exim policy of india
TRANSCRIPT
EXIM Policy of India
Ranjan Singh (MT14IND018)Saransh Agrawal(MT14IND022)
Mechanical Engineering DepartmentVisvesvaraya National Institute of Technology,
Nagpur
Contents
What is EXIM policy? Brief history about EXIM Objectives of EXIM policy Documents in Indian EXIM Policy Indian imports and exports Comparison of Post and Pre 90’s imports and exports EXIM policy 2009-2014 Highlights of EXIM Policy 2015-2020
What is EXIM policy? Also knows as Foreign Trade Policy The foreign trade of India is guided by the Export-Import policy of India The Ministry of Commerce and Industry, Government of India,
pronounces the Indian EXIM policy or Export-Import policy of India.
It contains policies in the sphere of Foreign trade i.e. with respect to import & export from the country and more especially export promotion measures, policies and procedure related to it.
Export means selling abroad and import as bringing into India, any goods and services.
The Government of India advises the Exim Policy of India for a phase of five years under Section 5 of the Foreign Trade Development and Regulation Act, 1992.
The Exim Policy is renewed every year on the 31st of March and the revisions, improvements and new proposals become effective from 1st April of every year.
Brief History about EXIM
In the year 1962, the Government of India selected a special Exim Policy Committee to review the government preceding policies of export import (Indian Exim policy).
The committee was afterward permitted by the Government of India. Mr. V. P. Singh, the then Commerce Minister and pronounced the new Exim Policy of India on the 12th of April, 1985.
Primarily the Export-Import Policy of India was launched for the period of three years with main intention to boost the export business in India.
Objectives of EXIM Policy
To establish the framework for globalisation. To promote the productivity, competitiveness of Indian industry. To encourage the attainment of high & internationally accepted standards of quality. To increase export by facilitating access to raw materials,
intermediate components, consumables and capital goods from the international market
To generate new employment. To provide quality consumer products at reasonable prices.
Indian top Imports and Exports Agricultural products Automobiles Chemicals Food and beverage
products Industrial goods Pharmaceuticals and biotechnology Defense products, etc.
India’s Foreign Trade
India’s share in Global Trade
According to the WTO, in merchandise trade, India was the 19th largest exporter in the world with a share of 1.7 percent and the 12th largest importer with a share of 2.5 percent in 2013.
In commercial services, India was the 6th largest exporter in the world with a share of 3.2 percent and the 9th largest importer with a share of 2.8 percent.
Comparison of Pre 90’s & Post 90’s Exim Policy
Year Import (cr.)
Exports
(cr.)
Balance of trade (cr.)
Remarks
1948-51
650 647 -3 Excess of imports due to pent-up-demand of war, shortage of food and raw material due to partition, etc.
1951-56
730 622 -108 Trade deficit was largely due to programme of industrialization which gathered momentum and pushed up the import of capital goods
1956-61
1080 613 -467 Excess of import due to setting of steel plants, heavy expansion & renovation on railways & modernization of many industries.
Comparison of Pre 90’s & Post 90’s Exim PolicyYear Impo
rts (cr.)
Exports
(cr.)
Trade balan
ce (cr.)
Remarks
1961-66
1224 747 -477 Excess imports due to defence needs caused by aggression by China & Pakistan, rapid industrialization, need of food grains due to failure of crops
1985-90
28,874
18033
-10841 Huge trade balance compelled government to approach for loan to World Bank/IMF
1990-92
45522
38300
-7222 Push was given to export, but as a consequence of Gulf war govt. failed to curb imports. Govt. introduced a no. of measures but failed to boost exports.
Comparison of Pre 90’s & Post 90’s Exim Policy
Year Imports
(cr.)
Exports
(cr.)
Trade balan
ce (cr.)
