A PROJECT ON EXIM POLICY
A MINI PROJECT REPORT
SCHOOL OF MANAGEMENT SRM UNIVERSITY
UNDER THE GUIDANCE
MR. YASEEN MASSOD FACULTY ± SCHOOL OF MANAGEMENT
I would like to express my gratitude and offer my sincere thanks to all the persons who have made the completion of this project or study paper possible.
I would like to give special thanks to our subject faculty Mr.YASEEN MASSOD. and our class incharge who patiently guided us throughout the project.
Last but not least,our group member which help in completion of the project is of crucial important.
We thanks to all.
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Introduction General Objectives of Exim Policy Objectives Of EXIM policy (2008 ²09) Strategy Main Annual Supplement Highlights Some Other Highlights of The EXIM Policy Implications of The Foreign Trade Negative List of Exports FOREIGN TRADE POLICY 2009-14 Market and Product Diversification Economic Growth in terms of diff. sector Conclusion Recommondationss
1. Introduction :
For India to become a major player in world trade, an all encompassing, comprehensive view needs to be taken for the overall development of the country¶s foreign trade. While increase in exports is of vital importance, we have also to facilitate those imports which are required to stimulate o ur economy. Coherence and consistency among trade and other economic policies is important for maximizing the contribution of such policies to development. Thus, while incorporating the existing practice of enunciating an annual Exim Policy, it is necessary to go much beyond and take an integrated approach to the developmental requirements of India¶s Foreign trade. The Government of India, Ministry of Commerce and Industry announces Export Import Policy after every five years. EXIM policy, in general, aims at developing export potential, improving export performance, encouraging foreign trade and creating favorable balance of payments position. The current Exim Policy covers the period 2004-2009. The Export Import Policy (EXIM Policy) is updated every year on the 31st of March and the modifications, improvements and new schemes becomes effective from 1st April of every year.
2. General Objectives of Exim Policy :
1. To establish the framework for globalization. 2. To promote the productivity competitiveness of Indian Industry. 3. To Encourage the attainment of high and internationally accepted standards of quality. 4. To augment export by facilitating access to raw material,intermediate, components, consumables and capital goods from the international market. 5. To promote internationally competitive import substitution and self -reliance..
3. Objectives Of EXIM policy ( 2008 ± 2009) :
Trade is not an end in itself, but a means to economic growth and national development. The primary purpose is not the mere earnin g of foreign exchange, but the stimulation of greater economic activity. The Foreign Trade Policy is rooted in this belief and built around two major objectives. These are: 1. To double our percentage share of global merchandise trade within the next five years; and 2. To act as an effective instrument of economic growth by giving a thrust to employment generation.
4. Strategy : These objectives are proposed to be achieved by adopting, among others, the following strategies:
1. Unshackling of controls and creating an atmosphere of trust and transparency to unleash the innate entrepreneurship of our businessmen, industrialists and traders 2. Simplifying procedures and bringing down transaction costs. 3. Neutralizing incidence of all levies and duties o n inputs used in export products, based on the fundamental principle that duties and levies should not be exported .4. Facilitating development of India as a global hub for manufacturing, trading and services. 5. Identifying and nurturing special focus a reas which would generate additional employment opportunities, particularly in semi -urban and rural areas, and developing a series of µInitiatives¶ for each of these . 6. Facilitating technological and infrastructural up gradation of all the sectors of the Indian economy, especially through import of capital goods and equipment, thereby increasing value addition and productivity, while attaining internationally accepted standards of quality . 7. Avoiding inverted duty structures and ensuring that our domestic sectors are not disadvantaged in the Free Trade Agreements/Regional Trade Agreements/Preferential Trade Agreements that we enter into in order to enhance our exports . 8. Upgrading our infrastructural network, both physical and virtual, related to the entire Foreign Trade chain, to international standards. 9. Revitalizing the Board of Trade by redefining its role, giving it due recognition and inducting experts on Trade Policy. 10. Activating our Embassies as key players in our export strategy an d linking our Commercial Wings abroad through an electronic platform for real time trade intelligence and enquiry dissemination.
5. Main Annual Supplement Highlights (2008 ± 09) : 1. DEPB scheme has been extended till May 2009. 2. Refund of service tax on almost all the services. 7s 3. Income tax benefit to 100% EOUs has been extended by Government. 4. Coverage of FMS has been increased and additional 10 countries have been s included. These are Mongolia, Bosnia -Herzegovina, Albania, Macedonia, Croatia, Honduras, Djibouti, Sudan, Ghana and Colombia. 5. Split-up facility under DFIA Scheme introduced. 6. Duty free import of samples has been increased from Rs.75, 000 to Rs.1,00,000. 7. Value of jeweler parcels, through Foreign Post Office is raised to US$ 75,000. Earlier it was from US$ 50,000. 8. EOUs shall be allowed to pay excise duty on monthly basis, instead of the present system of paying duty on consignment basis. 9. Customs duty payable under EPCG Scheme has been reduced from 5% to 3%. 6. Some Other Highlights of The EXIM Policy : 1. Inter State Trade Council : To engage the State Government inproviding an enabling environment for boosting international trade, by setting up an Inter State Trade Council.
2. Removal of Export Cess : Proposed to abolish cess on export of all agricultural and plantation commodities levied under various commodity Board Acts. 3. Export Promotion Capital Goods Scheme (EPCG) : This scheme is extended to Agricultural sector, SSI sector, Retail Sectors in order to promote exports from them. 4. Service Export : To upgrade infrastructure in the service related companies . 5. Agri Export : Benefits under µVishesh Krishi Upaj Yojana¶ have been extended to exports of poultry and dairy products in addition to export of flowers , fruits, vegetables and their value added products. 6. Package for Marine Sector : Duty free import of specified specialized chemicals and flavoring oils as per a defined list shall be allowed to the extent of 1% of FOB value of preceding financial years export.
