The
new policy substantially eliminates licensing quantitative restrictions and
other regulatory discretionary controls. The main features of the new trade
policy are
1)
Free export and import
2)
Rationalization of tariff structure
3)
Decentralization
4)
Exchange rate of reforms
5)
Phased manufacturing Program
6)
Trading House
Free
export and import
The
new trade policy made major changes in the import licensing system by replacing
a large part of administered licensing of imports by import element linked to
export earning
Rationalization
of Tariff Structure
On
the recommendation of chelliah committee import duty was drastically reduced to
establish party in price goods produce domestically and International.
Decentralization
The
new trade policy aimed at progressive Decentralization. The Government
decontrolled 116 items allowing their export without any licensing formalities.
Another 29 items were shifted open general license (OGL) it also decimalized 16
export items and import items including new print , non-ferrous materials
natural rubber raw material for fertilizers. How ever 8 items (petroleum
products, fertilizers).
Exchange
rate reform
The
government devalued the rupee July 1991 which lead to deprecation on the value
of rupee against the five major international currencies by roughly 22%.
Phased manufacturing program
According
to which organization where required to substitute all the imported parts with
Indian parts in a specified period was abolished.
Trading
house
The
1991 the policy allowed export houses and trading houses to import a wide range
of items. The government also permitted the setting up of trading houses with
51%of foreign equity for the purpose of promoting
Incentives
and Promotions for Export
1)
Pass Book scheme
2)
Advance Licenses
3)
Tax Benefit
4)
Finance Facility
5)
Subsidies on Domestic Raw Material
6)
Blanket Exchange Permit scheme
7)
Free Trade Zones and Export Oriented Units
8) Duty Draw Back System
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