The Reserve Bank of India (RBI) is undertaking measures to rationalise the Guidelines for Export and Import of Goods and Services under the Foreign Exchange Management Act (FEMA), 1999, amidst evolving dynamics in international trade.
Announcement by RBI Governor:
Shaktikanta Das, the Governor of RBI, announced plans to issue draft guidelines for public feedback. He highlighted that the proposed changes aim to modernise the existing FEMA guidelines, aligning them with the progressive liberalisation of foreign exchange regulations.
Objectives:
- Promote ease of doing business.
- Provide greater operational flexibility to authorised dealer banks.
Export and Import Statistics:
- India’s exports in FY24 reached a new high of $776.68 billion, slightly exceeding the previous fiscal year’s record of $776.40 billion.
- March saw the highest monthly merchandise exports at $41.68 billion.
- Total goods imports decreased by 5.66% to $675.44 billion in FY24.
Diversification Efforts:
India is actively diversifying its export portfolio beyond traditional sectors like iron ore and agricultural commodities. Efforts are focused on expanding into electronics, pharmaceuticals, engineering products, and food items. The Ministry of Commerce is spearheading initiatives to introduce new export offerings such as alcohol beverages, prepared meals, confectioneries, and value-added products like jackfruit and bananas.
Multiple Choice Questions (MCQs):
- What is the primary objective of RBI’s plan to rationalise FEMA guidelines?
- A) Increase restrictions on foreign exchange transactions
- B) Promote ease of doing business
- C) Limit operational flexibility for authorised dealer banks
- D) Encourage stricter controls on imports
- Which authority plans to issue draft guidelines for public feedback regarding the rationalisation of FEMA guidelines?
- A) Ministry of Commerce and Industry
- B) Government of India
- C) Reserve Bank of India (RBI)
- D) Securities and Exchange Board of India (SEBI)
- In which fiscal year did India record its highest exports?
- A) FY23
- B) FY24
- C) FY22
- D) FY21
- What sectors is India targeting for export diversification?
- A) Iron ore and agricultural commodities
- B) Textiles and automobiles
- C) Electronics, pharmaceuticals, engineering products, and food items
- D) Petroleum and natural gas