7. Advance Licensing Scheme : The Scope of Advance License for annual requirement has been extended to all categories of exporters having past export performance. 8. Duty Free Replenishment Certificate : Brass scrap, Additives, paper board, and dye stuff have been removed from the list of items prescribed for import under DFRC. 9. Procedural Simplification : Proposed to simplify procedures and reduce the documentation requirements so as to reduce the transaction cost of the exporters and thereby increase their competitiveness 10. EDI Initiatives : DGFT shall introduce an automated electronic system for filing, retrieval and authentication of documents based on agreed protocols and message exchange with other authorities such including Customs and banks.
7. Implications of The Foreign Trade (2004-09): 1. Implications on Indian Economy: This policy propose to simplify procedures and develop technology and infrastructure.
2. Implications on Agriculture : ± Special Agricultural Produce Scheme has been introduced for promoting the export of fruits, vegetables, flowers, and their value added products. ± 3. Implications on Handlooms and Handicraft: ± Establishment of Handicraft SEZ and Handicraft Export Promotion Council would promote development of Handloom and Handicraft Industry ± 4. Implications on Gem and Jewellery Sector : ± This is special thrust area in this policy. Duty free imports of other inputs would give a further boostto this sector ± 5. Implications on Leather and Footwear Industry : ± Duty free import as a specified percentage of exports. Exemption on customs duty on equipment for effluent treatment plants would help promoting export form this sector. ± 6. Implications on Service Industry : An exclusive service promotion council has been set up in order to map the opportunities for key services in key market.
8. Negative List of Exports :
The negative list consists of goods, the import or export of which is ether prohibited, restricted through licensing or otherwise to be canalized t hrough a designate government agency . The negative list of exports, as per the EXIM Policy 1. Prohibited Items : Which items completely banned from the exports. All forms of wild animals including their parts and products. Special Chemicals as notified by the DGFT. Exotic birds as notified by the DGFT. Beef. Sea Shells, as specified Human Skeleton. Peacock Tail Red sanders wood in any form. 2. Restricted Items :which items allowed for exports under special license issued by the DGFT. Dress materials, ready-made garments, fabrics or textile items with imprints of excerpts or verses of the Holy Quran. Horses ± Kathiawadi, Marwari, and Manipuri breeds. Fresh and frozen silver prom frets of weight less than 300gm. Paddy (Rice in husk). Seaweeds of all types. Chemical Fertilizer all types
FOREIGN TRADE POLICY 2009-14 FOREWORD The UPA Government has assumed office at a challenging time when the entire world is facing an unprecedented economic slow -down. The year 2009 is witnessing one of the most severe global recessions in the post -war period. Countries across the world have been affected in varying degrees and all major economic indicators of industrial production, trade, capital flows, unemployment, per capita investment and consumption have taken a hit. The WTO estimates project a grim forecast that global trade is likely to decline by 9% in volume terms and the IMF estimates project a decline of over 11%. The recessionary trend has huge social implica tions. The World Bank estimate suggests that 53 million more people would fall into the poverty net this year and over a billion people would go chronically hungry. Though India has not been affected to the same extent as other economies of the world, yet our exports have suffered a decline in the last 10 months due to a contraction in demand in the traditional markets of our exports. The protectionist measures being adopted by some of these countries have aggravated the problem. After four clear quarters o f recession there is some sign of a turnaround and the emergence of µgreen shoots¶, though I would be hesitant to hazard a guess on the nature and extent of this recovery and the time the major economies will take to return to their pre-recession growth levels. Announcing a Foreign Trade Policy in this economic climate is indeed a daunting task. We cannot remain oblivious to declining demand in the developed world and we need to set in motion strategies and policy measures which will catalyse the growth of exports.Before defining the objectives of the new policy it would be useful to take stock of our achievements in the foreign tradeover the last 5 years. The foreign trade policy announced by the UPA Government in 2004 had set two objectives, namely, (i) to double our percentage share of global merchandize trade within 5 years and (ii) use trade expansion as an effective instrument of economic growth and employment generation. Looking back, we can say with satisfaction that the UPA Government has delivered on its promise. Agriculture and industry has shown remarkable resilience and dynamism in contributing to a healthy growth in exports. In the last five years our exports witnessed robust growth to reach a level of US$ 168 billion in 2008-09 from US$ 63 billion in 2003-04. Our share of global merchandise trade was 0.83% in 2003; it rose to 1.45% in 2008 as per WTO estimates. Our share of global commercial services export was 1.4% in 2003; it rose to 2.8% in 2008. India¶s total share in goods and services trade was 0.92% in 2003; it increased to 1.64% in 2008. On the employment front, studies have
suggested thatnearly 14 million jobs were created directly or indirectly as a result of augmented exports in the last five years. The short term objective of our polic y is to arrest and reverse the declining trend of exports and to provide additional support especially to those sectors which have been hit badly by recession in the developed world. We would like to set a policy objective of achieving an annual export gro wth of 15% with an annual export target of US$ 200 billion by March 2011. In the remaining three years of this Foreign Trade Policy i.e. upto 2014, the country should be able to come back on the high export growth path of around 25% per annum. By 2014, we expect to double India¶s exports of goods and services. The long term policy objective for the Government is to double India¶s share in global trade by 2020. In order to meet these objectives, the Government would follow a mix of policy measures including fiscal incentives, institutional changes, procedural rationalization, enhanced market access across the world and diversification of export markets. Improvement in infrastructure related to exports; bringing down transaction costs, and providing full refund of all indirect taxes and levies, would be the three pillars, which will support us to achieve this target. Endeavour will be made to see that the Goods and Services Tax rebates all indirect taxes and levies on exports. At this juncture, it is