With a view to doubling our percentage share of

global trade within 5 years and expanding

employment opportunities, especially in semi

urban and rural areas, certain special focus

initiatives have been identified for the agriculture,

handlooms, handicraft, gems & jewellery and

leather sectors.

Government of India shall make concerted efforts

to promote exports in these sectors by specific

sectoral strategies that shall be notified from time

to time.

Further Sectoral Initiatives in other sectors will

also be announced from time to time.

For the present, the thrust sectors indicated below

shall be extended the following facilities:

New Sectoral

Initiatives to be

announced

(i) Agriculture

   

(a)A new scheme

called the

Vishesh Krishi

Upaj Yojana

(Special

Agricultural

Produce

Scheme) for

promoting the

export of fruits,

vegetables,

flowers, minor

forest produce,

and their value

added products

has been

introduced

(Para 3.8).

   

(b)Funds shall be

earmarked

under ASIDE

for

development of

Agri Export

Zones (AEZ)

   

(c)Import of

capital goods

shall be

permitted duty

free under the

EPCG Scheme

   

(d)Units in AEZ

shall be

exempt from

Bank

Guarantee

under the

EPCG Scheme.

   

(e)Capital goods

imported under

EPCG shall be

permitted to be

installed

anywhere in

the AEZ.

   

(f) Import of

restricted

items, such as

panels, shall be

allowed under

the various

export

promotion

schemes .

   

(g) Import of

inputs such as

pesticides shall

be permitted

under the

Advance

Licence for

agro exports.

   

(h)New towns of

export

excellence with

a threshold

limit of Rs 250

crore shall be

notified.

 (ii) Handlooms :

   

(a)Specific funds

would be

earmarked

under MAI/

MDA Scheme

for promoting

handloom

exports

   

(b)Duty free

import

entitlement of

specified

trimmings and

embellishment

s shall be 5%

of FOB value of

exports during

the previous

financial year.

   

(c)Duty free

import

entitlement of

hand knotted

carpet samples

shall be 1% of

FOB value of

exports during

the previous

financial year.

   

(d)Duty free

import of old

pieces of hand

knotted

carpets on

consignment

basis for re-

export after

repair shall be

permitted.

   

(e)New towns of

export

excellence with

a threshold

limit of Rs 250

crore shall be

notified.

 (iii) Handicrafts:

   

(a)New Handicraft

SEZs shall be

established

which would

procure

products from

the cottage

sector and do

the finishing for

exports

   

(b)Duty free

import

entitlement of

trimmings and

embellishment

s shall be 5%

of the FOB

value of

exports during

the previous

financial year.

The

entitlement is

broad banded,

and shall

extend also to

merchant

exporters tied

up with

supporting

manufacturers.

   

(c)The Handicraft

Export

Promotion

Council shall be

authorized to

import

trimmings,

embellishments

and

consumables

on behalf of

those exporters

for whom

directly

importing may

not be viable.

   

(d)Specific funds

would be

earmarked

under MAI &

MDA Schemes

for promoting

Handicraft

exports.

   

(e)CVD is

exempted on

duty free

import of

trimmings,

embellishment

s and

consumables.

   

(f)New towns of

export

excellence with

a reduced

threshold limit

of Rs 250 crore

shall be

notified.

 (iv) Gems & Jewellery

   

(a) Import of gold

of 18 carat and

above shall be

allowed under

the

replenishment

scheme

   

(b)Duty free

import

entitlement of

consumables

for metals

other than

Gold, Platinum

shall be 2% of

FOB value of

exports during

the previous

financial year.

   

(c)Duty free

import

entitlement of

commercial

samples shall

be Rs 100,000.

   

(d)Duty free re-

import

entitlement for

rejected

jewellery shall

be 2% of the

FOB value of

exports

   

(e)Cutting and

polishing of

gems and

jewellery, shall

be treated as

manufacturing

for the

purposes of

exemption

under Section

10A of the

Income Tax Act

  (v) Leather and

Footwear

   

(a)Duty free

import

entitlement of

specified items

shall be 5% of

FOB value of

exports during

the preceding

financial year.

