Discuss in detail the objectives and salient features of the foreign trade development regulation act, 1992.

Q. Discuss in detail the objectives and salient features of the foreign trade development regulation act, 1992. 

Foreign Trade (Development and Regulation) Act, 1992

The Foreign Trade (Development and Regulation) Act, 1992, was enacted to consolidate and regulate foreign trade in India and to facilitate the country's economic development through trade. It replaced the earlier Import and Export (Control) Act, 1947, and provided a comprehensive framework for promoting and regulating exports and imports.

Objectives of the Act

  1. Promotion of Foreign Trade:
    To facilitate and promote foreign trade, thereby boosting India's economic growth by ensuring access to global markets and improving the balance of payments.

  2. Regulation of Exports and Imports:
    To regulate exports and imports effectively, ensuring adherence to international commitments and maintaining control over sensitive goods.

  3. Development of Trade Relations:
    To foster harmonious trade relations with other countries, ensuring mutual benefits and compliance with international agreements such as WTO norms.

  4. Control Over Strategic Goods:
    To regulate the export and import of items related to defense, security, and sensitive technologies.

  5. Encouragement of Competitiveness:
    To enhance the competitiveness of Indian goods in global markets by streamlining procedures and policies.

  6. Facilitation of Ease of Doing Business:
    To reduce bureaucratic hurdles and ensure smoother procedures for exporters and importers.

Salient Features of the Act

  1. Export-Import Policy (EXIM Policy):
    The Act empowers the government to formulate and announce an EXIM policy, which provides guidelines for regulating foreign trade, including the prohibition, restriction, or regulation of imports and exports.

  2. Director General of Foreign Trade (DGFT):
    The Act establishes the office of the DGFT, responsible for implementing the EXIM policy and issuing licenses and authorizations required for foreign trade.

  3. Licensing:
    The Act mandates licensing for certain categories of goods to control their import and export. Licenses can be issued, suspended, or cancelled by the DGFT.

  4. Prohibition and Restriction of Trade:
    It provides the government with powers to prohibit, restrict, or regulate trade for reasons such as national security, conservation of natural resources, or adherence to international treaties.

  5. Duty-Free Import Authorization:
    The Act allows duty exemptions on goods imported for specific purposes, such as manufacturing export-oriented products, under certain conditions.

  6. Penalties for Violations:
    The Act prescribes stringent penalties for violations, including monetary fines, cancellation of licenses, or even imprisonment in cases of grave offenses.

  7. Power to Amend Policies:
    The Act grants the central government the power to amend the EXIM policy at any time to meet economic, security, or other strategic requirements.

  8. Safeguard Measures:
    The government can impose anti-dumping duties, safeguard duties, and quantitative restrictions to protect domestic industries from unfair trade practices.

  9. Provisions for Adjudication and Appeals:
    It provides for the appointment of adjudicating authorities to resolve disputes arising under the Act and allows for appeals to higher authorities.

  10. Trade Facilitation:
    Simplifies procedures for documentation, approvals, and compliance to facilitate smooth trade operations.

Impact of the Act

  • Economic Growth: It has significantly contributed to India's integration into the global economy by facilitating exports and imports.
  • Streamlining Trade: The Act has reduced bureaucratic hurdles and made trade processes more efficient.
  • Global Competitiveness: Indian businesses have become more competitive due to policy reforms under the Act.
  • Strategic Control: Sensitive goods and technologies are regulated effectively, ensuring national security.

Conclusion

The Foreign Trade (Development and Regulation) Act, 1992, has been instrumental in shaping India’s foreign trade policy and driving its economic growth. By balancing regulation with facilitation, it has enabled India to emerge as a significant player in global trade while safeguarding its national interests.

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