our endeav our to provide adequate confidence to our exporters to maintain their market presence even in a period of stress. A Special thrust needs to be provided to employment intensive sectors which have witnessed job losses in the wake of this recession, especially in the fields of textile, leather, handicrafts, etc. We want to provide a stable policy environment conducive for foreign trade and we have decided to continue with the DEPB Scheme upto December 2010 and income tax benefits under Section 10(A) for IT industry and under Section 10(B) for 100% export oriented units for one additional year till 31st March 2011. Enhanced insurance coverage and exposure for exports through ECGC Schemes has been ensured till 31 st March 2010. We have also taken a view to continue with the interest subvention scheme for this purpose. We need to encourage value addition in our manufactured exports and towards this end, have stipulated a minimum 15% value addition on imported inputs under advance authorization scheme. It is importan t to take an initiative to diversify our export markets and offset the inherent disadvantage for our exporters in emerging markets of Africa, Latin America, Oceania and CIS countries such as credit risks, higher trade costs etc., through appropriate policy instruments. We have endeavored to diversify products and markets through rationalization of incentive schemes including the enhancement of incentive rates which have been based on the perceived long term competitive advantage of India in a particular pro duct group and market. New emerging markets have been given a special focus to
enable competitive exports. This would of course be contingent upon availability of adequate exportable surplus for a particular product. Additional resources have been made ava ilable under the Market Development Assistance Scheme and Market Access Initiative Scheme. Incentive schemes are being rationalized to identify leading products which would catalyze the next phase of export growth. As part of our policy of market expansion , we have signed a Comprehensive Economic Partnership Agreement with South Korea which will give enhanced market access to Indian exports. We have also signed a Trade in Goods Agreement with ASEAN which will come in force from January 01, 2010, and will give enhanced market access to several items of Indian exports. These trade agreements are in line with India¶s Look East Policy. We have also concluded the Mercosur Preferential Trade Agreement. It shall be our endeavour to deepen our trade engagement with other major economic groupings in the world. The Government seeks to promote Brand India through six or more µMade in India¶ shows to be organized across the world every year. In the era of global competitiveness, there is an imperative need for Indian exporters to upgrade their technology and reduce their costs. Accordingly, an important element of the Foreign Trade Policy is to help exporters for technological upgradation. Technological upgradation of exports is sought to be achieved by promoting imports of capital goods for certain sectors under EPCG at zero percent duty. Under the present Foreign Trade Policy, Government recognizes exporters based on their export performance and they are called µstatus holders¶. For technological upgradation of the expor t sector, these status holders will be permitted to import capital goods duty free (through Duty Credit Scrips equivalent to 1% of their FOB value of exports in the previous year), of specified product groups. This will help them to upgrade their technolog y and reduce cost of production. For upgradation of export sector infrastructure, µTowns of Export Excellence¶ and units located therein would be granted additional focused support and incentives. The policy is committed to support the growth of project ex ports. A high level coordination committee is being established in the Department of Commerce to facilitate the export of manufactured goods / project exports creating synergies in the line of credit extended through EXIM Bank for new and emerging markets. This committee would have representation from the Ministry of External Affairs, Department of Economic Affairs, EXIM Bank and the Reserve Bank of India. We would like to encourage production and export of µgreen products¶ through measures such as phased m anufacturing programme for green vehicles, zero duty EPCG scheme and incentives for exports. To enable support to Indian industry and exporters, especially the MSMEs, in availing their rights through trade remedy instruments under the WTO framework, we propose to set up a Directorate of Trade
Remedy Measures. In order to reduce the transaction cost and institutional bottlenecks, the e-trade project would be implemented in a time bound manner to bring all stake holders on a common platform. Additional ports/ locations would be enabled on the Electronic Data Interchange over the next few years. An Inter- Ministerial Committee has been established to serve as a single window mechanism for resolution of trade related grievances. These are difficult times and we have set an ambitious goal for ourselves. I am sure that the industry and the Government, working in tandem, will be able to ensure that the Indian exports become globally competitive and that we are able to achieve the target, which we have set for ourselves. (Anand Sharma) Minister of Commerce & Industry Government of India New Delhi August 27, 2009
HIGHLIGHTS OF FOREIGN TRADE POLICY 2009-2014 Higher Support for Market and Product Diversification 1. Incentive schemes under Chapter 3 have been expanded by way of addition of new products and markets. 2. 26 new markets have been added under Focus Market Scheme. These include 16 new markets in Latin America and 10 in Asia -Oceania. 3. The incentive available under Focus Market Scheme(FMS) has been raised from 2.5% to 3%. 4. The incentive available under Focus Product Scheme(FPS) has been raised from 1.25% to 2%. 5. A large number of products from various sectors havebeen included for benefits under FPS. These include, Engineering products (agricultural machinery, parts of trailers, sewing machines, hand tools, garden tools, musical instruments, clocks and watches, railway locomotives etc.), Plastic (value added products), Jute and Sisal products, Technical Textiles, Green Technology products (wind mills, wind tu rbines, electric operated vehicles etc.), Project goods, vegetable textiles andcertain Electronic items. 6. Market Linked Focus Product Scheme (MLFPS) hasbeen greatly expanded by inclusion of products classified under as many as 153 ITC(HS) Codes at 4 digit level. Some major products include; Pharmaceuticals, Synthetic textile fabrics, value added rubber products, value added plastic goods, textile madeups, knitted and crocheted fabrics, glass products, certain iron and steel products and certain articles of aluminium among others. Benefits to these products will be provided, if exports are made to
