TRADE POLICY REFORMS

TRADE POLICY REFORMS

It is now widely acknowledged that major reforms in trade policy and procedures since the EXIM Policy (1992-97) announced in 1992, have stepped up the transitional process of Indian economy towards globalization by encouraging exports and permitting imports of essential inputs as well as capital goods.
A major objective of the EXIM Policy (1992-97) and the subsequent changes introduced during the last five years was to phase out quantitative restrictions in the form of licensing and other discretionary controls. Another significant objective was to continuously scale down the tariff barriers. To a large extent, these objectives have bee ' met:
In 1991, imports were regulated by means of a positive list of freely importable items; Since 1992, imports are regulated through a limited negative list, which has been consistently pruned year by year.
Quantitative restriedons on imports of most intermediate inputs and capital goods have been eliminated.
In July 1991, out of 5021 Harmonised System (HS) tariff lines (6 digits), 4000 lines were subject to import licensing restrictions. As of December 1995, more
A large numbeJ; of items covering 1487 tariff lines whose import is otherwise restricted, are now allowed to be imported under freely tradable Special Imports Licences.
Customs duty rates have been substantially cut down across the board, from a peak of 300 percent in 1990 to a peak of 40 percent in 1997.
All these clearly show that India is consistently marching towards globalisation by opening up its economy, by removing the importers as well as exporters from the clutches of unwanted controls and regulations and also by bringing down the tariff rates to that level comparable to international standards.