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EXIM POLICY
EXIM POLICY OR FOREIGN TRADE POLICY is a set of guidelines and instructions and various policy decision taken by the government in the sphere of foreign trade i.e. with respect to import and export of the country. It is prepared and announced by the central government(Ministry OF Commerce) AND The Union Commerce Ministry, Government of India announces the integrated Foreign Trade Policy (FTP) in every five year. This is also called EXIM policy. The Foreign Trade Policy which was announced on August 28, 2009 is an integrated policy for the period 2009-14 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. Formulated under the Import & Export(control) Act, 1947 Now its known as Foreign Trade(Development & Regulation) Act, 1992 Headed by Director General of Foreign Trade
VOLUMES OF EXIM
EXIM policy is established in 5 volumes: 1) Export-import policy: provisions & schemes related to exports & imports. 2) Handbook of procedures(vol 1): export-import procedures to be followed by parties like exporter, importer, licenser etc. 3) Handbook of procedures(vol 2): input-output norms used for working out the proportion of various inputs used/required in the manufacturing of the resultant products so as to determine the advance license entitlement & DEPB (Duty Exemption Pass Scheme) rates
comprehensive references manual for finding out exportability or importability of products with references to the current exim policy. 5) Schedule of DEPB Rates (Vol 5): it provides a complete rate structure of DEPB(Duty Exemption Passbook Scheme).
CONT
Simplification of the application procedure for availing various benefits To encourage exports through a "mix of measures including fiscal incentives, institutional changes, procedural rationalization and efforts for enhancing market access across the world and diversification of export markets.
EXIM POLICY, APRIL 1998 Zero-duty Export Promotion Capital Goods (EPCG) scheme was extended to all software exporters Delegation of powers to regional licensing offices. Simplified procedures for clubbing of advance license schemes. EXIM POLICY, 1999-2000 The new export-import policy freed import of 894 items from licensing requirements. Physical controls on imports were removed 414 items were removed from the restricted list
EXIM POLICY, 2000-01 Special Economic Zones (SEZs) Sector-specific Packages Import Liberalisation
- Since 1879
THE SCORECARD
AREAS UNDER CONSIDERATION GLOBAL EXPORTS TARGET ACHEIVEMENTS
$ 200 BILLION
$168
GLOBAL MERCHANDISING GLOBAL SERVICES EXPORT (ONLY SERVICES) GOODS AND SERVICES
DOUBLE OUR SHARE FROM THE 2003-04 INCREASE SUBSTATIALLY INCREASE SUBSTANITALLY
0.83% TO 1.45%
1.4% TO 2.8%
0.92% TO 1.64
Import restrictions
Freely importable items are open general license category or free list of imports - anybody is allowed to bring in items listed under this category Exim policy prohibits import of certain products Prohibited list contains sensitive items: explosives banned for security reasons. Items banned for environment and pollution-related aspects Wildlife and related products can only be imported for specific purpose with prior permission E.G. Urea can be imported only by MMTC and STC, the government's trading arms Gold, in bulk, by specified banks like SBI , some foreign banks , designated agencies Earlier sugar, edible oil, wheat and rice used to be imported by the government only. liberalization led to freely importable items
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.
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. 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.
DUTY EXEMPTION SCHEMES Enable duty- free import of inputs required for export production. Consumables like fuel, oil, energy, catalysts, etc. too are included DUTY REMISSION SCHEMES DEPB-introduced in 1997; grant of credit on post export basis as specified percentage of freight on board value of export made in freely convertible currency Duty free replenishment certificate(DFRC)-introduced on 1 April 2000; to provide the benefits of advance license on post-export basis.
ASSISTANCE TO STATES FOR INFRASTRUCTURE DEVELOPMENT FOR EXPORTS & OTHER ALLIED ACTIVITIES(ASIDE) The schemes provide an outlay for the development of export infrastructure, which is distributed among the states according to pre-defined criteria. i.e the schemes proposes to provide funds to state govts/union territories for export promotion 20% of funds remain with central govt. & 80% of the funds will be given to state govt.s/ union territories.
Scheme for Status Holders (Status Holders means star status holders) 1. Additional Duty Credit Scrip's shall be given to Status Holders @ 1% of the FOB value of past exports accelerate exports and encourage technological up gradation. 2. 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).
TECHNOLOGY UPGRADATION RE-FIXATION OF ANNUAL (EPCG Scheme) AVERAGE EXPORT OBLIGATION: Taking into account the decline in exports, the facility of Re-fixation of 1. Obligation under EPCG scheme Annual Average Export Obligation for a relaxed. particular financial year in which there is 2. To aid technological up gradation of decline in exports from the country, has export sector, EPCG Scheme at Zero been extended. Duty has been introduced. 3. Export obligation on import of spares, GREENPRODUCTS&TECHNOLOGI ES moulds etc. under EPCG Scheme has Support for Green products and products been reduced by 50%. from North East extended.
ANNOUNCEMENTS
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. However , 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).
BANS
ITEM
IRAQ
IRAN
COTE DIVOIRE
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 bankguarantee under EPCG 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 multi-functional nodal agencies. These agencies will be accredited by APEDA. Towns of export excellence-threshold limit 250 Cr.
payment of 50 % applicable export duty, Leather sector shall be allowed re-export of unsold imported raw hides and skins and semi finished leather from public bonded ware houses.
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%.
The claims under Focus Product Scheme, the requirement of " Handloom mark" was required earlier. This has been removed.
EOUs have been allowed to sell products manufactured by them in DTA (Domestic Tariff Area) 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. (This means that instead of 75% these units can sell up to 90 % of their products in the domestic markets)
EOU allowed to procure finished goods for consolidation along with their manufactured goods, subject to certain safeguards. Extension of block period by one year for calculation of Net Foreign Exchange earning of EOUs kept under consideration.
195
190 185 180 175 170 165 160 155 150
REALISTIC TARGET(BN $)
2004-09
REALISTIC TARGET(BN $)
2009-10 2010-11
2004-09
2009-10
2010-11
Future :
1. The short term objective policy is to arrest & reverse the declining trend of exports & to provide additional support especially to those sectors which have been hit badly by recession in the developing world. 2. Ministry set a policy objective of achieving an annual export growth of 15% with an annual export target of US$ 200 billion by march 2011. 3. In the remaining 3 years of this foreign trade policy upto 2014, the country should be able to come back on the high exports growth path of around 25% p.a.
4. By 2014, they expect to double Indias exports of goods & services. 5. The long term policy objective for the government is to double Indias share in global trade by 2020.
6. In order to meet these objectives, the government would follow a mix of policy measures including fiscal incentives, institutional changes, and procedural rationalizations and enhanced market access across the world & diversification of exports markets. 7. Improvements in infrastructure related to exports. 8. Bringing down transaction costs. 9. Endeavour will be made to see that the goods & services tax rebates all indirect taxes & levies on exports.