13 identified markets (Algeria, Egypt, Kenya, Nigeria,South Africa, Tanzania, Brazil, Mexico, Ukraine, Vietnam, Cambodia, Australia and New Zealand). 7. MLFPS benefits also extended for export to additional new markets for certain products. These products include auto components, motor cars, bicycle and its parts, and apparels among others. 8. A common simplified application form has been introduced for taking benefits under FPS, FMS, MLFPS and VKGUY. 9. Higher allocation for Market Development Assistance (MDA) and Market Access Initiative (MAI) schemes is being provided. Technological Upgradation 10. To aid technological upgradation of our export sector, EPCG Schem e at Zero Duty has been introduced. This Scheme will be available for engineering & electronic products, basic chemicals & pharmaceuticals, apparels & textiles, plastics, handicrafts, chemicals & allied products and leather & leather products (subject to exclusions of current beneficiaries under Technological Upgradation 10 Fund Schemes (TUFS), administered by Ministry of Textiles and beneficiaries of Status Holder Incentive Scheme in that particular year). The scheme shall be in operation till 31.3.2011. 11. Jaipur, Srinagar and Anantnag have been recognised as µTowns of Export Excellence¶ for handicrafts; Kanpur, Dewas and Ambur have been recognised as µTowns of Export Excellence¶ for leather products; and Malihabad for horticultural products. EPCG Scheme Relaxations 12. To increase the life of existing plant and machinery, export obligation on import of spares, moulds etc. Under EPCG Scheme has been reduced to 50% of the normal specific export obligation. 13. Taking into account the decline in exports, the facility of Re-fixation of Annual Average Export Obligation for a particular financial year in which there is decline in exports from the country, has been extended for the 5 year Policy period 2009-14. Support for Green products and products from North East 14. Focus Product Scheme benefit extended for export of µgreen products¶; and for exports of some products originating from the North East. Status Holders 15. To accelerate exports and encourage technological 11 upgradation, additional Duty Credit Scrips shall be given to Status Holders @ 1% of the FOB value of past exports. The duty credit scrips can be used for procurement of capital goods with Actual User condition. This facility shall be available for sectors of leather (excluding finished leather) , textiles and jute, handicrafts, engineering (excluding Iron & steel & non -ferrous metals in primary and intermediate form, automobiles & two wheelers, nuclear reactors & parts, and
ships, boats and floating structures), plastics and basic chemicals (excl uding pharma products) [subject to exclusions of current beneficiaries under Technological Upgradation Fund Schemes (TUFS)]. This facility shall be available upto 31.3.2011. 16. Transferability for the Duty Credit scrips being issued to Status Holders under paragraph 3.8.6 of FTP under VKGUY Scheme has been permitted. This is subject to the condition that transfer would be only to Status Holders and Scrips would be utilized for the procurement of Cold Chain equipment(s) only. Stability/ continuity of the Foreign Trade Policy 17. To impart stability to the Policy regime, Duty Entitlement Passbook (DEPB) Scheme is extended beyond 31 -12- 2009 till 31.12.2010. 18. Interest subvention of 2% for pre-shipment credit for 7 specified sectors has been extended till 31.3.2010 in the Budget 2009-10. 19. Income Tax exemption to 100% EOUs and to STPI units under Section 10B and 10A of Income Tax Act, has been 12 extended for the financial year 2010 11 in the Budget2009-10. 20 The adjustment assistance scheme initiated in D ecember,2008 to provide enhanced ECGC cover at 95%, to the adversely affected sectors, is continued till March, 2010. Marine sector 21. Fisheries have been included in the sectors which are exempted from maintenance of average EO under EPCG Scheme, subject to the condition that Fishing Trawlers, boats, ships and other similar items shall not be allowed to be imported under this provision. This would provide a fillip to the marine sector which has been affected by the present downturn in exports. 22. Additional flexibility under Target Plus Scheme (TPS) / Duty Free Certificate of Entitlement (DFCE) Scheme for Status Holders has been given to Marine sector. Gems & Jewellery Sector 23. To neutralize duty incidence on gold Jewellery exports, it has now been decided to allow Duty Drawback on such exports. 24. In an endeavour to make India a diamond international trading hub, it is planned to establish ³Diamond Bourse (s)´. 25. A new facility to allow import on consignment basis of cut & polished diamonds for the purpose of grading/ certification purposes has been introduced. 26. To promote export of Gems & Jewellery products, the 13 value limits of personal carriage have been increased from US$ 2 million to US$ 5 million in case of participation in overseas exhibit ions. The limit in case of personal carriage, as samples, for export promotion tours, has also been increased from US$ 0.1 million to US$ 1 million.
SAgriculture Sector 27. To reduce transaction and handling costs, a single window system to facilitate export of perishable agricultural produce has been introduced. The system will involve creation of multi -functional nodal agencies to be accredited by APEDA. Leather Sector 28. Leather sector shall be allowed re -export of unsold imported raw hides and skins and semi finished leather from public bonded ware houses, subject to payment of 50% of the applicable export duty. 29. Enhancement of FPS rate to 2%, would also significantly benefit the leather sector. Tea 30. Minimum value addition under advance authoris ation scheme for export of tea has been reduced from the existing 100% to 50%. 31. DTA sale limit of instant tea by EOU units has been increased from the existing 30% to 50%. 32. Export of tea has been covered under VKGUY Scheme benefits. 14 Pharmaceutical Sector 33. Export Obligation Period for advance authorizations issued with 6 -APA as input has been increased from the existing 6 months to 36 months, as is available for other products. 34. Pharma sector extensively covered under MLFPS for countries in Af rica and Latin America; some countries in Oceania and Far East. Handloom Sector 35. To simplify claims under FPS, requirement of µHandloom Mark¶ for availing benefits under FPS has been removed. EOUs 36. EOUs have been allowed to sell products manufactured by them in DTA upto a limit of 90% instead of existing 75%, without changing the criteria of µsimilar goods¶, within the overall entitlement of 50% for DTA sale. 37. To provide clarity to the customs field formations, DOR shall issue a clarification to enable procurement of spares beyond 5% by granite sector EOUs. 38. EOUs will now be allowed to procure finished goods for consolidation along with their manufactured goods, subject to certain safeguards. 39. During this period of downturn, Board of Approvals (BOA) to consider, extension of block period by one year for calculation of Net Foreign Exchange earning of EOUs.15 40. EOUs will now be allowed CENVAT Credit facility for the component of SAD and Education Cess on DTA sale. Thrust to Value Added Manufacturing