Remarks
1992-01 140740 118252 -22488 In 1992-01,slow down in exports due to-•Depressed nature of world markets.•Saturation of developed countries •Increased protectionism by industrialized countries in area of textile and clothing.•Increasing competition from China & Taiwan.•In 2000-01 export was largely due to rupee depreciation along with further trade liberalization, more openness to foreign investment in EOU sectors like IT
Comparison of Pre 90’s & Post 90’s Exim Policy
Year Imports (US $mn)
Exports (US $mn)
Trade bal. (US $mn)
Remarks
2002-03
65422 52512 -12910
Rise in oil imports, food and allied products, capital goods
2003-04
80177 64723 -15454
Exim policy gave massive thrust to exports by Duty free import facility for
service sector up to earning 10lakh foreign exchange
Liberalization of duty exemption scheme
Besides all these measures, trade balance is high because of imports of petroleum products.
Export Import Policy, 2009-14 Legal Framework
General Provisions regarding Import and Export Special Focus Initiatives Promotional Measures Duty Exemption / Remission Schemes Export Promotion Capital Goods Scheme Export Oriented Units (EOUs) etc Special Economic Zones Deemed Exports
Aims is 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.
Targets
Export Target : $ 200 Billion for 2010-11
Export Growth Target: 15 % for next two year and 25 % thereafter.
Legal Framework The Foreign Trade Policy (FTP) 2009-14 operated with
effect from 27th August 2009 till 31st March 2014 An annual supplement is issued and forms part of the FTP. The Central Government can make any amendment in the
FTP by issuing a notification in the public interest Authorizations issued before commencement of FTP shall
continue to be valid for the purpose and duration for which such authorization was issued
In case an export or import which is permitted freely under FTP, is subsequently subjected to any restriction or regulation, such export or import will ordinarily be permitted not withstanding such restriction or regulation.
General Provisions Exports and Imports free unless regulated Compliance of Imports with Domestic Laws
The norms applicable to domestically produced goods shall apply to imports, unless specifically exempted
Interpretation of Policy The decision of DGFT shall be final and binding on all matters relating
to interpretation of policy Procedure
DGFT may, specify procedure to be followed by an exporter or importer or by any licensing/ regional authority or by any other authority
Exemption from Policy / Procedure DGFT may exempt any person or class or category of persons from any
provision of FTP or any procedure and may, while granting such exemption, impose some conditions
Principles of Restriction Protection of public morals Protection of human, animal or plant life or health Protection of patents, trademarks and copyrights, and the prevention of
deceptive practices
General Provisions Prevention of use of prison labour Protection of national treasures of artistic, historic or archaeological
value Conservation of exhaustible natural resources Protection of trade of fissionable material or material from which they
are derived; and Prevention of traffic in arms, ammunition and implements of war
Export/Import of Restricted Goods/Services ‘Restricted’ goods / services may be exported or imported only in
accordance with an Authorization / Permission/ License Terms and Conditions of a license / Certificate /
Permission / AuthorizationEvery Authorization shall be valid for prescribed period of validity and shall contain such terms and conditions as may be specified by Regional Authority (RA), which may include:(a) Description, quantity and value of goods;(b) Actual User condition;(c) Export obligation;(d) Minimum value addition to be achieved; and(e) Minimum export / import price
General Provisions
Importer-Exporter Code (IEC) Number is mandatory unless specifically exempted
Transit Facility shall be regulated in accordance with bilateral treaties between India and those countries
Actual User Condition Capital goods, raw materials, intermediates, components,
consumables, spares, parts, accessories, instruments and other goods, which are importable without any restriction, may be imported by any person. However, if such imports require an Authorization, actual user alone may import such goods unless actual user condition is specifically dispensed with by DGFT
Second Hand Goods Import of second hand goods, except second hand capital
goods, shall be restricted for imports and may be imported only in accordance with the provisions of FTP, ITC(Indian Trade Classification) (HS), HBP v1(Handbook of Procedures), Public notice or an Authorization in this regard. Import of re-manufactured goods shall be allowed only against a license
General Provisions Import of Gifts shall be ‘free’ unless otherwise specified/
restricted Passenger Baggage
These may be imported as part of passenger baggage without an Authorization- household goods and personal effects, samples of items that are freely importable, exporters coming from abroad are also allowed to import drawings, patterns, labels, price tags, buttons, belts, trimming and embellishments required for export
Import on Export basis Freely exportable new or second hand capital goods,
equipments, components, parts and accessories, containers meant for packing of goods for exports, jigs, fixtures, dies and moulds may be imported for export without an Authorization on execution of BG(Bank Guarantee) with Customs Authorities
General Provisions
Clearance of Goods from Customs Goods already imported / shipped / arrived, in advance, but not
cleared from Customs may also be cleared against an Authorization issued subsequently
Private / Public Bonded Warehouses for Imports Private / Public bonded warehouses may be set up in
DTA(Domestic Tariff Area). Any person may import goods, except prohibited items, arms and ammunition, hazardous waste and chemicals and warehouse them in such bonded warehouses. Such goods may be cleared for home consumption whenever required. Customs duty as applicable shall be paid at the time of clearance.
