Topic Details (Notes format)

Foreign Trade Policy and Export Promotion

Subject: Economics

Book: Comprehensive Indian Economy

India’s foreign trade policies aim at boosting exports while ensuring essential imports (energy, technology) remain affordable. Export incentives range from duty drawbacks and export promotion schemes to special economic zones providing tax breaks. Diversification into non-traditional markets (Latin America, Africa) counters slowdown in major destinations (US, EU). Emerging areas like software services, pharmaceuticals, and engineering goods drive trade surpluses in some segments. Keep track of structural constraints like logistics, high transaction costs, and non-tariff barriers. In exams, highlight policy steps taken to integrate India into global value chains, leveraging trade agreements for better market access.

Practice Questions

Which of the following sectors contributes the most to India’s GDP?

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Which of the following is a feature of a command economy?

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What is the main feature of a free-market economy?

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Which of the following is a direct tax?

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What is “fiscal stimulus”?

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Which of the following is a characteristic of “perfect competition”?

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Which of the following causes demand-pull inflation?

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What is the primary purpose of Special Economic Zones (SEZs)?

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What is the main function of the Reserve Bank of India (RBI)?

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What is “currency devaluation”?

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