   

(b)The duty free

entitlement for

the import of

trimmings,

embellishment

s and footwear

components for

footwear

(leather as well

as synthetic),

gloves, travel

bags and

handbags shall

be 3% of FOB

value of

exports of the

previous

financial year.

The

entitlement

shall also cover

packing

material, such

as printed and

non printed

shoeboxes,

small cartons

made of wood,

tin or plastic

materials for

packing

footwear .

   

(c)Machinery and

equipment for

Effluent

Treatment

Plants shall be

exempt from

basic customs

duty.

   

(d)Re-export of

unsuitable

imported

materials such

as raw hides &

skins and wet

blue leathers is

permitted.

   

(e)CVD is

exempted on

lining and

interlining

material

notified at S.No

168 of Customs

Notification No

21/2002 dated

01.03.2002.

   

(f)CVD is

exempted on

raw, tanned

and dressed fur

skins falling

under Chapter

43 of ITC(HS).

Optimum

Development

programme for

Pragati Maidan

1B.2 In order to

showcase our

industrial and

trade prowess to

its best advantage

and leverage

existing facilities

to enhance the

quantity of space

and service,

Pragati Maidan

will be

transformed into a

world-class

complex with

visitor friendliness

ingress and

egress system.

The complex

utilisation will be

improved,

increased and

diversified. There

shall be brand

new , state-of-the-

art ,

environmentally-

controlled, air-

conditioned

exhibition areas,

and Permanent

Exhibition Marts.

In addition, a

large Convention

Centre to

accommodate ten

thousand

delegates will be

developed, with

multiple and

flexible hall

spaces, auditoria

and meeting

rooms with hi-tech

equipment. A

year-round Food

and Beverage

destination will be

developed, with a

large number of

outlets covering

all cuisines and

pricing levels.

There will be a

multi- level park

to accommodate

over nine

thousand vehicles

within the

envelope of

Pragati Maidan.

Indian Exim Policy

Home - Export Import Guide - Indian Exim Policy

In every five years, the Ministry of Commerce and Industry, Government of India, announces the Export-

Import (EXIM) policy. This is an effort towards the encouragement of foreign trade and creation of a

complimentary Balance of Payments. The EXIM policy, updated yearly on 31st of March, is followed from

1st April.

Some of the chief highlights of the current policy are:

1. Extension of the DEPB scheme till May, the next year.

2. Service tax will be refunded on maximum services

3. Extending Income tax benefit for EOUs.

4. Extension of FMS coverage and inclusion of ten more countries including Mongolia, Croatia,

Ghana, Colombia, Albania, etc.

5. Introduction of split-up facility

6. Payment of excise duty by export oriented units on monthly basis rather than consignment basis.

However, the central government reserves the right to amend any of the sections of this policy in public

interest.

Some of the focus initiatives of the policy are:

To have a greater share in the global trade and generate more employment opportunities, a number of focus

initiatives that have been identified for various sectors are:

Agriculture:

Some of the policies that have been introduced are-Vishesh Krishi and Gram Udyog Yojana. Moreover,

diverse export promotion schemes have allowed the use of export of certain restricted items. Import of

certain pesticides has been approved under the advance authorization schemes for export of agricultural

products.

Handloom:

MAI/MDA schemes have granted specific plans for the promotion of export of handloom items. Duty free

import on certain items has been conferred which has proved to be beneficiary. These include hand knotted

carpets.

Handicraft:

Establishment of new handicraft SEZs would enable the procurement of products from the cottage sector

and also help in the finishing for exports. It is also suggested that the import entitlement of machineries,

tools, trimmings and equipments will be 5% of the value of FOB for export that was recorded the previous

year. Import trimmings, consumables and embellishments are under the authorization of handicraft EPC.

