Gujarat BoardEnglish MediumSTD 11 CommerceEconomicsEconomic Reforms3 Marks
Question
Explain foreign trade policy after globalization.
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Answer
India has adopted planning since $1951.$
During the first four decades of planning, India reposed faith in public sector than private sector and protected it as a reserved sector.
More facilities were provided to public sector for its development.
In short, though there was mixed economy, public sector was pampered while private sector was neglected.
Due to political meddling, and inefficiency being rampant in it, the public sector units incurred losses and the return on total investment was very low.
Therefore, since $1991,$ liberalization, privatization and globalization were given more importance in new economic policy.
Steps Following changes are seen after globalization of foreign trade policy of India.
Instead of protective, free trade policy is accepted. Restrictions on foreign trade are gradually decrease. Import- export license has made easy.
Import duty is decrease step by step. Hence, this duty is high in comparison with China and country of South Korea.
State has followed fixed policy for traders or producers and investors of home country and $7.$ foreign country. Discriminating policy is gradually abolished. $0'$
After $1991$ economic policies in India were reformed to enhance trade and investments. Foreign trade policy was made outward looking from a restrictive inward looking one. Indian rupee was allowed to be converted to foreign currencies at market rates from earlier official conversion.
With promotion of $FDI$ and privatization, foreign companies can sell different types of goods in India.
After globalization India's trade with non-traditional trade partners or new countries increased and new trade policy aimed at increasing India's percentage share in world trade.
India became a member of World Trade Organization$(WTO)$ in $1995$ and trade policy changes were made according to $WTO $ rules. .
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