41. To encourage Value Added Manufactured export, a minimum 15% value addition on imported inputs under Advance Authorization Scheme has now been prescribed. 42. Coverage of Project Exports and a large number of manufactured goods under FPS and MLFPS. DEPB 43. DEPB rate shall also include factoring of custom duty component on fuel where fuel is allowed as a consumable in Standard Input -Output Norms. Flexibility provided to exporters 44. Payment of customs duty for Export Obligation (EO) shortfall und er Advance Authorisation / DFIA / EPCG Authorisation has been allowed by way of debit of Duty Credit scrips. Earlier the payment was allowed in cash only. 45. Import of restricted items, as replenishment, shall now be allowed against transferred DFIAs, in line with the erstwhile DFRC scheme. 46. Time limit of 60 days for re-import of exported gems and jewellery items, for participation in exhibitions has beenextended to 90 days in case of USA. 16 47. Transit loss claims received from private approved insura nce companies in India will now be allowed for the purpose of EO fulfillment under Export Promotion schemes. At present, the facility has been limited to public sector general insurance companies only. Waiver of Incentives Recovery, On RBI Specific Write o ff 48. In cases, where RBI specifically writes off the export proceeds realization, the incentives under the FTP shall now not be recovered from the exporters subject to certain conditions. Simplification of Procedures 49. To facilitate duty free import of samples by exporters, number of samples/pieces has been increased from the existing 15 to 50. Customs clearance of such samples shall be based on declarations given by the importers with regard to the limit of value and quantity of samples. 50. To allow exemption for up to two stages from payment of excise duty in lieu of refund, in case of supply to an advance authorisation holder (against invalidation letter) by the domestic intermediate manufacturer. It would allow exemption for supplies made to a manu facturer, if such manufacturer in turn supplies the products to an ultimate exporter. At present, exemption is allowed upto one stage only. 51. Greater flexibility has been permitted to allow conversion of Shipping Bills from one Export Promotion scheme to other scheme. Customs shall now permit this conversion within three months, instead of the present limited periodof only one month.
52. To reduce transaction costs, dispatch of imported goods directly from the Port to the site has been allowed under Adva nce Authorisation scheme for deemed supplies. At present, the duty free imported goods could be taken only to the manufacturing unit of the authorisation holder or its supporting manufacturer. 53. Disposal of manufacturing wastes / scrap will now be allowe d after payment of applicable excise duty, even before fulfillment of export obligation under Advance Authorisation and EPCG Scheme. 54. Regional Authorities have now been authorised to issue licences for import of sports weapons by µrenowned shooters¶, on the basis of NOC from the Ministry of Sports & Youth Affairs. Now there will be no need to approach DGFT(Hqrs.) in such cases. 55. The procedure for issue of Free Sale Certificate has been simplified and the validity of the Certificate has been increased from 1 year to 2 years. This will solve the problems faced by the medical devices industry. 56. Automobile industry, having their own R&D establishment, would be allowed free import of reference fuels (petrol and diesel), upto a maximum of 5 KL per annum, which are not manufactured in India. 57. Acceding to the demand of trade & industry, the application and redemption forms under EPCG scheme have been simplified. Reduction of Transaction Costs 58. No fee shall now be charged for grant of incentives under t he Schemes in Chapter 3 of FTP. Further, for all other Authorisations/ licence applications, maximum applicable fee is being reduced to Rs. 100,000 from the existing Rs 1,50,000 (for manual applications) and Rs. 50,000 from the existing Rs.75,000 (for EDI applications). 59. To further EDI initiatives, Export Promotion Councils/ Commodity Boards have been advised to issue RCMC through a web based online system. It is expected that issuance of RCMC would become EDI enabled before the end of 2009. 60. Electronic Message Exchange between Customs and DGFT in respect of incentive schemes under Chapter 3 will become operational by 31.12.2009. This will obviate the need for verification of scrips by Customs facilitating faster clearances. 61. For EDI ports, with effect from December ¶09, double verification of shipping bills by customs for any of the DGFT schemes shall be dispensed with. 62. In cases, where the earlier authorization has been cancelled and a new authorization has been issued in lieu of the earlier au thorization, application fee paid already for the cancelled authorisation will now be adjusted against the application fee for the new authorisation subject to payment of minimum fee of Rs. 200.
63. An Inter Ministerial Committee will be formed to redress/ resolve problems/issues of exporters. 64. An updated compilation of Standard Input Output Norms (SION) and ITC (HS) Classification of Export and ImportItems has been published.
Directorate of Trade Remedy Measures 65. To enable support to Indian industry and exporters, especially the MSMEs, in availing their rights through trade remedy instruments, a Directorate of Trade Remedy Measures shall be set up.
With a view to doubling our percentage share of global trade within 5 years and expanding employment opportunities, especially in semi urban and rural areas, certain special focus initiatives have been identified for the agriculture, handlooms, handicraft, gems & jewellery and leather sectors. Government of India shall make concerted efforts to promote exports in these sectors by specific sectoral strategies that shall be notified from time to time. Further Sectoral Initiatives in other sectors will also be announced from time to time. For the present, the thrust sectors indicated below shall be extended the following facilities:Indian Exim Policy
Home - Export Import Guide - Indian Exim Policy
In every five years, the Ministry of Commerce and Industry, Government of India, announces the Export -Import (EXIM) policy. This is an effort towards the encouragement of foreign trade and creation of a complimentary Balance of Payments. The EXIM policy, updated yearly on 31st of March, is followed from 1st April. Some of the chief highlights of the current policy are: 1. Extension of the DEPB scheme till May, the next year. 2. Service tax will be refunded on maximum services 3. Extending Income tax benefit for EOUs. 4. Extension of FMS coverage and inclusion of ten more countries including Mongolia, Croatia, Ghana, Colombia, Albania, etc.
