- India’s exports as % of GDP has risen to 8.24% in 2000.
- India has emerged as a leading exporter of services especially software in the world.
- A significant change has also taken place in the direction of foreign trade i.e. source of imports and distinction of exports.
- The govt. is committed to achieve a target of at least 1 % share in the global exports in enhancing its current exports from USD 52 bn. To USD 80 bn. By the end of 2007 through reforms in trade policy and various promotion measures.