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

What is the term for the ability of an economy to produce more output from the same inputs?

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What is the significance of “Purchasing Power Parity” (PPP)?

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What is “inclusive growth”?

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

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What is the meaning of “dumping” in international trade?

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Which of the following causes demand-pull inflation?

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What is the term for the price at which demand and supply in a market are equal?

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Which of the following is an example of a public sector undertaking (PSU) in India?

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What is the main objective of disinvestment in public sector undertakings (PSUs)?

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

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