ASSIGNMENT

PREFACE

 WTO, its Functioning & Dispute Settlement Process

 Various Rounds & Ministerial Conferences
 Agreement on Agriculture
 General Agreement on Trade in Services (GATS)
 Trade Related Investment Measures (TRIMS)
 Trade Related Intellectual Property Rights (TRIPS)
 Technical Barriers to Trade (TBT) & Sanitary and
Phytosanitary Measures (SPS)
 FTP (2009-2014) Main Points

Submitted By: Himanshu Kumar

WTO and its Functioning & Dispute Settlement
Process
WTO
The World Trade Organization (WTO) is an organization that intends to supervise
and liberalize international trade. The organization officially commenced on January 1, 1995
under the Marrakech Agreement, replacing the General Agreement on Tariffs and
Trade (GATT), which commenced in 1948. The organization deals with regulation of trade
between participating countries; it provides a framework for negotiating and formalizing trade
agreements, and a dispute resolution process aimed at enforcing participants' adherence to
WTO agreements which are signed by representatives of member governments and ratified
by their parliaments. Most of the issues that the WTO focuses on derive from previous trade
negotiations, especially from the Uruguay Round (1986-1994).

The organization is currently endeavouring to persist with a trade negotiation called

the Doha Development Agenda (or Doha Round), which was launched in 2001 to enhance
equitable participation of poorer countries which represent a majority of the world's
population. However, the negotiation has been dogged by "disagreement between exporters
of agricultural bulk commodities and countries with large numbers of subsistence farmers on
the precise terms of a 'special safeguard measure' to protect farmers from surges in imports.
At this time, the future of the Doha Round is uncertain.

The WTO has 153 members, representing more than 97% of total world trade [8] and 30
observers, most seeking membership. The WTO is governed by a ministerial conference,
meeting every two years; a general council, which implements the conference's policy
decisions and is responsible for day-to-day administration; and a director-general, who is
appointed by the ministerial conference. The WTO's headquarters is at the Centre William
Rappard,Geneva, Switzerland.

FUNCTIONING
Among the various functions of the WTO, these are regarded by analysts as the most
important:

Submitted By: Himanshu Kumar

 It oversees the implementation, administration and operation of the covered
agreements.
 It provides a forum for negotiations and for settling disputes.

Additionally, it is the WTO's duty to review and propagate the national trade policies, and to
ensure the coherence and transparency of trade policies through surveillance in global
economic policy-making. Another priority of the WTO is the assistance of developing, least-
developed and low-income countries in transition to adjust to WTO rules and disciplines
through technical cooperation and training.

The WTO is also a centre of economic research and analysis: regular assessments of the
global trade picture in its annual publications and research reports on specific topics are
produced by the organization Finally, the WTO cooperates closely with the two other
components of the Bretton Woods system, the IMF and the World Bank

DISPUTE SETTLEMENT FUNCTION

In 1994, the WTO members agreed on the Understanding on Rules and Procedures
Governing the Settlement of Disputes (DSU) annexed to the "Final Act" signed in Marrakesh
in 1994. Dispute settlement is regarded by the WTO as the central pillar of the multilateral
trading system, and as a "unique contribution to the stability of the global economy". WTO
members have agreed that, if they believe fellow-members are violating trade rules, they will
use the multilateral system of settling disputes instead of taking action unilaterally. [46]

The operation of the WTO dispute settlement process involves the DSB panels, the
Appellate Body, the WTO Secretariat, arbitrators, independent experts and several
specialized institutions.

A WTO dispute proceeds through three main stages:

 Consultation;

 All disputes start with a request for consultations.

 The two sides consult for 60 days with the goal of negotiating.

 Concessions may be required from the defendant.

 Formal litigation; and, if necessary,

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  Panel proceedings

- Two rounds of testimony

- Circulation of an interim report

- Parties can still negotiate a settlement.

- Panel issues final report

**Not to adopt the report

**Appeal the report

 Appellate Body

- Hearing testimony from the parties

- How the panel may have erred in its legal reasoning

- Gives final decision

- Case in favor of defendant

- Case in favor of complainant

 Implementation.

AB calls for defendant to bring its measures into accordance with its WTO

obligations. If the complainant feels that the defendant has not taken
appropriate steps, it can request a “compliance” panel.

