For about 40 years (1950-90), foreign trade of India suffered from strict bureaucratic and discretionary controls. Similarly, foreign exchange transactions were tightly controlled by the Government and the Reserve Bank of India (RBI). From Independence in 1947 till mid-1990s, India, with some exceptions, always faced deficit in its balance of payments, i.e. value of imports always exceeded the value of exports. Exports remained relatively sluggish owing to lack of exportable surplus, competition in the international market, inflation at home, and increasing protectionist policies of the developed countries.
Beginning 1991, the Government of India introduced a series of reforms to liberalise and globalise the Indian economy. India's approach to openness has been cautious, contingent on achieving certain preconditions to ensure an orderly process of liberalisation and ensuring macroeconomic stability. The broad approach to reforms in the foreign trade sector was laid out in the Report of the High Level Committee on Balance of Payments (Chairman: C. Rangarajan), 1993.
The major trade policy changes in the post-1991 period have included (a) simplification of procedures, (b) removal of quantitative restrictions, (c) substantial reduction in the tariff rates, (d) moving towards current account convertibility, (e) liberal inflows of private capital, (f) shift towards market-determined exchange rate, (g) gradual liberalisation of restrictions on outflows, (h) focus on export growth and (i) attracting non-debt creating capital flows.
In recognition of the growing importance of foreign trade in the Indian economy, this book provides a comprehensive description and analysis of post-Independence developments in India's foreign trade and allied sectors with focus on post-1991 period.
The book contains 19 chapters which are categorized into the following six theme parts: Part I: International Trade: Theoretical Settings and Emerging Pattern. Part II: India's Foreign Trade Policy and Developments. Part III: India's Exports, Imports, Customs Tariff, and Special Economic Zones (SEZs). Part IV: Exchange Rate and Convertibility. Part V: Foreign Debt, Aid and Investment. Part VI: WTO and India's Regional Trade Agreements.