Free Exports All goods may be exported without any restriction except to
the extent that such exports are regulated by ITC (HS) or any other provision of FTP or any other law for the time being in force. DGFT may however, specify through a public notice such terms and conditions according to which any goods, not included in ITC(HS), may be exported without an Authorization
Special Focus InitiativesThe Chapter on Special Focus
Initiatives is broadly classified into:
Market Diversification
Technological Upgradation
Support to status holders
Agriculture and Village Industry
Handlooms
Handicrafts
Gems & Jewellery
Leather and Footwear
Marine Sector
Electronics and IT Hardware Manufacturing Industries
Sports Goods and Toys
Green products and technologies
Incentives for Exports from the North Eastern Region
Special Focus Initiatives
Special Focus Initiatives
Special Focus Initiatives
Promotional Measures Assistance to States for Developing Export Infrastructure
and Allied Activities (ASIDE) The objective of scheme is to establish a mechanism for involving the
State governments to participate in funding of infrastructure critical for growth of exports by providing export performance linked financial assistance to them
Market Access Initiative (MAI) Financial assistance is provided for export promotion activities on focus country, focus
product basis. The Government may provide financial assistance ranging from 25% to 100% of total cost. A whole range of activities can be funded under MAI scheme. These include:
1) Market survey/studies
2) Setting up of showroom houses
3) Participation in international trade fairs
4) Brand promotion
5) Publicity campaigns, etc.
Promotional Measures Market Development Assistance (MDA)
Financial assistance is provided for a range of export promotion activities implemented by EPCs and Trade Promotion Organizations by way of participation in Trade Fairs, Buyer Seller meets, Export promotion seminars etc.
Brand Promotion and Quality The primary objective is to promote and create
international awareness of the “Made in India” label in markets overseas
Test Houses Central Government will assist in modernization and up
gradation of test houses and laboratories to bring them at par with international standards
Promotional Measures Export and Trading Houses: Status Category
Served From India Scheme (SFIS)
Focus Market Scheme (FMS)
Focus Product Scheme (FPS)
Market Linked Focus Products Scrip (MLFPS)
Status Holders Incentive Scrip (SHIS)
Incremental Exports Incentivization Scheme
Vishesh Krishi And Gram Udyog Yojana (VKGUY)
Duty Exemption/Remission SchemesThe schemes initiated by the Government under this
category are as follows:
Export Promotion Capital Goods Scheme (EPCG)
Advance Authorization Scheme
Duty Free Import Authorization Scheme (DFIA)
Duty Entitlement Passbook (DEPB) Scheme
Duty Drawback (DBK) Scheme
Export Promotion Capital Goods Scheme (EPCG)
This scheme has been discussed in Foreign Trade Policy under following headings:
Zero duty EPCG Scheme
Concessional 3% duty EPCG Scheme
EPCG for projects
EPCG for Retail Sector
EPCG Authorization for Annual Requirement
Export Obligation
Provisions for BIFR Units
Export Promotion Capital Goods Scheme (EPCG)
EPCG for agro units
Indigenous Sourcing of capital goods and benefits to domestic supplier
Fixation of Export Obligation
Technological Up gradation of existing EPCG machinery
Incentives for Fast Track Companies
EPCG for Green Technology Products -reduced EO
EPCG scheme – Eligibility Criteria Scheme covers manufacturer exporter, merchant exporter
and service provider
Manufacturer exporter : A person who exports goods manufactured by him or intends to export such goods
Merchant exporter : A person engaged in trading activity and exporting or intending to export such goods
Service provider : A person providing Supply of a service from India to other country
Supply of a service from India to the service consumer of any other
country in India
Supply of a service from India through commercial / physical presence in
the territory of any other country
Supply of a service in India relating to exports paid in free foreign exchange or in Indian Rupees which are otherwise considered as having being paid for in free foreign exchange by RBI.