 Compliance panel

- Judge the defendant’s efforts have brought its measures into

compliance

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  If not

-The defendant can appeal to the AB

-The complainant can request a second panel to set the level at

which it can “retaliate” against the defendant.

Various Rounds & Ministerial Conferences

Trade rounds
Geneva-
 The First round took place in April 1947 in Geneva

 Lasted for 7 months.

 23 countries took part in the round.

 Signing of GATT, 45,000 tariff concessions affecting $10 billion of trade

Annecy-
 The second round took place in 1949 in Annency, France.

 Lasted for 5 months.

 13 countries took part in the round.

 The main focus of the talks was more tariff reductions, around 5000
total. It admitted new members of GATT.

 The original members also negotiated an additional 13,000 tariff

reductions.

Torquay-
 The third round occurred in Torquay, England in 1951.

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  Lasted for 8 months.

 38 countries took part in the round.

 8,700 tariff concessions were made totaling the remaining amount of

tariffs to three-fourths of the tariffs which were in effect in 1948.

 The rejection by the United States of the Havana Charter signified the
establishment of the GATT as a governing world body.

Geneva 2’nd-

 The fourth round returned to Geneva in 1955.

 Lasted for 5 months.

 26 countries took part in the round.

 $2.5 billion in tariffs were eliminated or reduced.

 It dealt with the admission of Japan.

 Several countries opposed the admission of Japan, arguing that its low
wages would greatly distort trade.

 By the late 1960s, most of these countries fully accepted Japan under
the MFN status.

Dillon-

 The fifth round occurred once more in Geneva.

 Lasted for 11 months.

 26 countries took part in the round

 Along with reducing over $4.9 billion in tariffs, it also yielded discussion
relating to the creation of the European Economic Community (EEC).

 Resulted in a 10 percent reduction in tariffs that had been imposed on

U.S. exports and other total world tariff reductions, of $40 billion.

Kennedy-

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  The sixth round was the last to take place in Geneva

 Lasted for 37 months

 66 countries took part in the round.

 The Kennedy Round had four major goals:

-to slash tariffs by half with a minimum of exceptions,

-to break down farm trade restrictions,

-to strip away nontariff regulations, and

-to aid developing nations.

 Concessions were made on $40 billion worth of tariffs.

 Some of the GATT negotiation rules clearly defined.

 Cut tariffs on non-agricultural products by about 35 percent, affecting

some 80 percent of the dutiable products of the industrialized world.

 Agricultural goods received a 20 percent reduction in tariffs

Tokyo-

 The Seventh round occurred in 1973 in Tokyo, Japan

 Lasted for 74 months and 102 countries participated.

 Reduced tariffs and established new regulations aimed at controlling the

proliferation of non-tariff barriers and voluntary export restrictions

 A series of agreements on non-tariff barriers did emerge

 Some other agreements were discussed :-

-Subsidies and countervailing measures -

-Technical barriers to trade –

-Import licensing procedures

Submitted By: Himanshu Kumar

-Government procurement

-Customs valuation -

-Anti-dumping-

-Bovine Meat Arrangement

-International Dairy Arrangement

-Trade in Civil Aircraft

Uruguay-
 The fifth round occurred in September 1986

 Lasted for 87 months. 123 countries took part in the round

 The main objectives of the Uruguay Round were:

• To improve market access for agricultural products

• To reduce agricultural subsidies and domestic support.

• To put restrictions on foreign investment, and

• To begin the process of opening trade in services like banking and

insurance.

• To harmonize sanitary and phytosanitary measures

 It revised the rules for settling disputes

 The WTO replaced GATT as an international organization

Doha-
 Started from November 2001 in Doha, Qatar

 Factors leading to Doha Round

• Singapore issues

• Failure of Millennium round

• Terrorist attacks on US

Submitted By: Himanshu Kumar

 • Main topics of discussion are:-

 Agriculture.

 Trade in services

 Intellectual property regulation (TRIPS).

Ministerial Conferences-
The topmost decision-making body of the WTO is the Ministerial Conference, which
usually meets every two years. It brings together all members of the WTO, all of
which are countries or customs unions. The Ministerial Conference can take
decisions on all matters under any of the multilateral trade agreements.

