Girisha Meena, Gujarat National Law University
Anamika Chhabra, FIMT, IP University
Savi Phutela, Guru Nanak Dev University, Amritsar
EDITED BY: Smaraki Nayak ,Amity Law School, Noida
According to the Cambridge dictionary, Trade is known as “the activity of buying and selling, or exchanging, goods and/or services between countries and people.” The most vital component of trade is, without money or some other consideration we cannot trade.
There are 2 types of trade - Home or domestic trade and foreign trade. Domestic trade include wholesale trade and retail trade. Foreign trade includes imports, exports, and entrepot trade. Trade law works upon the bilateral trade contracts and agreements which consist regional trade agreement or multinational trade agreements. Each one of these have their own procedures of policy, history and dispute settlement authorities.
DOMESTIC TRADE POLICY
India has a lot of challenges in the matter of trade policy - the worldwide monetary economic slowdown, expanding protectionism, the slowed down super economic accords that could in time be restored, and maybe progressively significant, and its own domestic distractions. For India to accomplish its strategy goals, the legislature and industry, especially the assembling part, must get ready for circumstances and more prominent commitment in an advancing multilateral exchange field. India's needs ought to incorporate taking measures to adjust to worldwide guidelines and supporting the World Trade Organization (WTO) to relaunch multilateral exchange. In a research, it was concluded that India needs a very bold and imaginative trade policy with the wide range consultations with WTO. India’s current trade policy strengthens make in India initiative. Its Foreign Trade Policy (FTP) provides the basic framework and strategy for promoting exports and trade. It is periodically reviewed to adapt to the changing domestic and international scenario. Current trade policy aims to increase the country’s share of trade from 2.1 % to 3.5% and to increase the exports.
INDIAN TRADE STATISTICS
Merchandise: April-May 2020-21 as per the latest report are as follows-:
Exports: USD 29.41 billion Exports USD 61.57 billion (-33.66%)
Imports: USD Imports USD 57.19 billion (-48.31%)
Trade Surplus: USD 4.37 billion
TRADE AGREEMENTS AND NEGOTIATIONS
India has several trade agreements which are “MoU with Argentina, MoU with Colombia, Agreement of Cooperation with Nepal to Control Unauthorized Trade, Agreement on Economic Cooperation between India and Finland, Agreement on SAARC Preferential, Trading Arrangement (SAPTA) Agreement on South Asia Free Trade Area SAFTA, Asia Pacific Trade Agreement APTA and many more.”
FTA are very helpful in increasing the trade and investment opportunities. India is one of the top 10 nations with maximum FTP agreements. By virtue of the Asian Development Bank Report, India has 42 trade agreements including the under negotiation ones. After the trades are operational in India, there is a massive increase in trade. ASEAN is one of the major trading concern. There are around 20 proposed negotiations.
VARIOUS TRADE LAWS:
· Customs Act, 1962
Section 11 of the act - Power to ban the importation or export of goods.
(1) Where the Central Government is satisfied that it is appropriate to do so for any of the purposes stated in clause (2), it may prohibit, by notification in the Official Gazette, the importation or exporting goods of any type specified, whether absolute or subject to such conditions (to be satisfied before or after clearance) as may be defined in the notification; The Foreign Exchange Management Act , 1999 (FEMA) is a law of the Parliament of India to reform and amend the foreign exchange law with the intention of facilitating international trade and payments and encouraging orderly transactions (pawansharma ca, 2020)
· The Foreign Exchange Management Act (FEMA)
It was an act that was enacted in Parliament's winter session in 1999, replacing the Foreign Exchange Regulation Act. This act aims to render criminal crimes relevant to foreign exchange offences. It applies to all of India.
· The GST Act is introduced in India on 01-07-2017 and for our country, it is new act. Section 11 of the CGST Act authorizes the Government to grant exemptions in the public interest on the advice of the GST Council.
Any limitation on the free flow of trade is an obstacle to commerce. Trade barriers may be either tariff barriers (the levy of ordinary customs duties agreed in compliance with Article II of the GATT) or non-tariff barriers which are barriers to trade other than tariff barriers.
Import Licensing India upholds a non-tariff regulation on three product categories: expressly forbidden or prohibited items.
Countervailing and Anti-dumping controls India has been introducing these from time to time in order to shield domestic producers from dumping. In several cases, India's enforcement of its anti-dumping policy created questions about transparency and due process.
Export subsidies and domestic assistance
India has many export subsidy schemes, including tax exemptions for certain export-oriented firms and for exporters in Special Economic Zones.