Export Promotion Capital Goods (EPCG) Scheme also covers a service provider who is designated / certified as a Common Service Provider (CSP) by the DGFT
Exports by Users of the common service, to be counted towards fulfillment of EO of the CSP
A 100 % Bank Guarantee equivalent to the portion of duty foregone by users of CSP apportioned in terms of quantum of export obligation is to be discharged.
As regards details of users, the CSP is required to inform to the concerned Regional Authority prior to exports, and the quantum of Bank Guarantee shall be equivalent to duty foregone amount and BG can be given by CSP or any one of the users or a combination thereof, at the option of CSP.
EPCG scheme – Eligibility Criteria
EPCG scheme–Procurements allowed Service : It includes all the tradable services covered under
General Agreement on Trade in Services and earning free foreign exchange (Refer Appendix 10 ‘List of services’ of FTP)
Imports allowed under the EPCG scheme
Capital goods for pre production, production and post production activities
Spares (including refurbished/ reconditioned spares), tools, jigs, fixtures, dies, moulds and components used for assembly or manufacture of capital goods
Second hand capital goods also allowed
Restricted imports
Import of motor cars, sports utility vehicles allowed only to hotels, travel agents, tour operators, golf resorts etc
Import of restricted items under the ITC-HS allowed only subject to approval from EFC at Headquarters.
EPCG scheme–Procurements allowed Domestic procurements also allowed
EPCG license holder required to file a request with the Regional Authority for invalidation of direct imports and allowing domestic procurements
Domestic supplier entitled to ‘deemed exports’ benefit Deemed exports benefit include refund of terminal excise
duty However, for EO computation, duty saved would be
notional customs duty on FOR
Imports subject to Actual user condition Goods can be imported only by the actual user
Post Export EPCG Scheme Exporters if they choose to, may import Capital Goods on
payment of duty in cash and subsequently receive duty credit scrip on completion of export obligation.
Thus there would be no duty remission / duty exemption at the time of import of the Capital Good (CG).
Applicant will have to inform the Regional Office of DGFT (RA) about the import of CG and based on which RA will fix export obligation.
Since the duties have been paid upfront at the time of import of CG, the EO would be 85 % of normal EO.
Export Of Products From North East To promote manufacturing activity and employment in the
North Eastern Region of the country, export obligation under the EPCG Scheme shall be 25% of the normal export obligation.
However, export of specified products through notified Land Customs Stations of North Eastern Region shall be provided additional incentive to the extent of 1% of FOB value of exports.
Special Economic Zones (SEZ)This Chapter is governed by the Special Economic Zone Act,
2005.
