group no 15 (indian foreign trade policy)
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P R E S E N T E D B Y,
S WA P N I L G U P TA ( 4 0 4 )S AT YA J I T R A J A K ( 3 9 9 )
S A N D I PA N S A M A D D A R ( 3 9 8 )
Indian Foreign TradePolicy
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What is Foreign Trade Policy
Foreign Trade Policies are Government actions,
especially tariffs, import quotas, and exportsubsidies, designed to increase net exports bypromoting exports or restricting imports
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Advent of Foreign Trade Policy in India
In the year 1962, the Government of India appointed a specialExim Policy Committee to review the previous export import policies
Mr. V. P. Singh, the then Commerce Minister and announced the Exim
Policy on the 12th of April, 1985
Initially the EXIM Policy was introduced for the period of 3 years
After liberalization in 1991, tenure of policy was changed to 5 years
In 2004, EXIM policy was replaced by Foreign Trade Act Policy of2004
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Objectives of EXIM Policy
To accelerate the economy from low level of economic activities to highlevel of economic activities
To stimulate sustained economic growth by providing access to
essential raw materials
To enhance the techno local strength and efficiency of Indianagriculture, industry and services
To generate new employment
To provide quality consumer products at reasonable prices.
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Governing Body of EXIM Policy
Foreign Trade (Development and Regulation Act), 1992
Union Minister of Commerce and Industry
Ministry of Finance (Directorate General of Foreign Trade)
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EXIM Policy 1992-1997
Introduced on April I, 1992
To liberalize imports and boost export
Duration 5 years
Amendments could be made by Central Government
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EXIM Policy 1997-2002
Simplified the procedures between exporters and the DGFT
Liberalization
Imports Liberalization
Export Promotion Capital Goods (EPCG) Scheme
Advance License Scheme
Duty Entitlement Pass Book (DEPB) Scheme
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EXIM Policy 2002 2007
Export and import of merchandise and services
To encourage economic growth by providing supply of essential rawmaterials, intermediates & services required for augmenting production
To improve the technological strength and efficiency of Indianagriculture, industry and services
To provide consumers with good quality products and services atinternationally competitive prices
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Indian Foreign Trade Policy (2004-2009)
The first Foreign Trade Policy was formed in 2004 for a period of 5 years
Two major objectives :
1. increasing the exports, as a promotion of GDP2. greater stress was laid on labor intensive exports like :
- Handloom- Handicrafts- Agriculture- Marine goods- Spices
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Duty Exemption Schemes of EXIM Policy2004-2009
Duty Drawback
Excise Duty Refund
Octroi Exemption
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Duty Remission Schemes of EXIM Policy2004-2009
Duty Entitlement Pass Book ( DEPB)
Duty Free Replenishment Certificate (DFRC) schemes
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Special Measures of EXIM Policy2004-2009
Duty Free Import Authorization (DFIA)
Export Promotion Capital Goods Scheme (EPCG)
Export Oriented Units (EOUs), Electronics Hardware Technology Parks(EHTPs), Software Technology Parks(STPs) And Bio-Technology Parks(BTPs)
Special Economic Zone (SEZ)
Free Trade & Warehousing Zones
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Special Economic Zone (SEZ)
Geographically distributed area or zones where the economic laws aremore liberal
Duty free enclaves for the purpose of trade, operations, duty and tariff
Self-contained and integrated having their own infrastructure andsupport services
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Indian Foreign Trade Policy (2009-2014)
The second 5 year Foreign Trade Policy was formed from 2009-2014
Two major objectives :1. Double the percentage share of global merchandize trade within 5
years
2. Use trade expansion as an effective instrument of economic growthand employment generation
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1. MARKET DIVERSIFICATION
26 new countries included in Focus Market Scheme (FMS)
Incentives under FMS increased from 2.5% to 3%
Market Linked Focus Product Scheme
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2. TECHNOLOGICAL UPGRADATION :
EPCG Scheme at zero duty
Towns of Export Excellence
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3. AGRICULTURE & VILLAGE INDUSTRY :
Vishesh Krishi and Gram Udyog Yojana
Import of restricted items
Import of pesticides Permitted
Single Window System introduced
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4. HANDICRAFTS :
Duty free import entitlement of tools, trimmings and embellishments was 5% of FOB
