India’s new foreign trade policy

The target: to double India’s share in global trade

Currently India’s share of the global trade is stands at a miniscule 1%.

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 Foreign Trade Policy is rooted in this belief and built around two major objectives.

These are:

– To double our percentage share of global merchandise trade within the next five years; and

– To act as an effective instrument of economic growth by giving a thrust to employment generation. [DGFT India]

The special focus areas the Commerce ministry has identified are very much in the traditional ‘cottage-industry’ areas, demonstrating a continuing dogmatic love of small-scale industries. For India to compete with the likes of China for a slice of the global manufacturing pie, scale is important. The same is true for massive employment generation. Without proper incentives, big manufacturing may not quite find its way to India.

Related Link: Nagesh Kumar’s wish list

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