EXIM Policy: The Pre- Reform Period

Import Policy

The import policy of India in pre - reform period has two constituents:- Import Restrictions and Import substitution. Import policy in pre reform period incorporates discussion on :-• Import restriction• Import substitution• Import liberalization in 1980s

1) Import restrictions- Under Mahalanobis strategy of development, the Govt. had to import machinery, industrial raw materials.• As against this, the export earnings remain stagnant. Thus,

the govt. had to curtail the import expenditure. These restrictions took the form of quantitative restrictions (QRs). Imports were classified under banned items,resticted items and under Open General Licence (OGL).

2) Import Substitution- It has three phases:a) It took the form of domestic production of consumer

goods.b) Emphasis shifted to replacement of import of capital

goods.c) Emphasis was on reducing the dependence on imported

technology.

3) Import liberalization in 1980s- Its broad detail measures are outlined below-• Policy for import of capital goods• Policy for import of raw materials• Policy for import of technology Export Policy: The Pre- Reform PeriodThe three Phases of Export Policy-• Phase I- It is divided into two sub - periods:-a) 1952-

1966 and b) 1966- 1973.• Phase II -The government undertook a number of

steps to increase exports.• Phase III - It emphasized technological upgradation.

Export Promotion Policies• Cash Compensatory Support- It is not cash support

rather it is a scheme introduced by Govt. to provide cash assistance to exporters.

• Assistance to EPCs- Assistance was granted in form of grant- in – aids to Export Promotion Councils to undertake a) Market research , b) participation in exhibitions ,c) Trade delegations.

Shortcomings of Export Policy in Pre- Reform Period• Trading Problems• Production Problems