 Cancun, 2003

 Geneva, 2004

 Paris, 2005

 Hong Kong, 2005

 Geneva, 2006

 Potsdam, 2007

 Geneva, 2008

Agreement on Agriculture
The Agreement on Agriculture is an international treaty of the World Trade
Organization. It was negotiated during the Uruguay Round of the General Agreement
on Tariffs and Trade, and entered into force with the establishment of the WTO on
January 1, 1995.

THREE PILLARS

 Domestic support

 Market access

Submitted By: Himanshu Kumar

  Export subsidies

DOMESTIC SUPPORT-
 The AoA structures domestic support into three categories or "boxes":

-Green Box : fixed payments to producers for environmental programs

-Amber Box: domestic subsidies that governments have agreed to reduce but not
eliminate

-Blue Box: subsidies which can be increased without limit

 The domestic support is divided into two categories,

a) those which have to be reduced and

b) those which are exempted from reduction.

 The reducible support was to be reduced by 20% by the developed countries in 6

years period.

 The required reduction in case of the developing countries was 13.3% over 10 years
period.

MARKET ACCESS-
 It refers to the reduction of tariff (or non-tariff) barriers to trade by WTO member-
states.

 The 1995 AoA required tariff reductions of:

- 36% average reduction by developed countries, with a minimum per tariff line
reduction of 15% over 6 years.

- 24% average reduction by developing countries with a minimum per tariff line
reduction of 10% over 10 years.

- Least Developed Countries (LDCs) were exempted from tariff reductions

 Three aspects of market access are:-

-Tariff levels,

-Special safeguard (SSG) and

-Tariff rate quotas (TRQ).

Submitted By: Himanshu Kumar

  Reduction of tariff is normally expected to improve the prospect of market access for
imported products in a country

EXPORT SUBSIDIES-
 The 1995 AoA required developed countries to reduce export subsidies by at least
35% and by at least 21% over the 5 years to 2000.

 For developing countries the percentage cuts are 24% and 14% respectively in equal
annual installment over 10 years.

Main deficiencies and imbalances-

 Need for domestic food production

 Non-commercial farming

 High tariffs in developed countries

 Tariff quotas provided for country specific

 Major developed countries have put prohibitive tariffs on some product lines by
taking advantage of the tariffication process.

 The liberalization of trade in services has benefited the ICs and their suppliers,
whereas the developing countries have enjoyed very little benefit.

 Uncertainty about specific domestic support

 Subsidies hamper healthy competition.

 Subsidized food stock of developing countries

 The second set of subsidies, prevalent in developed countries are exempted from
countervailing duty and countermeasures

 Special safeguard measures useless for developing countries.

 Double risk for developing countries.

 Difficult for developing countries to prove injury to domestic production

 Unfair obligation

Submitted By: Himanshu Kumar

 - Developing countries are prohibited from using measures for import restraint and
domestic subsidy beyond de minimizes level.

- Developing countries were prohibited from providing subsidy if they do not have
the reducible domestic support

- Developing countries are prohibited to provide export subsidy since they don’t
have a commitment schedule for reduction.

 Developed countries exempted the "green box" subsidies from reduction

 Exemption of some types of support from reduction and stipulation of only a small
reduction of the reducible subsidies provide an iniquitous and unfair advantage to
the developed countries

 No commitment for reduction of export credit, export credit guarantee and export
insurance.

 The provision of very huge domestic subsidies has continued in the ICs and has been
increasing over the years.

 ICs have reduced the AMS but increased the level of exempted subsidy by huge
amounts - resulting in a very high rise in total domestic support, including AMS and
the exempted subsidies

 The developing countries are not able to provide domestic support even if they are
permitted to.

Suggestions on Market Access

 Developing countries should be allowed to take direct import control measures

- Against developed countries specifically on the products that are getting domestic
support and export subsidy

- On import of agricultural products, to ensure rural development and food security.

 Developing countries shall not be required to lower bound tariffs and no

compensation shall be required to be given for raising the bound tariff on
agricultural and food products

 If the current bound level of tariff on an agricultural product is not adequate to

protect the small farmers, it may enter into consultations with the countries to
increase the bound tariff.

 No compensation shall be required to be given by the developing country for raising

the bound tariff in such cases.

Submitted By: Himanshu Kumar

  There should be an agreement on effectively and directly assisting the net food-
importing developing countries.

 There should be no dependence on imports of staple food.

 General Tariff Reduction: ceiling on the tariff levels

 Special safeguard mechanism should be utilized by developing countries whether or

not they have resorted to tariffication.

