Devaluation of Indian Currency . Exchange Control Exchange control means the state intervention in the forex market. It is a popular method employed to influence the balance of payments position of a country. Under exchange control, the government or central bank assumes complete control over the foreign exchange reserves and earning of the country.
The recipients of foreign exchange, like exporters, are required to surrender foreign exchange to the government / central bank in exchange for domestic currency. By virtue of its control over the use of foreign exchange, the government can control imports. Does it happen in India? Too much of imports control would invite more and more smuggled goods.
Smuggling of gold into Indian airports regularly happens, as per the reports in the media. III. Trade Measures Trade measures include measures to promote exports and to reduce imports. .
Export Promotion Exports may be encouraged by i).reducing or abolishing export duties, ii). providing export subsidy, iii).encouraging export production by giving monetary, fiscal, physical and institutional incentives. (Then local people and domestic industries would suffer) . Import Control Imports may be controlled by i).imposing or enhancing import duties, ii).restricting imports through import quotas, iii).licensing and even prohibiting altogether the import of certain non- - - International Economics