5. Introduction of split-up facility 6. Payment of excise duty by export oriented units on monthly basis rather than consignment basis. However, the central government reserves the right to amend any of the sections of this policy in public interest. Some of the focus initiatives of the policy are: To have a greater share in the global trade and generate more employment opportunities, a number of focus initiatives that have been identified for various sectors are: Agriculture: Some of the policies that have been introduced are -Vishesh Krishi and Gram Udyog Yojana. Moreover, diverse export promotion schemes have allowed the use of export of certain restricted items. Import of certain pesticides has been approved under the advance authorization schemes for export of agricultural products.
MAI/MDA schemes have granted specific plans for the promotion of export of handloom items. Duty free import on certain items has been conferred which has proved to be beneficiary. These include hand knotted carpets.
Establishment of new handicraft SEZs would enable t he procurement of products from the cottage sector and also help in the finishing for exports. It is also suggested that the import entitlement of machineries, tools, trimmings and equipments will be 5% of the value of FOB for export that was recorded the previous year. Import trimmings, consumables and embellishments are under the authorization of handicraft EPC.
Gems and Jewellery:
The replenishment scheme holds the authority to allow the import of 8K or above gold backed up by an Assay certificate for the specification of weight, alloy content and purity. Several import duties have been revised for jewellery, cut and polished diamonds, marine sector, electronics, leather and footwear, etc.
The major points of Exim Policy India is discussed as hereunder for each and every export sectors and schemes ±
Duty free import facility for service sector having a minimum foreign exchange earning of Rs.10 lakhs. The duty free entitlement shall be 10% of the average foreign exchange earned in the preceding 3 licensing years.
Agro Corporate sector with proven credential will be encouraged to sponsor Agri Export Zone and to provide services such as provision of pre/post harvest treatment and operations, plant protection, processing, pac kaging, storage and related R&D. Status Holders Duty-free import entitlement for status holders having incremental growth of more than 25% in FOB value of exports. It shall be 10% of the incremental growth in exports and can be used f or import of capital goods, office equipment and inputs. Hardware & Software To promote growth of exports in embedded software, hardware duty free import for testing and development purposes allowed. Hardware upto a value of US$ 10,000 shall be allowed to be disposed off. 100% depreciation to be available for 3 years. Gem & Jewelery Sector Diamond & Jewelery Dollar Account for exporters dealing in purchase/ sale of diamonds and diamond studded jewelery. Gem & Jewelery units in SEZ and EOUs can receive precious metal i.e Gold/silver/platinum prior to exports or post exports equivalent to value of jewelery exported. Export Clusters Upgradation of infrastructure in existing clusters/industrial locations under the Department of Industrial Policy & Promotion (DIPP) scheme to increased. Rehabilitation of Sick Units Steps for for revival of sick units and extension of export has been modified.
Removal of Quantitative Restrictions Import of 69 items covering animal products, vegetables and spices, antibiotics and films removed from restricted list. Special Economic Zones Sales from Domestic Tariff Area (DTA) to SEZs to be treated as export. Foreign bound passengers will now be allowed to take goods from SEZs to promote trade, tourism and exports. Export/import of all products through post parcel/courier by SEZ units will now be allowed. SEZ units will now be allowed to sell all products including gems and jewelery through exhibitions and duty free shops or shops set up abroad. EOU of Exim Policy India Agriculture/Horticulture processing EOUs will now be allowed to provide inputs and equipments to contract farmers in DTA. Period of utilization of raw materials prescribed for EOUs increased from 1 year to 3 years. Export/import of all products through post parcel/courier by EOUs will now be allowed. EOUs will now be allowed to sell all products including gems and jewelery through exhibitions and duty free shops or shops set up abroad. EPCG of Exim Policy India Shall allow import of capital goods for pre-production and postproduction facilities also. To facilitate upgradation of existing plant and machinery, import of spares shall also be allowed. To facilitate diversification into the software sector. DEPB of Exim Policy India Facility for provisional DEPB rate introduced to encourage diversification and promote export of new products. DFRC of Exim Policy India Duty Free Replenishment Certificate scheme extended to deemed exports to provide a boost to domestic manufacturer. Value addition under DFRC scheme reduced from 33% to 25%. SAdvance License
Standard Input Output Norms for 403 new products notified in Exim Policy India. Anti-dumping and safeguard duty exemption to advance license for deemed exports for supplies to EOU/SEZ/EHTP/STP.
Transaction Cost Reduction Applications filed online shall have a 50% lower processing fee as compared to manual applications is notified in Exim Policy India.
Other benefits extended by new Exim Policy India are Actual user condition for import of second hand capita l goods upto 10 years old dispensed with. Reduction in penal interest rate from 24% to 15% for all old cases of default under Exim Policy. Export of free of cost goods for export promotion @ 2% of average annual exports in preceding sthree years subject to ceiling of Rs.5 lakh permitted.
INTRODUCTION This Annual Supplement is the second in the series supplementing the Foreign Trade Policy 2004-09. In line with Government¶s promise of a stable Foreign Trade Policy regime, this year¶s supplement (in the same way as last year) does not alter the broad contours of the main Policy. However, recognizing the dynamic nature of international trade and the consequent need for periodic realignment of our international trade strategies, co ntemporary issues have to be addressed from time to time, and this is what this initiative does. The changes in the Annual Supplement resulted from the inputs received through interactive sessions with various Export Promotion Councils, Industry organizati ons, Apex Chambers of Commerce & Industry and sister Departments of Government. The Board of Trade has emerged as an effective institutional mechanism and idea generator for the FTP. A number of useful inputs have been obtained through the Working and Study Group reports and brain storming sessions of the Board of Trade.
