EXIM Policy of India | Economic & Social Issues | RBI Grade B Phase 2 | Career Launcher

The foreign trade policy (FTP) also known as EXIM (export-import) policy is regulated by the Foreign Trade Development and Regulation Act, 1992. The main governing body in the matters concerning the EXIM policy is DGFT (Directorate General of Foreign Trade).

EXIM policy is an important topic included under Economic Globalization in ESI paper of RBI Grade B Mains. In this article, we will study important elements that candidates must prepare under the EXIM Policy.

Objectives of Foreign Trade Development and Regulation Act, 1992

As you already know that the EXIM policy is regulated by the Foreign Trade Development and Regulation Act, 1992. The main objective of this act is to provide the development and regulation of foreign trade by facilitating imports into and augmenting exports from India. Foreign Trade Act has replaced the earlier law known as the imports and Exports (Control) Act 1947.

Objectives of EXIM Policy of India

Now, let us look at the objectives of EXIM policy of India:

  • To promote persistent growth in exports to acquire a share of at least 1% of international merchandise trade
  • To encourage stable economic expansion by offering access to necessary capital goods, raw materials, intermediate products, consumables, installations, and elements essential for providing services and expanding production.
  • To improve the technological potency and productivity of Indian agriculture, companies, and services, thus enhancing their competitive power while creating fresh employment possibilities, and to stimulate the accomplishment of globally acknowledged norms of quality.
  • To supply consumers with fine condition goods and services at globally competitive rates while simultaneously generating a level playing range for domestic production.

EXIM Bank of India | Management & Functions of EXIM Bank of India

Effective January 1, 1982, the Exim Bank was established to take responsibility of the business of global finance branch of the IDBI (Industrial Development Bank of India) and to deliver monetary support to importers and exporters and to serve as a chief financial foundation for collaborating the functioning of other organizations involved in the financing of imports and exports of products and services.

The sanctioned wealth of Exim Bank is Rs. 200 crores and the paid-up asset is Rs. 100 crores completely endorsed by the Central Government.

Organization and Management

The Export-Import Bank is administered by a Board comprising of a Chairman, the Managing Director along with 17 Directors signifying distinct areas. They are the Commerce Secretary, Secretary to Banking, Secretary to the Department of Industrial Board, Finance Secretary, Secretary IDBI, Secretary RBI, Secretary ECGC, 3 directors depicting additional scheduled commercial banks, 4 Directors elected from the export society, and three additional symbolizing departments and ministries.

Functions of Exim Bank

The Exim bank performs the following crucial responsibilities:

  • The bank offers immediate monetary help to exporters of the plant, equipment, and corresponding services by means of medium-term credit.
  • To guarantee the issue of stocks, bonds, shares, and debentures of any organization involved in exports.
  • The bank put forward rediscount of export bills for a duration no longer than 90 days against short period usage export invoices depreciated by commercial banks.
  • It also provides foreign buyers a credit to overseas importers for import of Indian industrial products and concerning services.
  • To create and fund export-oriented enterprises.
  • To accumulate and assemble the market and credit particulars about foreign trade.

These are some of the important concepts in the EXIM policy that you must read for the RBI Grade B Phase-2 exams. Now, with the reopening of the lockdown and announcement of major examinations in October-November, it is being speculated that RBI will soon release its notification with a similar timeline.

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