India has a very negative balance of trade as it has to import a lot of oil, project goods, defence equipment, oil seeds, pulses, precious and semi-precious stones, uncut diamonds, etc.
Although India exports many items, yet the imports far outstrip the exports. To set the balance of trade on correct course, Government of India is constancy endeavoring to promote exports.
In the recent times steps have been taken to decentralize the export permissions, the import-export policy (EXIM Policy) has been restructured, thrust sectors are being identified and Special Economic Zones (SEZs) being set up. The Ministry of Commerce has signed many free trade agreements with countries and negotiations arc on with many others to improve bilateral trade relations.
In order to promote trade, Government of India has a number of public sector agencies. The Minerals and Metal Trading Corporation of India (MMTC), deals with the import and export of minerals (other than fertilizers and petroleum) and metals.
State Trading Corporation of India Limited is a trading company owned by Government of India which imports and exports items in competition with private import-export houses. In times of shortages, it imports items on government instructions for public distribution.
Spice Trading Corporation Limited is responsible for domestic and international trade of spices. It is also responsible for research in increasing production, storage and improvement in the quality of the spices.
Along with these, we have five Commodity boards responsible for production, development and export of tea, coffee, rubber, spices and tobacco. Along with these bodies, an Indian Trade Promotion Organization (ITPO) has been formed by merging Trade Development Authority and Trade Fair Authority of India.
The main objective of this organization is to promote exports by show casing the Indian produce in international trade fairs, publicity through mass media and organizing contact programmes.
The Commerce Ministry has also reformulated the EXIM policy for years 2002- 2007. The emphasis is on promotion of trade to decrease the balance of payments by enhancing the exports and decreasing the imports. The policy provides a number of incentives for the domestic industry and also removes anomalies in the earlier policies as per the present international trade scenario. The highlights of the EXIM policy arc given under.