 Transparent and rational basis in utilization of the TRQ by the importing countries.

 Developed countries should reduce their tariffs on the product lines

Suggestions on Domestic Support

 There should be flexibility regarding import restraint and domestic subsidy

 Application of reduction commitment to green box and blue box subsidies.

 Developing countries may provide subsidies for domestic production of food

products for domestic consumption.

 Permit the others also to take new measures up to levels substantially higher than
the de minimize levels

Suggestions on Export subsidy

 Export subsidy, including export credit, export credit guarantee and export
insurance, must be eliminated immediately

 Reduce domestic subsidies and totally eliminate export subsidies

 The developing countries may provide export subsidy

 All countries shall notify their current export credit, export credit guarantee and
export insurance programs and measures to the WTO so that the obligation of
elimination is monitored effectively.

 There shall be a ceiling on the export subsidy.

General Agreement on Trade in Services (GATS)

Submitted By: Himanshu Kumar

The General Agreement on Trade in Services (GATS) is a treaty of the World Trade
Organization (WTO) that entered into force in January 1995 as a result of the Uruguay
Round negotiations. The treaty was created to extend the multilateral trading system
to service sector, in the same way the General Agreement on Tariffs and Trade (GATT)
provides such a system for merchandise trade.

All members of the WTO are signatories to the GATS. The basic WTO principle of most
favoured nation (MFN) applies to GATS as well. However, upon accession, Members may
introduce temporary exemptions to this rule.
Overall goal of the GATS is to remove barriers to trade, members are free to choose which
sectors are to be progressively liberalised, under which mode of supply a particular sector
would be covered under, and to what extent to which liberalisation will occur over a given
period of time. Members' commitments are governed by a "ratchet effect", meaning that
commitments are one-way and should not be wound back once entered into. This reason for
this is the creation of a stable trading climate. Article XXI allows Members to withdraw
commitments and so far two members have used this option (USA and EU). In November
2008, Bolivia notified that it will withdraw its health services commitments.

TRIMS
Introduction-
 What is the TRIMS Agreement?

 The Agreement on Trade-Related Investment Measures prohibits trade-

related investment measures, such as local content requirements, that are
inconsistent with basic provisions of GATT 1994.

 What is a TRIM?

 Local content requirements where governments require enterprises to use or

purchase domestic products.

 Trade balancing measures where governments impose restrictions on

imports by an enterprise or link the amount of imports to the level of its
exports

 Foreign exchange balancing requirements where an enterprise has the level

of imports linked to the value of its exports in order to maintain a net foreign
exchange earnings.

Submitted By: Himanshu Kumar

FDI Flow Process-

Illustrative List of TRIMS-

• Local Content – impose some certain amount or value of domestic inputs

• Trade Balancing – volume or value of imports tied to levels of exports

• Foreign Exchange Balancing – requires that foreign exchange made available for imports
must be a certain proportion of the value of foreign exchange realized from exports

• Foreign Exchange Restrictions – restricts access to foreign exchange in order to constrain

the volume of imported inputs

• Manufacturing Requirements – requires certain products to be produced locally

• Manufacturing Limitations – prevents firms from manufacturing certain products or

product lines in the host country

• Technology Transfer – requires specified technology to be transferred to host country for

use locally or certain types of R&D to be conducted locally

• Licensing of Technology – requires investor to license technology for use in the host
country.

Domestic Sales – requires an investor to sell a certain proportion of its output in the host
country

• Export Performance – requires that a minimum proportion or value of production in host

country be exported

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• Export Controls – certain products may not be exported

• Product Mandating – requires investor to supply certain markets with designated products
or products manufactured in a specified facility or operation or some products may be
exported only from host country

• Remittance Restrictions – restricts the right of the investor to repatriate returns from its
investment

• Local Equity – requires that a certain percentage of a firm’s equity must be held by local
investors in the host country.

• Market Reserve Policy - some markets reserved for local production

TRIPS
 What are IPRs?

 Intellectual property rights are the rights given to persons over the
creations of their minds.

 What is TRIPs?

 The Agreement recognizes that intellectual property rights (IPRs)

are private rights and establishes minimum standards of
protection that each government has to give to them.

Main Features-
• Standards

- Agreement sets out the minimum standards of protection to be

provided by each Member.

- Each of the main elements of protection is defined

- Paris Convention for the Protection of Industrial Property.