2. TRADE PERFORMANCE
When the Government launched the new Foreign Trade Policy in August 2004, it set out with the ambitious objective of doubling India¶s percentage share of global merchandize trade within five years. Merchandize trade in the very first year of the policy period grew at the rate of 26%. This year¶s export figures are unprecedented. I am delighted to share with you that merchandize exports have crossed the µmagic figure¶ of 100 billion dollars. In fact, they have touched the µauspicious figure¶ of 101 billion dollars. The annual growth rate is 25%. Market Information & Data. South Korea Yellow Pages Our imports have grown 32%, and stand at 140 billion dollars ± but 43 billion is our oil bill. Thus, our non-oil imports are 97 billion dollars, a full 4 billion lower than our exports. On the non-oil front, therefore, we have a positive balance of trade.
3. SECTORAL EXPORT GROWTH Exports from many sectors have surpassed our e xpectations. Project goods exports grew at the rate of 173%. Exports of non-ferrous metals, guar gum meal, computer software in physical form, rice, pulses, dairy products, all recorded a growth surpassing 50%. Commodities like man -made staple fibres, cosmetics and toiletries, iron-ore, coffee, processed food and transport equipment grew at the rate above the average, i.e. more than 25% during this period.
4. MARKET SHARE IN DIFFERENT COUNTRIES India is steadily increasing its share in important markets. Growth in exports to UK has been 30%, to Singapore (with which we implemented the CECA)54%. India¶s exports to South Africa grew at 44% while for China the growth rate is 35%. We shall be releasing detailed statistics on all this in the form of a Ready Reckoner next month, after exact figures come in. 5. µFOCUS PRODUCT¶ & µFOCUS MARKET¶ SCHEMES The other chief objective of the Foreign Trade Policy was providing a thrust to employment generation, particularly in semi -urban and rural areas. We are therefore introducing two new schemes to nurture this. We realized that certain industrial products can generate large employment per unit of investment compared to other products, and promoting their export would in turn give a thrust to their manufacture. This realization led to the formulation of the µFocus
Product Scheme¶ which aims to promote such exports. The Scheme allows duty credit facility at 2.5% of the FOB value of exports on fifty percent of the export turnover of notified products, such as valu e added fish and leather products, stationery items, fireworks, sports goods, and handloom & handicraft items. It is also necessary to penetrate markets, especially to which our exports are comparatively low. Some of our competitors are aggressively µoccup ying space¶ in Latin America, in Africa and other destinations which Indian exporters have unfortunately been neglecting, perhaps due to high freight costs & undeveloped networks. But these are the markets of the future, and it is of strategic necessity that we enlarge our market share here. For this we have a µFocus Market Scheme¶ which allows duty credit facility at 2.5% of the FOB value of exports of all products to the notified countries. The scrip and the items imported against it for both these scheme s would be freely transferable. These two Schemes would replace the Target Plus Scheme. To take the benefits of foreign trade further to rural areas, the Vishesh Krishi Upaj Yojana is being expanded to include village industries based products for export benefits, and it is therefore renamed as Vishesh Krishi Upaj aur Gram Udyog Yojana ± a rather long name, but one which adequately reflects its intent and coverage. 6. PROMOTING SERVICES EXPORT While Services account for 52% of our GDP, our total services t rade ± exports & imports ± totals more than 100 billion dollars. Expansion of the Services sector is vital for providing jobs to urban educated youth. In the WTO too we are actively engaged in the Services negotiations. A number of features have been added in the Served from India Scheme to encourage service exports. The Scheme ill now allow transfer of both the scrip and the imported input to the Group Service Company, whereas earlier transfer of imported material only was allowed. 7. INDIA EMERGING AS GEM AND JEWELLERY HUB Because of a rich tradition of craftsmanship, enterprise and availability of skilled, low cost manpower India has the potential to become an international hub for Gems and Jewellery. We have already introduced some measures in the Budget. The diamond trade, which was concentrated in Antwerp, is moving out ± to Dubai, to Tel Aviv. I want Mumbai be right up there, and not lose out to its fellow Asian cities. This Supplement now introduces a number of measures for facilitating export of value added products catering to changing needs of the market and facilitating easier product movement across the borders and allowing import of precious metal scrap for refining. (a) We have large unutilized melting, refining and jewellery -making production capacity. To enable such capacities to be used in a productive manner, import of precious metal scrap and used jewellery will now be allowed
for melting, refining and re -export of jewellery. However, such import will not be allowed through hand baggage. (b) Gems & Jewellery exporters will now be allowed to re-import the rejected precious metal jewellery subject to refund of duty exemption benefits on the inputs only and not the duty on jewellery as was being done earlier. (c) Many a times exporters faced the dilemma of unsold jewellery in the foreign markets because of changing designs and other such factors. To overcome this problem, Gems & Jewellery exporters will now, be allowed to export jewellery on consignment basis. (d) Treatment of cut and polished precious and semi -precious stones enhance the quality and afford higher value in the international market. For this purpose, Gems & Jewellery exporters will now be allowed to export such items for treatment and subsequent re-import, within a period of 120 days. (e) Increase of gold and silver prices in the international market over the past few years has made the present value addition norms on export of gold & silver jewellery unrealistic. The value addition norm for such items is being reduced from 7% to 4.5%. Such measures will help Indian Gems and Jewellery to sparkle on the world stage.
8. AUTO-COMPONENTS India is on the move, metaphorically as well as literally. We not only have the fastest growing automobile market in the world, but India is fast emerging as an important centre for sourcing auto-components. The FTP already extends a number of facilities for the sector. We shall now allow import of new vehicles by auto component manufacturers for R & D purpose s without homologation. This is necessary to give our R&D labs easier access to the latest technologies current in the auto component industry. 9. AVIATION SECTOR Supplies of stores (food, beverages and other supplies) and refueling of long distance flights has emerged as a big business opportunity. Currently, most airlines replenish supplies or refuel at Thailand, Malaysia or Singapore. Since these supplies were not treated as exports in India and the suppliers could not obtain the duty neutralisation benefits available to other export products the store supplies from India were not competitive enough. We have decided to treat such supplies on an equal footing with other exports, qualifying for benefits under various Export Promotion Schemes. This wil l hopefully enable India to offer competitive fuel prices and will attract mid route stops of the international flights.
