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Exim Policy of India

Ritu Ranjan BBA Global Business School

CONTENTS
Introduction Why do we need export-import Brief history Exim policy Objectives Aim Export promotion schemes & incentives Indias foreign trade policy 2009-14(Different sectors) Import Facilitation for Export Production

WHY DO WE NEED EXPORT-IMPORT

Export means trade across the political boundaries of different nation. No Nation is self sufficient and had all the goods that it needs. This happens because of climatic variation & unequal distribution of natural resources. In India, Govt. has come out from time to time with various policies on foreign trade to promote export thereby increasing the Foreign Exchange Reserve. These policies are termed as Exim Policy

History
Import export act was introduced by government during second world war and it lasted for around 45 yrs and in June 1992 this act was superseded by the Foreign Trade (Development & Regulation Act), 1992. . The basic objective of this new act was to give effect to the new liberalized export and import policy of the Govt. till 1985 annual policies were made but from 1985-92, three yr policy was made and then 5 yr policy was made coinciding with 5 yr plans 1992-97, 1997-02, 2002-07.

WHAT IS EXIM POLICY?

It contains policies in the sphere of Foreign trade i.e. with respect to import & export from the country. Set of guidance and instruction established by the DGFT in matters related to the import and export of goods in India.

Now its known as Foreign Trade(Development & Regulation) Act, 1992. Headed by Director General of Foreign Trade.

OBJECTIVE OF EXIM POLICY

Accelerating the countrys transition.

Stimulating sustained economic growth.


Enhancing the technological strength and efficiency

Encouraging the attainment of internationally accepted standards of quality


Providing consumers with good quality products and services at reasonable prices. Double India's share in global merchandise.

AIM

The policy aims at developing export potential, improving export performance, boosting foreign trade and earning valuable foreign exchange.

EXPORT PROMOTION SCHEMES & INCENTIVES


DUTY

DRAWBACK: sec 74 & 75 of Customs Act.


Defined as the rebate of duty chargeable on any imported or excisable material used in the manufacture of goods exported from India.

EXPORT PROMOTION CAPITAL GOODS(EPCG)

Introduced in 1990 Enable the import of capital goods at concessional rate of duty subject to an appropriate export obligation accepted by the exporter.

EXPORT

PROMOTION INDUSTRIAL PARK (EPIP) SCHEME


EPIP introduced in august 1995 & merged with ASIDE from 1 April 2002. Government through this scheme provides financial support to create infrastructure for export production.
CRITICAL

INFRASTRUCTURE BALANCE(CIB) SCHEME


Introduced in 1996-1997 To balance capital investments for removing bottlenecks from the path of development of infrastructure for export production & easy transport.

INDIAS FOREIGN TRADE POLICY 2009-14


The Union Commerce Ministry, Government of India announces the integrated FTP in every five year. This is also called EXIM policy. This policy is updated every year with some modifications and new schemes. New schemes come into effect on the first day of financial year i.e. April 1, every year. The Foreign trade Policy which was announced on August 28, 2009 is an integrated policy for the period 2009-14.

INDIAS FOREIGN TRADE POLICY 200914


Announcements for MDA & MAI: Higher allocation for Market Development Assistance (MDA) and Market Access Initiative (MAI) has been announced.

Towns of Export Excellence (TEE) The following cities have been recognized as towns of export excellence (TEE) Handicrafts : Jaipur, Srinagar and Anantnag Leather Products : Kanpur,Dewas and Ambur Horticultural Products: Malihabad

INDIAS FOREIGN TRADE POLICY 200914


Announcements For Marine sector : Fisheries exempted from maintenance of average EO under EPCG Scheme (along with 7 sectors) however Fishing Trawlers, boats, ships and other similar items shall not be allowed for this exemption. Additional flexibility under Target Plus Scheme (TPS) / Duty Free Certificate of Entitlement (DFCE) Scheme for the marine sector.

INDIAS FOREIGN TRADE POLICY 200914


Announcements for Gems & Jewellery Sector: Duty Drawback is allowed on Gold Jewellery. Plan to establish "Diamond Bourse (s) with an aim to make India and International Trading Hub . Introduction of a new facility to allow import on consignment basis of cut & polished diamonds for the purpose of grading/ certification.

INDIAS FOREIGN TRADE POLICY 200914


Announcements for Agro Exports: Introduction of a single window system to facilitate export of perishable agricultural product with an aim to reduce transaction and handling cost. This system will involve creation of multifunctional nodal agencies. These agencies will be accredited by APEDA.

INDIAS FOREIGN TRADE POLICY 200914


Announcements for Leather Exports:

On the payment of 50 % applicable export duty, Leather sector shall be allowed reexport of unsold imported raw hides and skins and semi finished leather from public bonded ware houses.

INDIAS FOREIGN TRADE POLICY 200914


Announcements for Tea Exports:

The existing Minimum value addition under advance authorization scheme for export of tea is 100 %. It has been reduced from the existing 100% to 50%. DTA (Domestic Tariff Area) sale limit of instant tea by EOU(Export oriented units) increased from 30% to 50%. Export of tea has been included under VKGUY(Vishesh Krishi & Gram Udyog Yojana)) Scheme benefits.

INDIAS FOREIGN TRADE POLICY 200914


Announcements for Pharma Exports:

Export Obligation Period for advance authorizations increased from existing 6 months to 36 months. Pharma sector included under MLFPS for countries in Africa and Latin America & some countries in Oceania and Far East.

INDIAS FOREIGN TRADE POLICY 200914


Export Growth Target: 15 % for next two year and 25 % thereafter. Export Target : $ 200 Billion for 2010-11 To arrest and reverse declining trend of exports which will be reviewed after every two years. To Double India's exports of goods and services by 2014.

Aim in general:

Aims at developing export potential, improving export performance, boosting foreign trade and earning valuable foreign exchange(as India's exports have been battered by the global recession). Simplification of the application procedure for availing various benefits. To set in motion the strategies and policy measures which catalyze the growth of exports. To encourage exports through a "mix of measures including fiscal incentives, institutional changes, procedural rationalization and efforts for enhance market access across the world and diversification of export markets.

Import Facilitation for Export Production


Export Promotion Capital Goods Scheme Special Import Licences Duty Free Licences under Duty Exemption

Scheme

Duty free licences are issued as : (1) Advance licence (2) Advance Intermediate licence. (3) Special Imprest licence. (4) Licence for jobbing, repairing etc. for reexport. (5) Licence under export production programme. (6) Advance Release Order.

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