- Berne Convention for the Protection of Literary & Artistic

Works.

• Enforcement

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 - Provisions on civil and administrative procedures and remedies
that must be available so that right holders can effectively enforce their
rights.

• Dispute settlement

- The Agreement makes disputes between WTO Members about

the respect of the TRIPS obligations subject to the WTO's dispute settlement
procedures.

Sub Types of IPRs-

(a) Copyrights;

(b) Trademarks;

(c) Geographical Indications;

(d) Industrial Designs;

(e) Patents;

(f) Layout designs of integrated circuits;

(g) Trade secrets.

Copyrights;
 What are copyrights?

- right given by the law to creators of literary, dramatic, musical and

artistic works and producers of cinematograph films and sound recordings

 Need of it.

- to protect rights of reproduction, communication to the public,

adaptation and translation of the work

 Aim of them

- protects original work from unauthorized use.

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 - Authors must have the right to prohibit the commercial rental of their
works to the public.

 Time period - A copyright lasts for 60 years

 Treaties for copyrights

World Intellectual Property Organization (WIPO) has 2 treaties

- WIPO Copyrights Treaty

- ‘WIPO Performances and Phonograms Treaty (WPPT)

Trademarks;
 What is a trademark?

• a distinctive sign which identifies certain goods or services as

those produced or provided by a specific person or enterprise

 Utility of trademarks

• provides protection to the owner of the mark by ensuring the

exclusive right to use it

 Time limit

• A trademark can be renewed indefinitely beyond the time limit on

payment of additional fees

 Treaties.

• Madrid Agreement Concerning the International Registration of

Marks, and Madrid Protocol.

• The Trade Marks Act, 1999 in India.

Geographical Indications;
 What are Geographical Indications?

Submitted By: Himanshu Kumar

 • aspect of intellectual property which refers to the geographical
indication referring to a country or to a place situated therein as
being the country or place of origin of that product.

 Characteristic.

• such a name conveys an assurance of quality and distinctiveness

which is essentially attributable to the fact of its origin in that
defined geographical locality, region or country.

 Act governing it.

• In India, the Geographical Indications is governed by Geographical

Indications of Goods (Registration and Protection) Act, 1999

Industrial Designs;
 What are Industrial designs?

Industrial designs refer to creative activity, which result in the ornamental or

formal appearance of a product.

 Design rights

Design rights refer to a novel or original design that is accorded to the

proprietor of a validly registered design.

 Design Act

The essential purpose of the Designs Act, 2000 is to promote and protect the
design element of industrial production.

 Its purpose

To promote innovative activity in the field of industries.

 Time period

The duration of the registration of a design is initially ten years from the date
of registration

Submitted By: Himanshu Kumar

Patents;
 What is a patent?

A Patent is an exclusive right granted by a country to the inventor to make,

use, manufacture and market the invention that satisfies the conditions of
novelty, innovativeness and usefulness

 Time period

The term of every patent is now for 20 years from the date of filing

 Act :- The patent provisions in India are governed by the Patents Act,
1970

 Three permissible Exceptions

- for inventions contrary to order public or morality

- Members may exclude from patentability diagnostic, therapeutic and

surgical methods for the treatment of humans or animals.

- Members may exclude plants and animals other than micro-organisms and
essentially biological processes for the production of plants or animals other
than non-biological and microbiological processes

Layout designs of integrated circuits;

 What is an integrated circuit?

An integrated circuit means a product, in its final form or an intermediate

form, in which the elements, at least one of which is an active element, and
some or all of the interconnections are integrally formed in and/or on a piece
of material and which is intended to perform an electronic function.

 What is a layout design?

A layout-design is defined as the three-dimensional disposition,

however expressed, of the elements, at least one of which is an active
element, and of some or all of the interconnections of an integrated circuit, or

Submitted By: Himanshu Kumar

such a three-dimensional disposition prepared for an integrated circuit
intended for manufacture

 Act :- In India, the IPRs on the layout designs of integrated circuits are
governed by the Semiconductor Integrated Circuits Layout-Design Act,
2000

 Condition of being origin

A layout-design shall be considered original if it is the result of its

creator's own intellectual efforts

 Time period :- for a period of ten years

Trade secrets.

 What is a trade secret?

- any information that has been intentionally treated as secret and is

capable of commercial application with an economic interest.

 Its role.

