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Role of DGFT in foreign trade policy

Group 2 Aashi Lunia Amrita Ingole Ashish Barla Ashutosh Lahamge Gurwinder Singh
Course MBA-AB Subject: Foreign Trade policy in Agri Export Management

DGFT
Directorate General of Foreign Trade is an attached office of the Department of Commerce, Ministry of Commerce and Industry, responsible for execution of the import and export Policies of India DGFT runs various schemes for trade promotion and facilitation. Using this facility you may file, prepare and track online application in these schemes. It was earlier known as Chief Controller of Imports & Exports (CCI&E) till 1991 DGFT plays a very important role in the development of trading relations with various other nations and thus help in improving not only the economic growth but also provides a certain impetus needed in the trade industry

ORGANISATIONA SET UP OF DGFT

Headquarter(NEW DELHI) Zonal office(4) Regional office(36 ALL OVER THE COUNTRY)

Trade scenario before 1991


Scenario pre 1991
Requirement for licenses Bureaucratic controls Complex legislations & manufacturer protective policies High import duties

Scenario after 1991


End of licensed raj A marked shift from protecting producers to benefiting consumers. Process of global integration of Indian economy commenced Drastic cut in import duties Emergence of worldwide financial markets and better access to external financing Realization of a common global market, based on the freedom of exchange of goods and capital Increase in information flow between geographically remote locations Growth of cash cultural contacts

Anup K. Pujari
LL.B. (Delhi), Ph.D. (Boston), IAS Director General of Foreign Trade Department of Commerce Government of India

DGFT
Before 1991
Trade Regulator

After 1991
Trade facilitator

Overview of trade formulation policy


1950-1960 Policies influenced by self reliance n self sufficiency

1970-1980 Policies influenced by export led growth, improving efficiency competitiveness of Indian industries

1990s Policies influenced by globalization of the Indian economy, improving competitiveness of its industry and adverse balance of payments situation

As far as the foreign trade sector is concerned, the year 1991is a watershed as massive trade liberalization measures adopted since this year mark a major departure from the relatively protectionist trade policies pursued in earlier years

Broader role of DGFT


Resource Centre for information Monitoring agency for import and export Support organization for WTO negotiations

FUNCTIONS OF DGFT

To implement the Exim Policy /foreign trade policy/commercial policy To Grant Exporter Importer Code Number to Indian Exporter and Importers DGFT permits or regulate Transit of Goods from India or to countries adjacent to India in accordance with the bilateral treaties between India and other countries.

To grant the permission of free export in Export Policy Schedule 2


DGFT also play an important role in controlling DEPB Rates Setting standard input-output norms is also controlled by the DGFT.

Functions of DGFT
Conti

Any changes or formulation or addition of new codes in ITC-HS Codes are also carried out by DGFT DGFT provided Digital Signature facility to Importers and Exporters online ecommerce application filling since 2004 Zonal/Regional offices of DGFT are also functioning as Export Facilitation Centers and as nodal agencies to attend to the problems of trade and industry and to coordinate with different departments Licenses to restricted products in special cases and resolving the committee and cases relevant with Foreign Trade. DGFT issues and formulate Foreign Trade Laws, Rules and Regulations, Foreign Trade Policy, Foreign Trade Procedures

INDIAS FOREIGN TRADE POLICY 2009-14

The Union Commerce Ministry, Government of India announces the integrated Foreign Trade Policy 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.