State's Power to Control Trade and Exchange
Article 304(a) allows the State to impose any tax on goods imported from another State where similar products in that State are subject to similar taxation in order to differentiate between products so imported and goods produced or manufactured in that nation. In Madhya Pradesh vs. Bhailal Bhai State of law levied sales tax on imported tobacco but was not subject to such sales tax at the local level. The Court repealed the tax as discriminatory. Clause (2) of this Article authorizes the State to enforce such fair restrictions on the freedom of travel, trade and exchange as may be necessary for the public interest. And an amendment can be adopted in the Legislature of State for that reason without the President's previous approval. Under Article 304(b), a law passed by a State to control inter-state exchange and exchange shall meet the following time conditions
The President’s previous affirmation must be obtained;
(ii) The law shall be in the interest of the public and
(iii) Restrictions imposed by such legislation shall be fair. (Faisal, 2018)
According to Trade Promotion council of India, 70% Indian startups are impacted by COVID 19. The survey on the ‘Impact of COVID-19 on Indian Start-ups’ reveals that the country’s start-ups are reeling under pressure due to COVID-19 impact. 70% of the 250 start-ups surveyed reported that their business has been impacted, with 12% of them shutting down and 60% of them operating with disruptions. The survey commissioned by FICCI jointly with the Indian Angel Network discloses that only 22% of the start-ups have cash reserves to meet fixed cost expenses of their companies over the next 3-6 months. The findings show that 68 per cent of the start-ups are majorly cutting down their operational and administrative expenses. Close to 30 per cent of the companies stated that they will lay off employees if the lockdown was extended too long. It added that 43% of start-ups have already started salary cuts in the range of 20-40% over the period of April-June 2020. 33% start-ups said investors have put investment decision on hold and 10% stated that deals have been called off; while only 8% start-ups received funds as per deals signed pre-Covid. Consequently, these cash-starved start-ups have decided to put on the back burner their business development, manufacturing activities and has resulted in loss of projected orders.
APRIL 29, 2020: Government amends the extant FDI policy for curbing opportunistic takeover/acquisitions of Indian companies due to current COVID-19 pandemic.
MAY 22, 2020: Address made by the RBI governor, Mohit Singla Chairman TPCI said, “The financially stressed exporters will benefit from unforeseen circumstances beyond control, on account of importers inability to pay within 6 months and thus causing offence in India. Therefore, increasing the time of outward remittance from 6 months to 12 months, will surely help as they will have the longer payment time.”
MAY 31, 2020: Commerce and Industry minister Shri Piyush Goyal calls upon the Indian Missions abroad to play an important role in making India a preferred destination.
TOWARDS A SELF-RELIANT INDIA
Several important reforms have already been enacted. A massive cut in corporate taxes making India one of the most competitive economy in the world, big disinvestment announcements, labour Code Reforms, Public sector banks consolidation and continued success of insolvency and Bankruptcy code are just path- breaking reforms undertaken by government since 2019.
A Rs. 20 lakh Crore Economic Stimulus package has been announced and gives a clarion call for AATMANIRBHAR BHARAT, SELF RELIANT INDIA.
· Stressed on 5 pillars – Economy. Infrastructure, System/Based on Modern Technology, Vibrant Demography and Demand. Land, Labour, Liquidity and Laws.
· Big boost to Small Industry and Business-Rs 5.94 Lakh Crore Stimulus- MSME’S, NBFC’S expanded, EPF contribution reduced.
· Bringing neighbours together.
· Extraordinary International Summits.
· Global Tenders disallowed up to Rs 200 Crore.
Increase FDI - Cutting Red Tape
TRADE, CAMBRIDGE DICTIONARY (JULY 6, 2020, 10:04 P.M), https://dictionary.cambridge.org/dictionary/english/trade.  INDIA’S TRADE OVERVIEW, TRADE PPOMOTION COUNCIL OF INDIA (JULY.06, 2020, 10:05 P.M), https://www.tpci.in/research_report/indias-foreign-trade-policy/.  TRADE AGREEMENTS, MINISTERY OF COMMERCE AND INDUSTRY (JULY.06, 2020, 10:06P.M).https://commerce.gov.in/InnerContent.aspx?Type=InternationalTrademenu&Id=32.  Pawan Sharma ca, Power to grant exemption from tax, TAX GURU (09 Jun 2020), https://taxguru.in/goods-and-service-tax/section-11-cgst-act-power-grant-exemption-tax.html  Faisal, Freedom of Trade and Commerce, LEGAL SERVICES INDIA (2018), http://www.legalservicesindia.com/article/148/Freedom-of-Trade-&-Commerce.html.  Study, 70% Indian start-ups impacted by COVID-19 (July 07, 2020), GOVERNMENT OF INDIA, https://www.tpci.in/  Report, Press Releases (Apr & May 2020), GOVERNMENT OF INDIA, https://commerce.gov.in/Index.aspx