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Export and Import Management

Export and Import Management

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Published by: mailonvikas on May 16, 2012
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IIMM/DH/02/2006/8154, Export and Import Management 
1
Q 1. (a) The First & Second Export and Import Policies were announced in 1992 and Mar 1997  respectively. The Second policy is operating currently and applies for all Export & Imports. What are the objectives of Imports & Exports (Control) Act 1947 and Present Second Policy. Answer:-
INTRODUCTION: -Trade policy governs exports from and imports into a country. It is one of the various policy instruments used by acountry to attain her goals of economic develop-ment. This policy is thus, formulated keeping in view, the nationalpriorities for economic development and the international commitments made by the country. It is essential that theentrepreneurs and the export managers understand the trade policy as it provides the vital inputs for the formulation of their business growth strategies. In India, the trade policy Le., export-import policy is formulated by the Ministry of Commerce, Government of India in terms of section 5 of the Foreign Trade (Development and Regulation)Act,1992Besides, the Government of India also announced on January 30,2002 a Medium Term Export strategy, toguide the formulation the Export-Import Policy: 2002 - 07 with the, objective of achieving a share of 1 % in worldtrade by the end of 2006 - 07 from the present I share of 0.6% (2000 - 01). The text of this strategy is given asAppendix VII at the end of the book. The present Export - Import Policy was announced on 31.3.2002 for a period of 5years with effect from 1.4.2002 to 31.3.2007 co-terminus with Tenth Five Year Plan. It covers both the trade inmerchandise and services. The present chapter explains legal framework affecting foreign trade of India particularlywith reference to Export-Import Policy; 2002 - 2007. It also discusses the preferential trading arrangements affectingexports and imports of India.
 MEANING:-
The foreign trade of India is guided by the Export-Import (EXIM) Policy of the government of India arid is regulatedby the Foreign Trade (Development and Regulation) Act, 1992.EXIM Policy contains various policy decisions taken by the government in the sphere of foreign trade, i.e., withrespect to imports and exports from the country and more especially export promotion measures, policies andprocedures related thereto. It is prepared and announced by the Central Government (Ministry of Commerce). India'sEXIM policy, in general, aims at developing export potential, improving export performance, encouraging foreigntrade and creating favourable balance of payments position.
 LEGAL FRAMEWORK FOR FOREIGN TRADE OF INDIA:-
In India, the legal framework for the regulation of foreign trade is mainly provided by the Foreign Trade(Development and Regulation) Act, 1992, Garments Export Entitlement Policy: 2000-2004, Export (Quality Controland Inspection) Act, 1963, Customs and Central Excise Duties Drawback Rules, 1995, Foreign Exchange ManagementAct, 1999 -and the Customs and Central Excise Regulations.The main objective of the Foreign Trade (Development and Regulation) Act is to provide for the development andregulation of foreign trade by facilitating imports into, and augmenting exports from India. This Act has replaced theearlier law namely, the
imports and Exports (Control) Act1947
. A comparison of the nomenclature of the two Actsmakes it very dear that there is a shift in the focus of the law from control to development of foreign trade. This shift inthe focus is the outcome of the emphasis on liberalisation and globalisation as a part of the process of economicreforms initiated in India since June 1991.The application of the provisions of the Foreign Trade (Development & Regulation) Act 1992 has been exempted forcertain trade transactions vide Foreign Trade (Exemption from application of Rules in certain cases) Order 1993GENERAL OBJECTIVES OF THE EXIM POLICY: -
 