Gems and Jewellery:

The replenishment scheme holds the authority to allow the import of 8K or above gold backed up by an

Assay certificate for the specification of weight, alloy content and purity. Several import duties have been

revised for jewellery, cut and polished diamonds, marine sector, electronics, leather and footwear, etc.

This site provides comprehensive information on Exim Policy India. The site also focuses on India's achievements as a result of its well crafted modern Exim policy.

The major points of Exim Policy India is discussed as hereunder for each and every export sectors and schemes -

Service Duty free import facility for service sector having a minimum foreign exchange earning of Rs.10 lakhs. The duty free entitlement shall be 10% of the average foreign exchange earned in the preceding 3 licensing years.

Agro

Corporate sector with proven credential will be encouraged to sponsor Agri Export Zone and to provide services such as provision of pre/post harvest treatment and operations, plant protection, processing, packaging, storage and related R&D.

Status Holders

Duty-free import entitlement for status holders having incremental growth of more than 25% in FOB value of exports. It shall be 10% of the incremental growth in exports and can be used for import of capital goods, office equipment and inputs.

Hardware & Software

To promote growth of exports in embedded software, hardware duty free import for testing and development purposes allowed. Hardware upto a value of US$ 10,000 shall be allowed to be disposed off. 100% depreciation to be available for 3 years.

Gem & Jewelery Sector

Diamond & Jewelery Dollar Account for exporters dealing in purchase/sale of diamonds and diamond studded jewelery. Gem & Jewelery units in SEZ and EOUs can receive precious metal i.e Gold/silver/platinum prior to exports or post exports equivalent to value of jewelery exported.

Export Clusters

Upgradation of infrastructure in existing clusters/industrial locations under the Department of Industrial Policy & Promotion (DIPP) scheme to increased.

Rehabilitation of Sick Units

Steps for for revival of sick units and extension of export has been modified.

Removal of Quantitative Restrictions

Import of 69 items covering animal products, vegetables and spices, antibiotics and films removed from restricted list.

Special Economic Zones

Sales from Domestic Tariff Area (DTA) to SEZs to be treated as export. Foreign bound passengers will now be allowed to take goods from SEZs to promote trade, tourism and exports. Export/import of all products through post parcel/courier by SEZ units will now be allowed. SEZ units will now be allowed to sell all products including gems and jewelery through exhibitions and duty free shops or shops set up abroad.

EOU of Exim Policy India

Agriculture/Horticulture processing EOUs will now be allowed to provide inputs and equipments to contract farmers in DTA. Period of utilization of raw materials prescribed for EOUs increased from 1 year to 3 years. Export/import of all products through post parcel/courier by EOUs will now be allowed. EOUs will now be allowed to sell all products including gems and jewelery through exhibitions and duty free shops or shops set up abroad.

EPCG of Exim Policy India

Shall allow import of capital goods for pre-production and post-production facilities also. To facilitate upgradation of existing plant and machinery, import of spares shall also be allowed. To facilitate diversification into the software sector.

DEPB of Exim Policy India

Facility for provisional DEPB rate introduced to encourage diversification and promote export of new products.

DFRC of Exim Policy India

Duty Free Replenishment Certificate scheme extended to deemed exports to provide a boost to domestic manufacturer. Value addition under DFRC scheme reduced from 33% to 25%.

Advance License

Standard Input Output Norms for 403 new products notified in Exim Policy India. Anti-dumping and safeguard duty exemption to advance license for deemed exports for supplies to EOU/SEZ/EHTP/STP.

Transaction Cost Reduction

Applications filed online shall have a 50% lower processing fee as compared to manual applications is notified in Exim Policy India.

Other benefits extended by new Exim Policy India are -

Actual user condition for import of second hand capital goods upto 10 years old dispensed with. Reduction in penal interest rate from 24% to 15% for all old cases of default under Exim Policy. Export of free of cost goods for export promotion @ 2% of average annual exports in preceding three years subject to ceiling of Rs.5 lakh permitted.

