Saturday, March 21, 2009


Since the advent of internationalism, nations of the world have become members of the world community. Countries have become interdependent. It is not possible for any single state to produce all that it needs, as natural resources in variety and reserves are limited to certain areas only.

So export is very necessary in the modern civilized world. Prior to Independence, the pattern of trade of India was typically colonial. India used to supply only raw materials to industrialized nations as a result there was no industrial development in India.

In the beginning, after Independence, we imported heavy machinery that we could not produce ourselves. At the same time the aim of the government was to become self-sufficient in producing as many goods as it was products. India's exports before Independence proved harmful to the economy of India. We were exporting only raw material and were buying finished goods of the same raw material at higher prices. British rulers had restricted our exports to a few countries and the balance of trade was not favorable to slave India.

After the Second World War, India started export of same goods to other countries also and developed the export potential to some extent.

The export policy of the Indian Government after Independence was guided by two considerations that are to maximize the earnings and to ensure that exports are not affected if the home demand for a commodity is not adequately met. It was devaluation and Korean War that provided stimulus to our exports. Soon export promotion became a necessity. It was realized that export promotion should be preceded by industrialization. Five-year plans proved handy.

Quite some decades ago an import and export policy committee known as Mudalier Committee was set up to examine the export policy. It pointed out he factors that were hindering exports were both external as well as internal. It informed that tea, cotton textiles and jute products were the only staple items for export.

Moreover there is more competition in the international market and so even our export items need quality control and reasonable prices. The Committee recommended the increasing of allocation of exportable items, income tax relief to export industries and the promotion of exports through entitlements.

The Government took many steps according to the recommendations of the Committee and an Export Promotion Advisory Council comprising representation of business and industry was set up by the Central Government. Even devaluation of the rupee was tried in this context.

Our exports need to exceed our imports. It is with the help of foreign exchange that we can undertake more schemes for the development of Indian economy. Increasing exports need a complete reorientation of our policy towards the different sectors, private and public, as well as toward the consumption at home. We must be quality conscious of the exportable items if not our reputation will be at stake.

To a great extent, the State Trading Corporation of India is taking care of this.

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