Objectives of Foreign Trade Policy 2009-2012

Short term objectives


To arrest & reverse the declining sector of exports To provide additional support to those sectors which have been badly hit by recession in the developed world

Medium term objectives


To achieve annual growth of 15% To achieve annual export growth of around 25% by 2014 To double India's exports of goods and services by 2014

Long term objective


To double Indias share in global trade by 2020

Objectives og foreign trade policy 2009-2012


Short term objectives
To arrest & reverse the declining sector of exports To provide additional support to those sectors which hvave been badly hit by recession in the develpoed world

Medium term objectives


To achieve annual growth of 15% To achieve annual export growth of around 25% by 2014 To double indias exports of goods and services by 2014

Long term objective


To double indis share in global trade by 2020

INDIAS FOREIGN TRADE POLICY 2009-14


Aim in General
The policy aims at developing export potential, improving export performance, boosting foreign trade and earning valuable foreign exchange. FTP assumes great significance this year as India's exports have been battered by the global recession. A fall in exports has led to the closure of several small- and medium-scale export-oriented units, resulting in large-scale unemployment.
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Exim policy
Export Import Trade Policy or EXIM Policy is the set of guidelines formulated by the board for free flow of foreign trade It improve the intensity of Import Export trading

DGFT issues several policy updates that are important for the traders so that they can plan profitable and successful trading strategies

PRIME OBJECTIVES OF EXIM POLICY

Special Focus on Initiatives General Provisions Regarding Import and Export Promotional Measures Duty Exemption / Remission Schemes Export Promotion Capital Goods Scheme Export Oriented Units (EOUs) Special Economic Zones Free Trade and Warehousing Zones Deemed Exports

IMPORTERS EDITORS CODE NUMBER(IEC)


It is permit issued by DGFT to any bonafide person/ company for starting a venture of import export trade. It is like an identification ID issued to every importer exporter of the country. Without ICE code, nobody can pursue a foreign trade transaction in India.

DEFB RATES
Export Incentives granted by Indian Government, for saving Customs Duty when Importing several Goods. Neutralizes the customs duty applicable on import content of the export product. Incentive is usually granted to the exporter under several circumstances mentioned under DEPB General Instructions Specified DEPB rates and General Instructions are also set, and updated by DGFT India.

Issue of notification & circulars


DGFT India issues Notifications, Public Notices, Circular and Notices, which are of prime importance for import export traders Notifications are actually the announcements made by the board for introducing changes made in the existing policies

Recent notifications
Notifications(05/06/2012) The Central Government hereby notifies the Foreign Trade Policy, 2009-2014 as updated upto 5th June 2012 and incorporating the Annual Supplement. This shall come into force w.e.f. 5th June, 2012. Notification (08/06/2012) Export of Skimmed Milk Powder (HS Code 04021010) which was prohibited as per Notification No. 23 (RE2010)/2009-2014 dated 18.02.2011, is now made free.

Recent public notices


Public notice(05/06/2012) With the introduction of electronic BRC system, banks will issue and transmit BRCs electronically to DGFTs server replacing the manual mode of obtaining and submitting BRC. The revised process flow with technical guidelines are available on the DGFTs website dgft.gov.in under the e-BRC icon.

Digital signature
In December 2002, DGFT became India's first digital signature enabled agency All Exim notifications, public notices, and in course of time, license issued by DGFT can be electronically transmitted with digital signature The DGFT, today signed an MOU (Memorandum of Understanding) with M/s. SafeScrypt Limited, who will provide the DGFT with necessary technical support and consultancy services in this regard. The exporting community who apply for import/export licenses, Importer Exporter Code (IEC) would now be able to interact with DGFT on a secured electronic platform which will facilitate paperless verification, processing and communication.

ITC-HS
Indian trade clarifications based on harmonic system It describes rules & regulations related to import and export policies Any changes or formulation or addition of new codes, commodity description, weeding out of defunct codes, changes in product description in ITC-HS Code are also carried out by DGFT

The EXIM Policy 2010-2011 is one of the most ambitious policies of the government to liberalize the Indian economy and the

FLAWS OF FTP
i) No concrete solution or reduce delays and transaction costs. ii) Software Technology Parks of India not given income tax exemption. iii) Poor export in growth, in rupee terms, and in volume terms, ignored. iv) The rising crude oil prices and inflationary pressures in the economy. v) Due to global economic slowdown and recession in the USA economy, Indias largest trading partner, uncertainty of the rupee-dollar exchange rate continues which in turn affects the economy.