Foreign trade means the exchange of goods and services between two or more countries/borders or territories. From the time of independence, India has been one of the important trading countries, exporting primary items like cotton, raw silk, sugar, wool, jute, indigo, etc. Moreover, it is an importer of finished consumer goods like woollen clothes, cotton, silk, and capital goods like light machinery manufactured in Britain.
During this period, Britain held the monopoly over India’s imports and exports. Therefore, most of the foreign trade was restricted only to Britain, while the rest half was allowed to trade with other countries like Ceylon (Sri Lanka), China, and Persia (Iran).
India was a large exporter in the colonial period. However, it did not affect the country’s economy. Commodities like food grains, clothes, kerosene, etc., hit the country hard with its scarcity.
Importance of foreign trade
Globalisation has assisted to expand services in the foreign market. The remarkable features of foreign trade in India are maritime trade, diversity in exports, state trading, and change in imports, unfavourable or negative trade. There are mainly three types of foreign trade for instance entrepot trade, import trade as well as export trade. Most export commodities of India are Ready-made garments (RMG), linoleum, marine products and engineering goods. Foreign trade in India plays an important role in the growth of the agriculture sector. Every year, India effectively exports vegetables, fruits, cotton, and rice to different countries and this export of goods assists in making farmers prosperous.
There are multiple advantages of foreign trade as it promotes efficiency in the field of production, more employment, reduces trade fluctuations, increases revenues, and longer product lifespan. India exported goods worth almost USD 279 billion in 2020. Foreign trade plays a critical role in the economy of every country as well as it effectively contributes to a country’s GDP. International trade assists in the expansion of goods or services in the foreign market as well as increasing the rate of revenue. It encourages the innovation of products and the effective availability of services and goods.
Foreign trade assists in inspiring the farmers of India for their development as well as assists in economic prosperity. It has assisted in reducing the rate of unemployment in India and developing the GDP of the country. The government of India focuses on the development of export and import in other countries. The major export partners of India are United Arab Emirates, Hong Kong, China, Bangladesh and Singapore.
The import partners of India are Iraq, United Arab Emirates, Saudi Arabia, the United States, as well as China. Foreign trade or International trade can also be described as a significant tool in terms of maintaining diplomatic relations among countries. For instance, India stopped the exports of services or goods to Pakistan due to the Pulwama attack. In the present scenario, foreign trade became an essential part of the policies of the government. Import-export tax and charges assist in the development of revenue.
FAQs
What is the role of the Directorate General of Foreign Trade (DGFT) in the export process?
The DGFT is the primary regulatory authority responsible for formulating and implementing India’s Foreign Trade Policy. It issues licenses, permits, and authorizations required for exporting certain goods from India and regulates trade-related matters.
Do I need a license to export goods from India to foreign territories?
Yes, depending on the nature of the goods being exported and the destination country, exporters may need to obtain various licenses and permits from the relevant authorities in India, such as the Directorate General of Foreign Trade (DGFT) or other regulatory bodies.
Practice area's of B K Goyal & Co LLP
Income Tax Return Filing | Income Tax Appeal | Income Tax Notice | GST Registration | GST Return Filing | FSSAI Registration | Company Registration | Company Audit | Company Annual Compliance | Income Tax Audit | Nidhi Company Registration| LLP Registration | Accounting in India | NGO Registration | NGO Audit | ESG | BRSR | Private Security Agency | Udyam Registration | Trademark Registration | Copyright Registration | Patent Registration | Import Export Code | Forensic Accounting and Fraud Detection | Section 8 Company | Foreign Company | 80G and 12A Certificate | FCRA Registration |DGGI Cases | Scrutiny Cases | Income Escapement Cases | Search & Seizure | CIT Appeal | ITAT Appeal | Auditors | Internal Audit | Financial Audit | Process Audit | IEC Code | CA Certification | Income Tax Penalty Notice u/s 271(1)(c) | Income Tax Notice u/s 142(1) | Income Tax Notice u/s 144 |Income Tax Notice u/s 148 | Income Tax Demand Notice | Psara License | FCRA Online
Company Registration Services in major cities of India
Company Registration in Jaipur | Company Registration in Delhi | Company Registration in Pune | Company Registration in Hyderabad | Company Registration in Bangalore | Company Registration in Chennai | Company Registration in Kolkata | Company Registration in Mumbai | Company Registration in India | Company Registration in Gurgaon | Company Registration in Noida | Company Registration in lucknow
Complete CA Services
RERA Services
Most read resources
tnreginet |rajssp | jharsewa | picme | pmkisan | webland | bonafide certificate | rent agreement format | tax audit applicability | 7/12 online maharasthra | kerala psc registration | antyodaya saral portal | appointment letter format | 115bac | section 41 of income tax act | GST Search Taxpayer | 194h | section 185 of companies act 2013 | caro 2020 | Challan 280 | itr intimation password | internal audit applicability | preliminiary expenses | mAadhar | e shram card | 194r | ec tamilnadu | 194a of income tax act | 80ddb | aaple sarkar portal | epf activation | scrap business | brsr | section 135 of companies act 2013 | depreciation on computer | section 186 of companies act 2013 | 80ttb | section 115bab | section 115ba | section 148 of income tax act | 80dd | 44ae of Income tax act | west bengal land registration | 194o of income tax act | 270a of income tax act | 80ccc | traces portal | 92e of income tax act | 142(1) of Income Tax Act | 80c of Income Tax Act | Directorate general of GST Intelligence | form 16 | section 164 of companies act | section 194a | section 138 of companies act 2013 | section 133 of companies act 2013 | rtps | patta chitta