New Foreign Trade Policy 2009-14

Presented by, Rachita Masand Prerana Sharma & Shivaji Saha

THE SCORECARD
AREAS UNDER CONSIDERATION GLOBAL EXPORTS GLOBAL MERCHANDISING GLOBAL SERVICES EXPORT (ONLY SERVICES) GOODS AND SERVICES TARGET $ 200 BILLION ACHEIVEMENTS $168 1.45%

DOUBLE OUR 0.83% TO SHARE FROM THE 2003-04 INCREASE SUBSTATIALLY 1.4% TO

2.8%

INCREASE SUBSTANITALLY

0.92%

TO

1.64

THE CURRENT OBJECTIVES THE CURRENTOBJECTIVES
1) INCREASE THE AMOUNT OF EXPORTS. 2)REVIVE THE SECTORS. 3)EXPAND THE MARKETS

SOME SCHEMES
• Focus Market Scheme There were 26 new markets added. E.g.- Egypt, Kenya, Australia, Brazil, New Zealand etc. Duty credit increased to 3% from 2.5% of the FOB value.

• Focus Product Scheme Products now include auto and engineering components. Duty credit increased 2% from 1.25% of FOB and to 5 percent for special focus products (E.g.handicrafts ).

Market Linked Focus Product Scheme Now includes pharmaceuticals, synthetic textiles, certain iron and steel products, aluminium, and markets extended to Africa, Latin America, Vietnam, Cambodia, Australia and New Zealand. Duty credit raised to 2% from 1.2% on FOB value of exported goods. Served From India Scheme Eligibility is foreign exchange worth Rs.10 lakhs but for individuals its Rs.5 Lakhs. Credit of 10 percent of the free foreign exchange earned in each fiscal year. E.g:-Professional Services, Computer Related services, Hotels, Restaurants, Educational Services, Research and Development services, Communication Services. Towns of Export Excellence Towns producing and exporting goods worth Rs.150 Cr. Bhilwara(Rajasthan) Textiles ,Surat(Gujarat) for Diamonds and Panipat(Haryana) for Blanket

Trade bans TRADE BANS
COUNTRY IRAQ IRAN ITEM ARMS AND RELATED MATERIAL MATERIALS, TECHNOLOGY, EQUIPMENT HELPING IN THEIR NUCLEAR ENRICHMENT PROGRAM.

VENEZUELA DEMOCRATIC PEOPLE’S REPUBLIC OF KOREA

ROUGH DIAMOND ANY MATERIALS, TECHNOLOGY, EQUIPMENT CONTRIBUTING TO THEIR MISSILE PROGRAM

Thrust Sectors foreign trade policy (09-14)

Gems and Jewellery-getting lustrous
• Diamond bourses • Increase in the limit of personal carriages  overseas exhibitions($5 mill.)  samples for export promotion($1 mill. ) • Import on consignment basis of cut and polished diamonds • duty drawback (refund) allowed on gold jewelry

AGRICULTURE
• Vishesh Krishi and Gram Udyog Yojana • Agri Export Zones(AEZ)capital goods imported under EPCG funds shall be earmarked under ASIDE units in AEZ shall be exempt from bank guarantee under EPCG • Import of inputs such as pesticides • Towns of export excellence-threshold limit 250 Cr.

Leather and footwear
• Enhancement of duty credit scrip under Focus Product Scheme (FPS) • “Zero Duty” under Export Promotion Capital Goods Scheme (EPCG) • Re-export of unsuitable imported materials • Increase in the limit for duty free entitlements of import trimmings, embellishments and footwear components

Other Sectors
• Marine-adjustment assistance scheme to be continued till march 2010, Additional flexibility under Target Plus Scheme (TPS) / Duty Free Certificate of Entitlement (DFCE) Scheme for Status Holders • Pharmaceuticals-Export obligation period (EOP) has been extended from 6 months to 36 months, pharmaceuticals a part of MLFPS • Tea-bought under VKGUY, minimum value addition under advance authorization scheme for export of tea has been reduced from the existing 100% to 50%.

BAG OF MIXED REACTIONS
• Textile industry unhappy:  Only one per cent additional duty scrip for status holders  Zero duty under EPCG Scheme would not benefit small and medium exporters

• The apprehension of farmers in the south plantation states regarding FTA • Handloom sector is hopeful

OLD WINE, NOT-SO-NEWBOTTLE
• No major steps have been taken to address the slowdown in exports and provide a fillip to exports • FTP should have addressed:  Timely export credit at internationally competitive rates  Providing inputs at international prices  Safeguard to exporters against dollar fluctuations  Review of DEPB scheme in compliance with WTO

CHILL PILL for EXPORTERS
 Inter-ministerial group to address issues raised by exporters   New directorate of trade remedy measures to be set up  Obligation under EPCG relaxed   Steps to help exporters reduce transaction costs   Single-window scheme for farm exports   Export units allowed to sell 90% of goods in domestic market   Provision for state-run banks to provide dollar credits   Number of duty-free samples for exporters raised to 50 pieces from 15 

CONTINUING THRUST -EXPORT TARGET