INTRODUCTION

This Annual Supplement is the second in the series supplementing the Foreign

Trade Policy 2004-09. In line with Government’s promise of a stable Foreign

Trade Policy regime, this year’s supplement (in the same way as last year) does

not alter the broad contours of the main Policy. However, recognizing the

dynamic nature of international trade and the consequent need for periodic

realignment of our international trade strategies, contemporary issues have to

be addressed from time to time, and this is what this initiative does.

The changes in the Annual Supplement resulted from the inputs received

through interactive sessions with various Export Promotion Councils, Industry

organizations, Apex Chambers of Commerce & Industry and sister Departments

of Government. The Board of Trade has emerged as an effective institutional

mechanism and idea-generator for the FTP. A number of useful inputs have

been obtained through the Working and Study Group reports and brain

storming sessions of the Board of Trade.

2.TRADE PERFORMANCE

When the Government launched the new Foreign Trade Policy in August 2004,

it set out with the ambitious objective of doubling India’s percentage share of

global merchandize trade within five years. Merchandize trade in the very first

year of the policy period grew at the rate of 26%. This year’s export figures are

unprecedented. I am delighted to share with you that merchandize exports

have crossed the ‘magic figure’ of 100 billion dollars. In fact, they have

touched the ‘auspicious figure’ of 101 billion dollars. The annual growth rate

is 25%.

Handicraft BuyersHandicraft Importers Worldwide

Exim MarketExport, Import Market Information & Data.

Exim SurveryWorldwide Exim Market database

Lamp BusinessLamps & Lighting Fixtures List.

Gems BuyersGems & Jewellery Buyers around the World

Rubber ImportersRubber & Rubber Products Directory

Giftware BuyersGiftware Buyers & Suppliers

South Korea PagesSouth Korea Yellow Pages

Our imports have grown 32%, and stand at 140 billion dollars – but 43 billion is

our oil bill. Thus, our non-oil imports are 97 billion dollars, a full 4 billion lower

than our exports. On the non-oil front, therefore, we have a positive balance of

trade.

3.SECTORAL EXPORT GROWTH

Exports from many sectors have surpassed our expectations. Project goods

exports grew at the rate of 173%. Exports of non-ferrous metals, guar gum

meal, computer software in physical form, rice, pulses, dairy products, all

recorded a growth surpassing 50%. Commodities like man-made staple fibres,

cosmetics and toiletries, iron-ore, coffee, processed food and transport

equipment grew at the rate above the average, i.e. more than 25% during this

period.

4.MARKET SHARE IN DIFFERENT COUNTRIES

India is steadily increasing its share in important markets. Growth in exports to

UK has been 30%, to Singapore (with which we implemented the CECA) 54%.

India’s exports to South Africa grew at 44% while for China the growth rate is

35%. We shall be releasing detailed statistics on all this in the form of a Ready

Reckoner next month, after exact figures come in.

5.‘FOCUS PRODUCT’ & ‘FOCUS MARKET’ SCHEMES

The other chief objective of the Foreign Trade Policy was providing a thrust to

employment generation, particularly in semi-urban and rural areas. We are

therefore introducing two new schemes to nurture this. We realized that

certain industrial products can generate large employment per unit of

investment compared to other products, and promoting their export would in

turn give a thrust to their manufacture. This realization led to the formulation of

the ‘Focus Product Scheme’ which aims to promote such exports.

The Scheme allows duty credit facility at 2.5% of the FOB value of exports on

fifty percent of the export turnover of notified products, such as value added

fish and leather products, stationery items, fireworks, sports goods, and

handloom & handicraft items.

It is also necessary to penetrate markets, especially to which our exports are

comparatively low. Some of our competitors are aggressively ‘occupying space’

in Latin America, in Africa and other destinations which Indian exporters have

unfortunately been neglecting, perhaps due to high freight costs &

undeveloped networks. But these are the markets of the future, and it is of

strategic necessity that we enlarge our market share here.

