For any business in the global commerce space, it is essential to be aware of the Government’s policies regarding imports and exports. As India cemented its presence on the global stage, its policies have evolved alongside.
Post-Independence Economic Growth
At the time of independence 75 years ago, the Indian economy was geared towards self-reliance and socialist policies prioritizing domestic manufacturing and limited exports of Indian goods worldwide. The British had left the Indian economy stunted, resulting in India struggling to find its feet, with the rupee incredibly overvalued. India remained a closed economy with low levels of growth and was largely excluded from global exchanges of capital and technology. Indian buyers had few options, and export finance was fairly rudimentary.
Globalizing India’s Economy
Things began to change in the 1990s with the adoption of new government policies for international trade that opened up the economy and focused on liberalization. Led by Finance Minister Manmohan Singh under the Government of Prime Minister Narasimha Rao, India opted for a flexible exchange rate, pushing Indian exports abroad to global buyers while opening up to foreign investment by bringing down internal obstacles. India opened its arms to globalization through the tool of Exim policies. These policies were crafted for 5-year durations, after which they were revised to create targeted and informed progress.
Bringing Indian Goods to A Global Market
In the late 1990s, Indian international trade policies took further earlier efforts by reducing the list of restricted items, decreasing duties on imported capital goods, and offering exporters credit to import materials for export purposes. These measures helped accelerate India’s industrial growth and increase its global competitiveness while protecting the Indian agricultural sector. The first few years of the 21st century proved equally favorable for Indian trade growth. Special Economic Zones were created, duty-free imports were allowed, export incentives were increased, and policies were reviewed to ensure Indian industries were made more productive.
Booming Indian Trade In Recent Years
In recent years, India recorded $421 billion in merchandise exports in 2021-2022, with exports reaching $676 billion. India’s ports remain at the forefront of export-import transport, with 95% of merchandise trade done by sea. Export incentives continue to boost exports, from duty-free imports of raw materials to machinery for production. Today, there are many ways to manage export finances and protect oneself from credit risk. As India’s foreign policy pushes the need for globalization, trade policies are expected to continue to take advantage of the country’s growing presence in the global economy.
Working With A Credit Insurance Partner
Credit insurance helps secure faster funding for your export invoice while protecting your business from credit risk. For companies looking to boost export efforts, working with a credit insurance partner can significantly decrease complications and challenges to your growth. Credlix works with you to take care of your financing so that you can direct your energy on scaling your business.