-It protects information that confers a competitive advantage to those

who possess such information, provided such information is not readily
available with or discernible by the competitors.

 What things include in trade secrets

They include technical data, internal processes, methodologies, survey

methods used by professional pollsters, recipes, a new invention for which a
patent application has not yet been filed, list of customers, process of
manufacture, techniques, formulae, drawings, training material, source code,
etc.

 Aim

Trade Secrets can be used to protect valuable “know how" that gives an
enterprise a competitive advantage over its competitors

Submitted By: Himanshu Kumar

TBT & SPS
Technical Barriers to Trade-
The Agreement on Technical Barriers to Trade --- commonly referred to as
the TBT Agreement --- is an international treaty administered by the World Trade
Organization. It was last renegotiated during the Uruguay Round of the General
Agreement on Tariffs and Trade, with its present form entering into force with the
establishment of the WTO at the beginning of 1995.

 Technical Regulations and Standards

- Set out specific characteristics of a product

 Conformity Assessment Procedures

- Technical procedures which confirm that products fulfill the

requirements laid down in regulations and standards.

 What needs to be notified?

- The proposed standard/regulation is at variance with the

internationally accepted standards/regulations

- There are significant trade effects associated with the proposed

standard/regulation.

- There is no such international standard/regulation existing.

 Enquiry Point.

Sanitary and Phytosanitary Agreement (SPS) –

The Sanitary and Phytosanitary Agreement (SPS) allows members to take
scientifically based measures to protect public health. The agreement commits
members to base these measures on internationally established guidelines and
risk assessment procedures. In the case of particularly stringent measures,
countries must present scientific justification. When existing scientific evidence is
insufficient to determine risk, members may adopt measures on the basis of
available information, but must obtain additional information to objectively

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ground their assessment of risk within a reasonable period of time. Generally
speaking, the SPS Agreement is a compromise that permits countries to take
measures to protect public health within their borders so long as they do so in a
manner that restricts trade as little as possible.

Foreign Trade Policy (FTP) 2009-2014, Major Points

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 (FMS).

3. Incentive available under FMS raised from 2.5% to 3%.

4. Incentive available under Focus Product Scheme (FPS) raised from 1.25% to 2%.

5. Widens scope for products to be included for benefits under FPS. Additional
engineering products, plastic and some electronics get a look in.

6.Market Linked Focus Product Scheme (MLFPS) expanded by inclusion of products

like pharmaceuticals, textile fabrics, rubber products, glass products,auto
components, motor cars, bicycle and its parts.etc. 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. Common simplified application form introduced for taking benefits under FPS,
FMS, MLFPS and VKGUY.

9. Higher allocation for Market Development Assistance (MDA) and Market Access
Initiative (MAI)

10. To aid technological up gradation of export sector, EPCG Scheme at Zero Duty
has been introduced.

11. Jaipur, Srinagar and Anantnag have been recognised as „Towns of Export
Excellence‟ for handicrafts; Kanpur, Dewas and Ambur for leather products; and
Malihabad for horticultural products.

12. Export obligation on import of spares, moulds etc. under EPCG Scheme has
been reduced by 50%.

Submitted By: Himanshu Kumar

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 some
products from the North East.

Status Holders

15. To accelerate exports and encourage technological 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 pharmacy products) [subject to exclusions of current
beneficiaries under Technological Up gradation Fund Schemes (TUFS)]. This facility
shall be available up to 31 March, 2011.

16. Transferability for the Duty Credit scrips being issued to status holders under
paragraph 3.8.6 of FTP under VKGUY Scheme permitted on condition that scrips
would be utilized for the procurement of cold chain equipments 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 extended for the financial year 2010-11 in the
Budget 2009-10.

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

Submitted By: Himanshu Kumar

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 $ 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.

Agriculture 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 increased from 30% to 50%.

32. Export of tea has been covered under VKGUY Scheme benefits.

Submitted By: Himanshu Kumar

Pharmaceutical Sector

33. Export Obligation Period for advance authorizations issued with 6-APA as input
increased from existing 6 months to 36 months.

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.

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.

Submitted By: Himanshu Kumar

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 been extended to 90 days in case of USA.

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 period of 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.

Submitted By: Himanshu Kumar

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 18 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 Import Items has been published.

Submitted By: Himanshu Kumar

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.

Submitted By: Himanshu Kumar