EXIM Bank

  • Export–Import Bank of India was established in 1982 under the Export-Import Bank of India Act 1981.
  • Since its inception, Exim Bank of India has been both a catalyst and a key player in the promotion of cross border trade and investment.
  • Over the period, it has evolved into an institution that plays a major role in partnering Indian industries, particularly the Small and Medium Enterprises, in their globalization efforts, through a wide range of products and services offered at all stages of the business cycle, starting from import of technology and export product development to export production, export marketing, pre-shipment and post-shipment and overseas investment.
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Most Favoured Nation (MFN) status

What is Most Favoured Nation’ (MFN) status? 

  • The WTO as the trade-promoting body has certain key principles or philosophical themes for its working.
  • One such principle is non-discrimination which is well scripted in Most Favored Nation (MFN) treatment.
  • The MFN is a status or treatment given by one country to another in trade matters.
  • It means that the recipient country of MFN will nominally get equal trade advantage as the ‘most favoured nation’ by the country granting the treatment.
  • Though the MFN status says the receiving country is the most favoured by the issuing country; the meaning is slightly different.
  • The real meaning is that the receiving country will not be treated disadvantageously by the issuing country in trade matters vis a vis other countries.
  • Under WTO, countries cannot normally discriminate between their trading partners.
  •  If a special favour is granted to a particular country, it should be extended to all other WTO members.
  • In this respect, the MFN is so important that it is the first article of the GATT, which governs trade in goods.
  • The MFN status was accorded to Pakistan by India in 1996 as per India’s commitments as a member of the World Trade Organisation (WTO).
  • Pakistan, a founding member of the WTO like India, is yet to grant the MFN tag to India (and Israel).

Exceptions for MFN: 

  • MFN at the same time allows some exemptions as well.
  • One such exemption is the right to engage in Free Trade Agreements.
  • This means members can participate in regional trade agreements or free trade agreements where there is discrimination between member countries and non member countries.
  • Another exemption is that members can give developing countries special and differential treatment like greater market access.
  • This special concession are in different forms like reduced tariff rates from developing country imports, concessions that allows developing countries to give subsidies to their production sectors etc.
  • All these exceptions are subjected to strict conditions.
  • In general, MFN means that every time a country lowers a trade barrier or opens up a market, it has to do so for the same goods or services from all its trading partners — whether rich or poor, weak or strong.
  • Each member treats all the other members equally as “most-favoured” trading partners.

WTO- Trade Facilitation Agreement (TFA)

Trade Facilitation Agreement (TFA)

  • Trade Facilitation Agreement (TFA) envisages faster clearances and reduction of red tapism at the borders and would thereby help in the ease of doing business.
  • TFA is bound to change the Indian trade and would bring more transparency in trade process.
  • after TFA ratification, the world wide best trade practices would be shared among the member countries.
  • She said while we have made rapid strides in streamlining our processes on the line of International best practices, in several areas, we need to ensure speedy legislation so that there are visible beneficial outcomes through trade facilitation. member countries would seek to simplify trade procedures and help promote cross border trade, bring greater predictability to traders and help improve the overall climate for trade and investment.
  • TFA is supposed to enable domestic manufacturers, particularly Small and Medium Enterprises, connect more easily to regional and Global Value Chains.
  • TFA contains provisions for expediting the movement, release and clearance of goods, including goods in transit. It also sets-out measures for effective cooperation between customs and other appropriate authorities on trade facilitation and customs compliance issues. Smt. Sitharaman said these objectives of TFA are in consonance with India’s ease of doing business initiative.