For this we have a ‘Focus Market Scheme’ which allows duty credit facility at

2.5% of the FOB value of exports of all products to the notified countries.

The scrip and the items imported against it for both these schemes would be

freely transferable.

These two Schemes would replace the Target Plus Scheme.

To take the benefits of foreign trade further to rural areas, the Vishesh Krishi

Upaj Yojana is being expanded to include village industries based products for

export benefits, and it is therefore renamed as Vishesh Krishi Upaj aur Gram

Udyog Yojana – a rather long name, but one which adequately reflects its

intent and coverage.

6.PROMOTING SERVICES EXPORT

While Services account for 52% of our GDP, our total services trade – exports &

imports – totals more than 100 billion dollars. Expansion of the Services sector

is vital for providing jobs to urban educated youth. In the WTO too we are

actively engaged in the Services negotiations. A number of features have been

added in the Served from India Scheme to encourage service exports.

The Scheme ill now allow transfer of both the scrip and the imported input to

the Group Service Company, whereas earlier transfer of imported material only

was allowed.

7.INDIA EMERGING AS GEM AND JEWELLERY HUB

Because of a rich tradition of craftsmanship, enterprise and availability of

skilled, low cost manpower India has the potential to become an international

hub for Gems and Jewellery. We have already introduced some measures in the

Budget. The diamond trade, which was concentrated in Antwerp, is moving out

– to Dubai, to Tel Aviv. I want Mumbai be right up there, and not lose out to its

fellow Asian cities. This Supplement now introduces a number of measures for

facilitating export of value added products catering to changing needs of the

market and facilitating easier product movement across the borders and

allowing import of precious metal scrap for refining.

(a) We have large unutilized melting, refining and jewellery-making

production capacity. To enable such capacities to be used in a productive

manner, import of precious metal scrap and used jewellery will now be

allowed for melting, refining and re-export of jewellery. However, such

import will not be allowed through hand baggage.

(b) Gems & Jewellery exporters will now be allowed to re-import the rejected

precious metal jewellery subject to refund of duty exemption benefits on

the inputs only and not the duty on jewellery as was being done earlier.

(c) Many a times exporters faced the dilemma of unsold jewellery in the

foreign markets because of changing designs and other such factors. To

overcome this problem, Gems & Jewellery exporters will now, be allowed

to export jewellery on consignment basis.

(d) Treatment of cut and polished precious and semi-precious stones enhance

the quality and afford higher value in the international market. For this

purpose, Gems & Jewellery exporters will now be allowed to export such

items for treatment and subsequent re-import, within a period of 120

days.

(e) Increase of gold and silver prices in the international market over the past

few years has made the present value addition norms on export of gold &

silver jewellery unrealistic. The value addition norm for such items is being

reduced from 7% to 4.5%.

Such measures will help Indian Gems and Jewellery to sparkle on the world

stage.

8.AUTO-COMPONENTS

India is on the move, metaphorically as well as literally. We not only have the

fastest growing automobile market in the world, but India is fast emerging as

an important centre for sourcing auto-components. The FTP already extends

a number of facilities for the sector. We shall now allow import of new vehicles

by auto component manufacturers for R & D purposes without homologation.

This is necessary to give our R&D labs easier access to the latest technologies

current in the auto component industry.

9.AVIATION SECTOR

Supplies of stores (food, beverages and other supplies) and refueling of long

distance flights has emerged as a big business opportunity. Currently, most

airlines replenish supplies or refuel at Thailand, Malaysia or Singapore. Since

these supplies were not treated as exports in India and the suppliers could not

obtain the duty neutralisation benefits available to other export products the

store supplies from India were not competitive enough. We have decided to

treat such supplies on an equal footing with other exports, qualifying for

benefits under various Export Promotion Schemes. This will hopefully enable

India to offer competitive fuel prices and will attract mid route stops of the

international flights.

