Submitted By:-

VISHESHWAR ORAON

13MT07IND007

FOREIGN TRADE

EXPORT

Derived from the conceptual meaning as to ship the goods and

services out of the port of a country.

Countries all over the world are interdependent, which necessitated

foreign trade.

IMPORT

Derived from the conceptual meaning as to bring in the goods and

services into the port of a country.

Import of goods normally requires involvement of

the customs authorities in both the country of import and the country

of export and are often subject to import quotas, tariffs and trade

agreements. 2

Export Import (Exim) Policy or Foreign Trade Policy (FTP) is a

set of guidelines and instructions in matters related to the import

and export of goods in India.

Established by the Directorate General of Foreign Trade (DGFT)

Regulated by The Foreign Trade Development and Regulation

Act 1992

Exim policy contains various policy decisions with respect to

import and exports of the country.

Prepared and announced by the central government.

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1.Liberalization

2.Privatization

3.globalization

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Developing export potential

Improving export performance

Encouraging foreign trade

Creating favorable balance of payment position

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Selection of product

Market selection

Product modification for customization for target market

International pricing decisions

International market promotion decision

International marketing strategy decisions

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The Union Commerce Ministry, Government of India announces the

Export Import policy in every five year. This is also called EXIM policy.

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. The Foreign trade Policy which was

announced on August 28, 2009 is an integrated policy for the period

2009-14. This policy is updated on every financial year.

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To arrest and reverse declining trend of exports which will be

reviewed after every two years.

To Double India's exports of goods and services by 2014.

To double India's share in global merchandise trade by 2020

(long term aim). India's share in Global merchandise exports

was 1.45% in 2008.

Simplification of the application procedure for availing various

benefits.

To set in motion the strategies and policy measures which

catalyze the growth of exports.

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Maximum export

Regulate export

Simulate economic activities

Sustainable development

Creating job opportunities

Enhanced technological strength

Achieved international standard

8/44

Market Diversification:

a) 26 new countries have been included within the ambit of Focus

Market scheme.

b) The incentives provided under Focus Market Scheme have been

increased from 2.5% to 3%.

c) Incentive available under Focus Product Scheme (FPS) raised

from 1.25% to 2%.

d) Extra products included in the scope of benefits under FPS

9/44

1.Agriculture & Village Industry:

a) A new scheme called "Vishesh Krishi Upaj Yojana (Special

Agricultural Produce Scheme)" to boost exports of fruits,

vegetables, flowers, minor forest produce and their value added

products has been introduced.

b) Capital goods imported under EPCG will be permitted to be

installed anywhere in AEZ(Agri Export Zone).

c) Import of inputs such as pesticides is permitted under Advance

authorization for agro exports.

d) Introduction of a single window system to facilitate export of

perishable agricultural product.10/44

2.Handlooms & Handicraft Sector:

a) Enhancing to 5% of Free On Board (FOB) value of exports duty free

import of trimmings and embellishments for handlooms and

handicrafts.

b) Authorizing Handicraft Export Promotion Council to import trimmings,

embellishments and samples for small manufacturers.

c) Jaipur, Srinagar and Anantnag have been recognized as Towns of

Export Excellence for handicrafts.

11/44

3.Gems & Jewellery:

a) Permission for duty free import of consumables for metals other than

gold and platinum up to 2% FOB value of exports.

b) Duty free re-import entitlement for rejected jewellery allowed up to 2%

FOB value of exports.

c) Increase in duty free import of commercial samples of jewellery to Rs.

1 lakh.

d) Permission to import of gold of 18 carat and above under the

replenishment scheme.

e) Plan to establish "Diamond Bourse(s)” with an aim to make India an

International Trading Hub .

12/44

4.Lather & Footwear:

a) Increase in the limit for duty free entitlements of import trimmings,

embellishments and footwear components for leather industry to 3% of

FOB value of exports and that for duty free import of specified items for

leather sector to 5% of FOB value of exports.

b) Import of machinery and equipment for Effluent Treatment Plants for

leather industry exempted from customs duty.

c) Re-export of unsuitable imported materials (such as raw hides and skin

and wet blue leathers) has been permitted.

d) Kanpur, Dewas and Ambur have been recognized as Towns of Export

Excellence for leather products.