10. MARINE SECTOR Having done something for the µland¶ and the µair¶, we felt we must do something for the µsea¶ too! We had alrea dy brought in some benefits for shrimp and tuna fishing through the budget. Now the list of specialized inputs used in the marine sector has been expanded to include additional items of chemicals and other additives within the present duty free entitlement of 1%.
Few step for an enterprise to become an export organisation are: 1) REGISTRATION AS A BUSINESS ENTITY:- A new export unit can be started by registering as proprietorship, partnership or imited liability company. 2) IEC NUMBER - Any company wish to export/import need to obtain a Import Export code(IEC) number. IEC is issued by Regional licensing authority of DGFT. For communication with any office in regard to for export and import needs IEC number. 3) RCMC means the certificate of registration and membership granted by an Export Promotion Council/ Commodity Board/ Development Authority or other competent authority as prescribed by Foreign Trade Policy to an exporting unit. Any person, applying for a licence/ auth orisation/certificate/permission to import/ export or any other benefit or concession under Foreign Trade Policy is required to furnish (RCMC). It is also required for executing a bond before Central Excise authorities, which exempts exporters to furnish b ank guarantees. Export Promotion Councils have been set up by various ministries of the Central Government to promote and develop the exports of particular group of products, projects and services. For certain group of products, which are sensitive from the viewpoint of national consumption, there are commodity boards instead. Thus while we have export promotion councils for apparel, leather, software, chemicals, engineering goods etc., India has commodity boards for tea, coffee, jute etc. 4) REGISTRATION WITH SALES TAX OFFICE :-Exported goods from India are exempt from central & state sales tax. However, for getting exemption of such taxes or claming their refund, wherever permissible under Foreign Trade Policy, the exporting unit should be registered w ith sales tax authorities. 5) REGISTRATION WITH EXCISE DEPT.:-If an exporting unit is engaged in manufacturing of products, it needs registration with excise department & formalities remain the same as for any domestic unit. This registration is required for claiming refund of excise duties under various schemes of the govern
As per the rule, Govt. of india,Ministry of Commerce and industry announce EXIM Policy after every five year which updated every year on 31 st March and become effective from 1st april of every year. In respect of that,when the previous foreign trade policy made with to achieve the certain objective as developing exports potential, promoting FDI, improving foreign trade and export performance and creating favourable BOP.,which moreover achieved in recent time. All the sector enjoyed t he policy in terms of growth and market expansion. So, now in this year i.e 2009-2014,a new foreign trade policy have amended with the objective of doubling india¶s percentage share of global of merchandize trade within years along with previous at all. So, for that so many diversification have done or implementing the new one for diff. secto r viz. marine sector,jems and jewellery sector, leather ,agriculture sector ,service sector ,tea,pharmaceutical,hardware and software,which will helpful for the Indian economy growth. No doubt that EXIM is one of the major factor for the economy development. It allows to Indian economy to grow in compare of other countries by promoting various facilities which are really inevitable . it allows for the Technological up gradation ,which in turn improve quality, productivity and reduce cost which ultimately increase the GDP,GNP,AND N.I Growth rate. Now in current scenario INDIA is staidly increasing it¶s share in important market. It¶s addressed Growth in exports to UK has been 30%, to Singapore (with which we implemented the CECA)54%. India¶s exports to South Africa grew at 44% while for China the growth rate is 3 5%. Above all indication are good for the economic growth and are the milestone for the ECONOMY REFORMS.
The various sector in INDIA are growing day by day and expanding their smarket viz. IT sector,automobile sector,telecom sector, marine sector, jems and jewellery sector, leather , service sector , tea, pharmaceutical, hardware and software are growing r except farm or agriculture sector in recent era. There can be so many factor for it but among all one of the major factor is EXIM Policy which are playing a important role to expanding market at a global international level. EXIM policy allows and promoting the exports of various goods and services at a specific duty which generate revenue and promote import some specific goods and technology at a zero duty which help economy to grow and also generate employment. Government plays a important role in all, as if we see the earlier era in between 1960¶s to 1980s there was restriction for the foreign company to enterd into the indian market but after 1980¶s the indian government allowed the foreign company to enter into the indian market with the joint ventures to promote the different sector in india which was really needful. Why I m talk ing about,because it is giving the clear view to existanceof the ECONOMIC GLOBALIZATION in india which finally shows the integration of national economy into the international economy through trade,foreign direct investment(FDI),capital flow,migration,immi gration and the spread of technology. It can be measure in terms of good and services(e.g exports and imports as a propotion of national income) ,labour/people(eg. Net migration rates) and capital(inward and outward direct investment). It proves the indust rial revolution as well as technological revolution in great extend. Government also helped them by introduced to the ECONOMIC LIBRALIZATION in this growing golbal competition in modern era. So,it seems to growth in the GDP which is now 9% and in particular manner it seems 20% in industry,62.6% in services but only 17.5% in agriculture. It can also seems exports and imports of goods are in favourable manner which are growing day by day. Exprots in terms of software petorleum products,textile goods,gems and jewelry,engineering goods,chemicals etc. and Imports in terms of crude oil,machinery,fertilizer,chemicals etc. and due to all indan economy is in growing condition in this changing scnaerio. It touched the indian economy in great manner that in turn proof that in recent scenario india has became a manufacturing hub over other BRIC countries. But question is that why the government does not doing much more for removal of regional imbalances,regional inequilities and wealth inequilities and the diversification which are needed much more in farm sector? To promot the sector is really one of the best factor to be developed,contrary it is aso indispensable to remove the regional imbalances which can be major drawback , which are prevent india to be dev eloped nation in the great extend.
So for that capital controls in terms of inflow and outflow should be controlled and also there should be the proper finance. . Incidentally, the capital of New York state is not New york city but the small town of Alban y. That is the kind of distribution that india needs badly. With will power ,that kind of redistribution can be achieved.
THANK YOU . SIGNATURE