10.MARINE SECTOR

Having done something for the ‘land’ and the ‘air’, we felt we must do

something for the ‘sea’ too! We had already brought in some benefits for

shrimp and tuna fishing through the budget. Now the list of specialized inputs

used in the marine sector has been expanded to include additional items of

chemicals and other additives within the present duty free entitlement of 1%.

11.DUTY FREE IMPORT AUTHORISATION SCHEME

Export production requires use of many inputs in small quantities. Even though

such inputs are allowed for import without payment of customs duty under

Advance Licensing Scheme, exporters generally do not import them because of

lack of economies of scale and are forced to source them locally at a higher

price. The existing Duty Exemption Schemes have been of little help in such

cases because of design limitations.

To address the issue, the salient features of the Advance Licensing scheme

(which allows imports before exports) and Duty Free Replenishment Certificate

(which allows transferability of import entitlements) have been clubbed to

evolve a new scheme named Duty Free Import Authorisation Scheme. The

new scheme offers the facility to import the required inputs before the exports.

It allows transferability of scrip once the export obligation is complete.

Imports made under this authorisation will be exempt from payment of basic

custom duty, additional customs duty, education cess, anti-dumping duty and

safeguard duty, if any. The scheme will come into effect from 1st May, 2006.

12.SERVICE TAX & FRINGE BENEFIT TAX

The incidence of un-rebated Service Tax and Fringe Benefit Tax on exports will

be factored in the various duty neutralisation and remission schemes.

13.EPCG SCHEME

We have introduced certain flexibilities in the conditions relating to

maintenance of average export performance under the EPCG Scheme, and also

in the extension of export obligation period by 2 years, based on certain

conditions.

14.EOUs

EOUs account for a substantial portion of our exports. Just because we have the

new SEZ Act in place, it does not mean that our EOUs can be neglected. On the

contrary, we will continue to nurture them.

In order to facilitate the smooth functioning of the EOU units, Development

Commissioners will fix time limits for finalizing the disposal of matters.

EOU units in the textile sector are allowed to dispose of the left over fabrics

upto 2% of CIF value of imports, on consignment basis. Settling accounts for

every consignment is complex and time consuming. It has therefore been

decided to allow disposal of left over material on the basis of previous year’s

imports.

15.GENETICALLY MODIFIED (GMO) MATERIAL

For the benefit of the consumer clear guidelines for import of Genetically

Modified Material are being laid down. While making such imports, products

which have been subjected to Genetic Modification will have to carry a

declaration stating the fact.

16.INTEREST PAYMENT ON REFUNDS

It has been decided that interest for delayed payment of refunds would be

made by the Government to ensure accountability and cut delays.

17.TRADE FACILITATION

Clearance of import or export consignments are held up for want of test reports

of samples drawn at the time of import or export. Therefore, to accelerate

cargo clearances, it has been decided to allow pre-shipment test certificates

from accredited international agencies in lieu of demanding only test reports.

18.EDI INITIATIVES

We are committed to simplifying procedures relating to international trade and

putting in place an exporter friendly regime for obtaining import authorizations

and disbursement of export linked incentives. A web based online system of

filing import & export applications is functional.

Requests for obtaining authorizations relating to Advance Licence, EPCG

Licence and DEPB are to be filed on the DGFT website with a digital signature

and payment of licence fee through the Electronic Fund Transfer mode. No

manual applications and supporting documents are required to be

submitted. All EDI applications are processed within one working day. We

propose to take more EDI initiatives in the next six months to take the process

further.

19.CONCLUSION

Our FTP has served us well. What else could account for the ‘grand leap

forward’ by our exports? Within just two years we have jumped 60%, from 63

billion dollars to 101 billion! But the real congratulations are due not to us – we

have only prepared a document – but to you the exporters, the businessmen,

the traders, the entrepreneurs. It is you who have given this policy flesh and

blood and meaning. I assure you, my Ministry will continue to work closely with

you all, to continue to energise and invigorate the national economy, so that

our Prime Minister’s vision of double-digit growth is achieved sooner rather than

later.

Thank you.