13/44

5.Service Sector:

Scrip's issued under Served From India Scheme (SFIS) can now be

used for payment of duty on import of Vehicles, which are in the nature

of professional equipment.

6.Marine Sector:

a) Fisheries exempted from maintenance of average EO under EPCG

Scheme (along with 7 sectors) however Fishing Trawlers, boats,

ships and other similar items shall not be allowed for this

exemption.

b) Additional flexibility under Target Plus Scheme (TPS)/ Duty

Free Certificate of Entitlement (DFCE) Scheme for the marine

sector.

c) Marine products are considered for VKGUY scheme. 15/44

Tea Exports:

a) The existing Minimum value addition under advance

authorization scheme for export of tea is 100 %.

b) DTA (Domestic Tariff Area) sale limit of instant tea by

EOU(Export oriented units) increased from 30% to 50%.

c) Export of tea has been included under VKGUY scheme.

Pharmaceutical Sector:

Focus Product Scrip) for countries in Africa and Latin

America & some countries in Far Pharma sector included

under MLFPS (Market Linked East.

16/44

Scheme for Export Oriented Units (EOU):

a) EOUs have been allowed to sell products manufactured by them

in DTA (Domestic Tariff Area) up to a limit of 90%, without

changing the criteria of ‘similar goods’, within the overall

entitlement of 50% for DTA sale.

b) EOU allowed to procure finished goods for consolidation along

with their manufactured goods, subject to certain safeguards.

c) EOUs will now be allowed CENVAT Credit facility.

17/44

Value Added Manufacturing (VAM):

To encourage Value Added Manufactured export, a minimum

15% value addition on imported inputs under Advance

Authorization Scheme.

Engineering & Electronics Industry:

Exporters/Associations would be entitled to utilize MAI(Market

Access Initiative) & MDA(Market Development Assistance) Schemes

for promoting Electronics and Engineering industry exports.

18/44

Sports Goods & Toys:

a) Duty free import of specified specialized inputs allowed to

the extent of 3 % of FOB value of preceding financial year’s

export.

Support for Green products and products from North East:

a) Focus would be on items relating to transportation, solar

and wind power generation and other products as may be

notified which will be incentivized under Reward Schemes

of FTP.

b) In order to give a fillip to exports of products from the

north-eastern States, notified products of this region

would be incentivized under Reward Schemes.

19/44

Disposal of Manufacturing Wastes:

Disposal of manufacturing wastes / scrap will now be allowed

after payment of applicable excise duty also before fulfillment of

export obligation under Advance Authorization and EPCG

Scheme. Earlier it was allowed after fulfillment of export

obligation.

Announcements for Automobile Industry:

Those Automobile industries which have their R&D

establishment will be allowed free import of reference fuels

(petrol and diesel), upto a maximum of 5 KL per annum, which

are not manufactured in India.

20/44

Duty Exemption Schemes:

a) Enable duty- free import of inputs required for export

production.

b) Consumables like fuel, oil, energy, catalysts, etc. too are

included.

Duty Remission Schemes:

a) 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.

b) Duty free replenishment certificate (DFRC)-introduced on 1

April 2000; to provide the benefits of advance license on

post-export basis.

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Export Promotion Industrial Park (EPIP) Scheme:

a) EPIP introduced in august 1995 & merged with Assistance

to States for Infrastructure Development of Exports (ASIDE)

from 1 April 2002.

b) Govt. through this scheme provides financial support to

create infrastructure for export production.

c) E.g.: Sitapur (Rajasthan); Bangalore; Chengalpattu(TM);

Kundli(Haryana); Medak(AP); Kakkanad(Kerala);etc.

Critical Infrastructure Balance(CIB) Scheme:

a) Introduced in 1996-1997

b) To balance capital investments for removing bottlenecks

from the path of development of infrastructure for export

production & easy transport.

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Duty Exemption Passbook Scheme (DEPB):

a) The Duty Exemption Scheme enables import of inputs required for export

production.

b) The Duty Remission Scheme enables post export replenishment/ remission of

duty on inputs used in it.

Target Plus Scheme:

a)The objective of the scheme is to accelerate growth in exports by rewarding

Star Export Houses who have achieved a quantum growth in exports.