The main objectives of the SEZ Act are: Generation of additional economic activity
Promotion of exports of goods and services
Promotion of investment from domestic and foreign sources
Creation of employment opportunities
Development of infrastructure facilities
The SEZ Rules provide for: Simplified procedures for development, operation, and maintenance of
the Special Economic Zones and for setting up units and conducting
business in SEZs
Single window clearance for setting up a unit in a Special Economic
Zone
Special Economic Zones (SEZ) Single Window clearance on matters relating to Central as well
as State Governments
The incentives and facilities offered to the units in SEZs for attracting investments into the SEZs, including foreign investment are:
Duty free import/domestic procurement of goods for
development, operation and maintenance of SEZ units
100% Income Tax exemption on export income for SEZ units
under Section 10AA of the Income Tax Act for first 5 years,
50% for next 5 years thereafter and 50% of the ploughed back
export profit for next 5 years
External commercial borrowing by SEZ units upto US $ 500
million in a year without any maturity restriction through
recognized banking channels
Exemption from Central Sales Tax
Special Economic Zones (SEZ) Exemption from Service Tax
Single window clearance for Central and State level
approvals
Exemption from State sales tax and other levies as
extended by the respective State Governments
Highlights of EXIM Policy 2015-2020 1st April 2015 to 31st March 2020. Vision, Mission and objectives:• The vision is to make India a significant partner
in world trade by 2020.• Government aims to increase India’s exports of
merchandise and services from USD 465.9 billion in 2013-14 to approximately USD 900 billion by 2019-20.
• Raise India’s share in world exports from 2 percent to 3.5 percent.
• Initiatives such as “Make in India”, “Digital India” and “Skills India” to create an “Export Promotion Mission” to provide a stable and sustainable policy environment for foreign trade.
The Mega Agreements: Implications for India
• Trans Pacific Partnership, • Trans-Atlantic Trade and Investment Partnership
and • Regional Comprehensive Economic Partnership
(RCEP)These will add a completely new dimension to the global trading system.
Market Strategy India’s future bilateral/regional trade engagements will
be with countries that are not only promising markets but also major suppliers.
Employment-generating sectors such as textiles, agriculture, leather and gems & jewellery will continue to receive major attention for promoting exports to the US market.
India will focus trade promotion activities on new products with higher value addition particularly in the categories of defence equipment, medical equipment, construction material, processed foods, as also services.
India is negotiating Comprehensive Economic Cooperation/Partnership Agreements with Australia and New Zealand.
Another focus area is South-East Asia. Trade integration with the CLMV (Cambodia, Lao PDR, Myanmar and Vietnam), to enable the Indian private sector to set up manufacturing hubs in this region
Product strategy The focus will be on promoting exports of
high value products with a strong domestic manufacturing base, including engineering goods, electronics, drugs and pharmaceuticals.
Government aims to encourage and promote hi-tech products and, as a first step, certain products have been identified for a special focus for the duration of the policy.
The potential of the MSME sector, the problems it faces and its requirements have been kept in view while framing the FTP.
The Services Sector Efforts will be made to gain effective market access
abroad through comprehensive economic partnership agreements with important markets.
A Global Exhibition on Services will be held annually, which will provide a forum for showcasing India’s strengths in the Services sector.
Institutional Mechanisms for Trade Promotion: The schemes for trade promotion under the Department of
Commerce, namely, the Market Access Initiative (MAI) Scheme and the Market Development Assistance Scheme
The present allocation for the MAI scheme is inadequate; efforts will be made to augment resources for the scheme.
A major convention-cum exhibition centre will be developed at Pragati Maidan in Delhi.
Project exports will be encouraged through special lines of credit offered by the Ministry of External Affairs and the Buyers‟ Credit Scheme of the Department of Commerce through Exim Bank of India.
Questions
1. Write the full form of these terms related to EXIM policy: FMS, ITC, FOB, FOR, SEZ.
2. What is EXIM policy?3. Objectives of EXIM policy?4. Comparison between pre and post 90’s EXIM
policy of India?5. Discuss in short about EXIM policy 2015-2020.
Thank you
04/15/2023