All handicraft exports were to be treated as special Focus productsand entitled to higher incentives
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5. GEMS & JEWELRY :
Import of gold of 8 k and above was allowed under replenishmentscheme
Duty free import entitlement of commercial samples was allowedupto Rs. 300,000
Personal carriage of Gems & Jewelry products was increased to US$5 million
Duty Drawback on export of gold jewelry
Diamond Bourse
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6. MARINE SECTOR :
Imports for technological upgradation under EPCG in fisheriessector
Duty free import of specified specialized inputs/chemicals andflavoring oils was allowed to the extent of 1% of FOB
Marine products are considered for VKGUY scheme
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7. ELECTRONICS & IT HARDWAREMANUFACTURING INDUSTRIES :
Exporters /Associations were entitled to utilize MAI & MDA Schemesfor promoting Electronics and IT Hardware Manufacturing industryexports
8. SPORTS GOODS & TOYS :
Duty free import of specified specialised inputs was allowed to theextent of 3 % of FOB
Sports goods and toys were to be treated as a Priority sector underMDA / MAI Scheme
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Promotional Measures of Foreign Trade Policy(2009-2013)
Assistance to States for Infrastructure Development of Exports(ASIDE)Market Access Initiative (MAI)Market Development Assistance (MDI)
Towns of Export Excellence (TEE)Brand Promotion & QualityExport & Trading HousesFocus Market Scheme (FMS)Focus Product Scheme (FPS)
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1. ASIDE :
Creation of new Export Promotion Industrial Parks/Zones
Setting up of electronics and other related infrastructure in exportconclave
Equity participation in infrastructure projects
Development of complementary infrastructure
Stabilizing power supply
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2. MARKET ACCESS INITIATIVE (MAI) :
Market studies/surveys Setting up of showroom / warehouse Participation in international trade fairs Displays in International departmental stores Publicity campaigns Brand promotion Testing charges for engineering products abroad Assistance for contesting Anti Dumping litigations
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3. MARKET DEVELOPMENT ASSISTANCE (MDA) :
Trade Fairs and Buyer Seller meets abroad or in India, and
Export promotions seminars
Financial assistance with travel grant is available to exporters
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4. TOWNS OF EXPORT EXCELLENCE (TEE) :
It is necessary to grant recognition to dynamic industrial clusters
Selected towns producing goods of Rs. 750 crore or more will benotified as TEE
Recognized associations of units will be provided financial assistanceunder MAI scheme
Common Service Providers in these areas shall be entitled for EPCGscheme.
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5. BRAND PROMOTION AND QUALITY :
India Brand Equity Foundation was set up by the Ministry ofCommerce on 11th July, 1996IBEF aims to promote India as a business opportunity by creatingpositive economic perceptions of India globally Aims to create international awareness of the Made in India
label in markets overseas
6 . EXPORT AND TRADING HOUSES
Merchant as well as Manufacturer Exporters, Service Providers,Export Oriented Units (EOUs) and Units located in SpecialEconomic Zones (SEZs), shall be eligible for status.
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7. FOCUS MARKET SCHEME (FMS) :
Following categories of export products/sectors shall be ineligible forDuty Credit Scrip:Supplies made to SEZ unitsService Exports
Diamonds and other precious, semi precious stonesGold, silver, platinum and other precious metalsJewelryOres and Concentrates
CerealsSugarCrude/Petroleum Oil & Crude/Petroleum based Products
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8. FOCUS PRODUCT SCHEME (FPS) :
Incentivise export of products having high export intensityemployment potential
Offset infrastructure inefficiencies and other associated costs
involved in marketing of these products
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Foreign Trade Policy (2014-2019)
The new Foreign Trade Policy 2014-19 is made product wise andlocation wise
Enhancing trade competitiveness
Indias share in world trade is expected to double from the presentlevel of 3% by the year 2020
Includes necessary measures to boost productivity
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Conclusion
India is focusing on increasing its export value by providing possibleassistance to the traders in the form of financial aid, initiatives,awards, promotional schemes, duty free schemes, etc.
India has reached a point where its exports to developed economies
cannot be increased so it has to focus on diversifying its market toless developed economies and remote areas.
It is important for India to take an initiative to diversify the exportmarkets to emerging markets of Africa, Latin America & Oceania
through appropriate policy instruments
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