IIMM/DH/02/2006/8154, Export and Import Management 
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Government control import of non-essential items through an import policy. At the same time, all-out efforts are madeto promote exports. Thus, there are two aspects of trade policy; the import policy which is concerned with regulationand management of imports and the export policy which is concerned with exports not only promotion but alsoregulation. The main objective of the Government policy is to promote exports to the maximum extent. Exports shouldbe promoted in such a manner that the economy of the country is not affected by unregulated exports of items speciallyneeded within thecountry. Export control is, therefore, exercised in respect of a limited number of items whose supply position demandsthat their exports should be regulated in the larger interests of the country. In other words, the policy Aims at(i) Promoting exports and augmenting foreign exchange earnings; and(ii) Regulating exports wherever it is necessary for the purposes of either avoiding competition among the Indianexporters or ensuring domestic availability of essential items of mass consumption at reasonable prices.The government of India announced sweeping changes in the trade policy during the year 1991. As a result, the newExport-Import policy came into force from April I, 1992. This was an important step towards the economic reforms of India. In order to bring stability and continuity, the policy was made for the duration of 5 years. In this policy importwas liberalised and export promotion measures were strengthened. The steps were also taken to boost the domesticindustrial production. The more aspects of the export-import policy(1992-97) include: introduction of the duty-free Export Promotion Capital Goods (EPCG) scheme, strengthening of theAdvance Licensing System, waiving of the condition on export proceeds realisation, rationalisation of schemes relatedto Export Oriented Units and units in the Export Processing Zones. The thrust area of this policy was to liberaliseimports and boost exports.The need for further liberalisation of imports and promotion of exports was felt and the Government of Indiaannounced the new Export-Import Policy (1997, 2002). This policy has further simplified the procedures and reducedthe interface between exporters and the Director General of foreign Trade (DGFT) by reducing the number of documents required for export by half. Import has been further liberalised and efforts have been made to promoteexports.The new EXIM Policy 1997-2002 aims at consolidating the gains made so far, restructuring the schemes to achievefurther liberalisation and increased transparency in the changed trading environment. It focusses on the strengtheningthe domestic industrial growth and exports and enabling higher level of employment with due recognition of the keyrole played by the SSI sector. It recognises the fact that there is no substitute for growth, which creates jobs andgenerates income. Such trade activities also help in stimulating expansion and diversification of production in thecountry. The policy has focussed on the need to let exporters concentrate on the manufacturing and marketing of theirproducts globally and operate in a hassle free environment. The effort has been made to simplify and streamline theprocedure.The objectives will be achieved through the coordinated efforts of all the departments of the government in general andthe ty1inistry of Commerce and the Directorate General of Foreign Trade and its network of Regional Offices inparticular. Further it will be achieved with a shared vision and commitment and in the, best spirit of facilitation in theterest of export.in" OBJECTIVES OF THE EXIM POLICY 1997 -2002The principal objectives of the EXIM Policy 1997 -2002 are as under:
 
IIMM/DH/02/2006/8154, Export and Import Management 
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a. To accelerate the economy from low level of economic activities to high level of economic activities by making it aglobally oriented vibrant economy and to derive maximum benefits fro~ expanding global market opportunities.b. To stimulate sustained economic growth by providing access to essential raw materials, intermediates, components,'consumables and capital goods required for augmenting production.c. To enhance the technoloca1 strength and efficiency of Indian agriculture, industry and services, thereby, improvingtheir competitiveness.d. To generate new employment. Opportunities and encourage the attainment of internationally accepted standards of quality.e. To provide quality consumer products at reasonable prices.HIGHLIGHTS OF THE EXIM POLICY 1997-2002a. Period of the Policy
April 1997 to.31st March 2002.b. Liberalisation
 
All goods, except those coming under negative list, may be freely imported or exported.c. Imports Liberalisation
remaining 392 items have been transferred to Open General Licence (OGL) List.d. Export Promotion Capital Goods (EPCG) Scheme
 
agricultural and allied! Sectorse. Advance Licence Scheme
 
 f. Duty Entitlement Pass Book (DEPB) Scheme
freely convertible currency.
Such credit can be can be utilised for import of raw materials, intermediates, components, parts, packaging materials,etc. for export purpose.g. Special Import Licence (SIL) :
150 items from the restricted list have been transferred to SIL.
SIL on exports from SSIs has been increased from 1 % to 2%.
Export houses and all forms of trading houses are eligible for additional SIL of 1 % on exports of products from SSIsfrom North Eastern States.
Additional SIL has been declared for exploration of new markets and for export of agro products.
The SIL entitlement of exporters holding ISO 9000 certification has been? Increased from 2% to 5% of the FOBvalue of exports.h. Export Houses and Trading Houses :-The criteria for recognition of export houses and all forms of trading houses has been modified.MOUNT IN RS. CRORES) FOR 2000-01 PERIODB Criterion NFE Criterion

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