A PROJECT

ON
EXIM POLICY

A MINI PROJECT REPORT

Submitted
To

SCHOOL OF MANAGEMENT

SRM UNIVERSITY
By
ROHIT KUMAR (3510910654)

UNDER THE GUIDANCE

Of

MR. YASEEN MASSOD

FACULTY – SCHOOL OF MANAGEMENT

 ACKNOWLEDGEMENT

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.
 Contents
Sr.No. Subject Covered
.
1 Introduction
2 General Objectives of Exim Policy
3 Objectives Of EXIM policy (2008 –09)
4 Strategy
5 Main Annual Supplement Highlights
6 Some Other Highlights of The EXIM Policy
7 Implications of The Foreign Trade
8 Negative List of Exports
9 FOREIGN TRADE POLICY 2009-14
10 Market and Product Diversification
11 Economic Growth in terms of diff. sector
12 Conclusion
13 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 our
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 earning 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 on 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 areas which would generate additional
employment opportunities, particularly in semi-urban and rural
areas, and developing a series of ‘Initiatives’ 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 and 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 beens
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 ‘Vishesh 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 through 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 implications. 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 of recession there is some sign
of a turnaround and the emergence of ‘green 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 policy 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 growth 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 endeavour 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 31st 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 important 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 product
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 available 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 ‘Made 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 ‘status holders’. For technological upgradation of the export
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 technology and
reduce cost of production.
For upgradation of export sector infrastructure, ‘Towns 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 exports. 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 ‘green products’ through measures such as phased manufacturing
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 turbines,
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 Scheme 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 ‘Towns of Export
Excellence’ for handicrafts; Kanpur, Dewas and Ambur have been recognised
as ‘Towns 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 ‘green 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 (excluding
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 December,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 “Diamond 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 exhibitions. 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 authorisation 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 Africa and
Latin America; some countries in Oceania and Far East.
Handloom Sector
35. To simplify claims under FPS, requirement of ‘Handloom 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
‘similar 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 under
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 insurance 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 off
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 manufacturer,
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 Advance 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 allowed 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 ‘renowned 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 the 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 authorization, 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.

Handloom:

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.

Handicraft:

Establishment of new handicraft SEZs would enable the 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 –

Service

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, packaging, 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
for 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 post-
production 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 capital 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, contemporary 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 organizations, 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 ‘magic figure’ of 100 billion dollars. In fact, they have
touched the ‘auspicious 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 expectations. 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. ‘FOCUS PRODUCT’ & ‘FOCUS 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 ‘Focus
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 value 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 ‘occupying
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 ‘Focus 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 schemes 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 trade – 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 purposes 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 will 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 ‘land’ and the ‘air’, we felt we must do
something for the ‘sea’ too! We had already 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/ authorisation/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 bank 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 with 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
 Conclusion

As per the rule, Govt. of india,Ministry of Commerce and industry

announce EXIM Policy after every five year which updated every year on 31st
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 the 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. sector 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 35%.
Above all indication are good for the economic growth and are the milestone
for the ECONOMY REFORMS.
 Suggestion

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 talking
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,immigration 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 industrial
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 developed 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 Albany. That is the kind
of distribution that india needs badly. With will power ,that kind of
redistribution can be achieved.

Thank you .

Signature

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