Which one of the following measures is Not likely to aid in improving India’s balance of payment position?

The correct answer is Levying the higher duty on exports.

Understanding Balance of Payments (BoP):
The Balance of Payments (BoP) is a systematic record of all economic transactions between residents of a country and the rest of the world over a specific period. Improving the BoP position generally means increasing foreign exchange inflows (through higher exports or foreign investments) or decreasing foreign exchange outflows (by reducing imports).

Analysis of Options:

1. Promotion of import substitution policy:
Import substitution encourages domestic production of goods that were previously imported. This reduces the country's reliance on imports, decreases foreign exchange outflows, and improves the BoP position.

2. Devaluation of rupee:
Devaluing the national currency makes domestic goods cheaper for foreign buyers (boosting exports) and makes foreign goods more expensive for domestic consumers (discouraging imports). Both effects help increase foreign exchange reserves and improve the BoP position.

3. Imposition of higher tariff on imports:
Levying higher tariffs makes imported goods costlier in the domestic market, leading to a decline in overall imports. Reduced spending on foreign goods saves foreign currency, thereby improving the BoP position.

4. Levying the higher duty on exports:
Imposing higher export duties increases the price of domestic goods in international markets. This makes exports less competitive globally, leading to a drop in export volumes and reduced foreign exchange earnings. Consequently, this measure worsens rather than improves India’s Balance of Payments position.