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THERE is little doubt that the Exim Policy for 2002-2007 is a radical
departure from past such policies as far as direction is concerned. That direction is firmly embedded in the current general economic and
trade philosophy being favoured by the present NDA Government, namely, pursuing the path of a relatively open economy in the quest for rapid
development. However, since even within the framework of a general policy direction towards a particular goal there must always be an
architect providing the specific details of the movement, there can be no hesitation in complimenting the Union Commerce Minister, Mr Murasoli
Maran, for fleshing out the Exim Policy in the way it has been.
There is no point in going into the details of the policy because every part of it has been designed to subserve the overall interest of a
vastly liberalised export policy (the import policy having been already crafted to a large extent by rules and guidelines laid down by the
WTO). In fact, even in the export sector, the relaxation of the quantitative restrictions which were in existence with regard to a
number of commodities can be said to have followed the spirit of GATT 1994, the overall objective of which is to free international trade of
all such restrictions whether flowing from tariff impositions or non-tariff sources.
Indeed, there is the clear danger of some of the export-encouraging measures taken by the 2002-2007 Exim Policy of attracting the notice of
WTO members who may in future challenge some of the provisions as being unacceptable under GATT 1994 by virtue of their "unfair" trade
promotion character leading, basically, to a lowering of the price of Indian products in the world market. However, on the face of it, the
danger to the Exim Policy from this source should not be too great on the assumption that those who have drawn up the policy have been
mindful of this aspect of potential challenge from some WTO members, who have habitually been trying to use the Geneva-based agency to
protect their own inefficient export industries.
Without going into the details of the Exim Policy, a clear enough idea of the magnitude of the change sought to be introduced by the new
policy can be got from what Mr Maran has to say about its basic orientation. Among other things, he said: "The policy is comprehensive
in scope, taking care of more than 80 per cent of the population living in the rural areas and will also benefit a wide range of people,"
adding, "I have tried to forge a lasting partnership among the Union Government, the State governments, exporters and the people at large."
This is the descriptive part of the Minister's estimation of the policy. The exhortive part is as follows: after saying that the
objective will not be attained by the "business as usual" route, he said that "We have simplified the process of exporting to such an
extent that even the small artisans feel motivated to export." One certainly hopes that the relaxations in the new policy will induce
exporters of all hues to take the fullest advantage and, consequently, improve substantially the export performance of the Indian economy.
There is nothing wrong with the aspiration; the problem is something more than a helpful policy may be required to adequately enthuse
exporters, big and small (specially the latter), that the international market is a gold mine and that it is high time that very old habits and
"bents of mind" be given up to chart out a fresh course, which has already been adopted with great success by fellow exporters in other
Asian economies. As Mr Maran himself has been quoted as saying: "India needs to release itself from feelings of export pessimism and apathy
and employ international trade as an engine of growth."
A faithful indicator of the place given to exports by both the authorities and the players in the field is that a country harbouring
more than a fifth of all mankind in terms of population is today accountable for not more than two-thirds of one per cent of total
global trade. The aim of the Exim Policy is to push up this dismal proportion to just one per cent by the end of the five-year period,
thereby focussing attention not merely on the total inadequacy of the effort — given India's physical size in terms of the number of hands
that can be put to work — but also on the need to ascertain the basic reasons why such a gigantic powerhouse of economic growth and
development generally has been allowed to stagnate and deteriorate over the decades since Independence.
If the 2002-2007 Exim Policy can alone provide the framework for a drastic turnaround in export performance, it can safely be argued that
there has been nothing wrong with the basic business motivation of Indian entrepreneurs and traders over the past decades. If this is in
fact so, then the dismal export performance till now will have to be attributed solely to factors such as hitches at the level of
implementation of good policies, infrastructural and logistics hurdles, and also personnel problems. As is evident, this is too simplistic a
model to build in an effort to explain the export weakness of the Indian economy, which of course does not in any way weaken the argument
that one road towards achieving a better export performance would be to enable exporters scrupulously to keep to delivery schedules and to
ensure that product quality is at least as good as that of immediate competitors.
Without sounding pessimistic, the point needs to be made that the new Exim Policy — no matter how helpful it is as regards the framework of
operations — could fall victim to infrastructural, personnel and quality bottlenecks, aspects of the economy which simply cannot be
improved by a stroke of the pen. Certainly, the setting up of Special Economic Zones will, to a large extent, dilute the impact of these
hurdles and, consequently, lead to good export performance from these zones. But the leading question is: To what extent will the SEZs bring
about a seachange in the economy's export sphere when, in the words of the Commerce Minister, the target is, among others, "80 per cent of the
population living in the rural areas"?
To say this is not to belittle in any way the commendable work done by the NDA Government in sculpting an Exim Policy which, at least on the
face of it, contains the germ of an export explosion which, if persisted with over the next decade, could radically change the face of
the Indian economy.
However, it is always sensible to be realistic, specially when singing the praises of a good policy document which, at the end of it all, will
have to be implemented by economic agents who have been accustomed to functioning in a certain way over decades not quite conducive to
optimal national economic performance.
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