Impact of Covid-19 on International Trade and the Government policies to fight with it

International trade is exchange of goods and services between two or more nations. International trade plays the vital role in the economic growth of the country. International trade generates the employment in the country raise the standard of living, provide different kind of goods and services to the consumers. International trade depends on the following factors –

The Ministry of Electronics department launched PLI Scheme which will provide the benefits to electronics companies incentive of 4% to 6% on the incremental sale, this may come in effect from first of august 2020 for 4 months first and will be extended afterwards.

Objective of PLI Scheme:-

To create the environment and to provide the facilities to the electronics and semiconductor devices manufacturer a level playing field to make electronics products cost competitive in the global market by giving financial help.

Government of India launched a Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors under which benefits of 25% on the capital expenditure of notified electronic goods and components are given.

Modified Electronics Manufacturing Clusters Scheme (MEMC) to provide the assistance for creating the better environment for manufacturing, EPCG Scheme allows the import of capital goods at zero customs duty to manufacture the export goods with the condition of export obligation fulfilment, it has two types of export obligation – Specific Export Obligation and Average Export Obligation. Export obligation needs to be achieved in six years by doing the export of six times of the duty saved amount.

Scope in International trade:-

Export-Import:-

Export is selling of goods and services outside the nation and import is buying the goods and services from outside the nation.

Service trade:-

Service export includes the hotel, tourism, transportation, tours and travel, Training and research.

License and franchise:-

Advantages of International trade

• It brings the foreign currency in the country
• It provide the different type of products in another country
• Import-Export distribute the activities among the countries
• It develops the country with development of the organization
• Import-Export improve the standard of living in the country

To help the exporters and importers Indian Government has extended the foreign trade policies for one year and extended the validity period of licenses under MEIS and SEIS Scheme which provide the benefits to the exporters in the form of duty credit scrip or license which can be sold in open market at premium rate.

Advance License issued under Advance Authorisation Scheme to allow duty free import of inputs required to produce the export goods.