23/44

Percentage incremental growth Duty Credit Entitlement (as a % of the

incremental growth)

20% and above but below 25% 5%

25% or above but below 100% 10%

100% and above 15% (of 100%)

Advance Authorization Scheme

a) An Advance Authorisation is issued to allow duty free import of

inputs, which are physically incorporated in the export product.

b) Duty free import of mandatory spares up to 10% of the

CIF(Cost, Insurance & Freight) value of the Authorisation which

are required to be exported/ supplied with the resultant

product may also be allowed under Advance Authorisation.

Focus Market Scheme

a) Introduced with effect from 1.4.2006.

b) It provides incentives for export of products which have high

employment potential in rural and semi urban areas with a view

to offset the inherent infrastructure bottlenecks and other

associated costs involved in marketing of such products.

24/44

EPCG (Export Promotion Capital Goods) Scheme:

a) For Agro & SSI units, export obligations reduced to 6 times of

duty saved fulfillment period to 12 year in place of normal

export obligations of 8 times of duty saved and 8 years

fulfillment period.

b) Firms fulfilling 75% or more of their export obligation in half the

original obligation period, shall be freed from the balance

export obligation.

c) Submission of Chartered Engineer Certificate permitted for all

units Importing capital goods and spares in lieu of submission

of installation certificates issued by Central Excise Authorities.

d) Facility of clubbing license further liberalized by permitting

clubbing of licenses issued under same customs notification.25/44

1.Preparation for Exporting:

a) Research on the countries or regions

b) Research on the market

c) Research on the customer

2.Business Negotiation

a) Enquiry

b) Offer and counter-offer

c) Acceptance

d) Conclusion of sales contract

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3.Implementation of Contract

a) Preparing goods for shipment

b) Inspection application

c) Reminding, examining and modifying L/C

d) Chartering and booking shipping space

e) Customs formality

f) Insurance

g) Documents preparation for bank negotiation

4.Settlement of Disputes

a) Conciliation

b) Arbitration

c) Litigation 27/44

Marketing and Promotion

Market Research

Credit Information

Enquiry

Offer

Acceptance

Contract

Chartering,Space Booking

Docks

Customs Formalities

Loading, Bill of Lading

Documents Preparation for Bank Negotiation

Settlement of Disputes (if any)

Checking Name of Commodity, Specification, Quantity, Packing and

Marking

Good Preparation

Preparation for Exporting

Business Negotiation

Performance of

Contract

Reply to Enquiry

Counter-offer

Reminding of L/C

Examination and Amendment of L/C

Insurance Company

Insurance Policy

Inspection Authority

Inspection Application

Certificate of Inspection

Certificate of Inspection

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1. To conduct market investigation

2. To formulate import plan for a certain commodity

3. To send inquiries to the prospective sellers overseas

4. To compare and analyze the offers or quotations received

5. To make counter-offers and decide on which offer is most

beneficial

6. To sign a purchase contract

7. To apply to a bank for opening a letter of credit

29/44

8. To book shipping space or charter a carrying vessel for taking over the cargoes, if the

contact is in terms of FOB

9. To effect insurance with the insurance company upon receipt of shipping advice

To apply for inspection if necessary

10. To attend to customs formalities to clear the goods through the customs

11. To entrust forwarding agents with all the transport arrangements from the port to the

end user’s warehouse

12. To settle disputes (if any)

30/44

The exporters

The shipping agents at the port or airport of loading

The railways(in some cases)in the exporter’s country

The road hauler(in some cases)in the exporter’s country

The port authority

The shipping company(or sea freight)

The airline(or air freight)

31/44

The insurance company or brokers

The exporter’s bank

The importer’s bank

The railways(in some cases)in the importer’s country

The road hauler(in some cases)in the importer’s country

The shipping agent at the port or airport of discharge

The importers

32/44

Bill of Lading

Commercial Invoice

Packing List

Weight Memo

Certificate of Inspection

Certificate of Origin

Insurance Policy(certificate)

Sales Contract

33/44

A. EXPORTS (including re-exports)

Exports during February, 2014 were valued at US $ 25688.94 million

(Rs.159858.16 crore)

which was 3.67 per cent lower in Dollar terms (11.47 per cent higher in Rupee

terms) than the level of US $ 26668.77 million (Rs. 143407.85 crore) during

February, 2013.

Cumulative value of exports for the period April-February 2013 -14 was US $

282777.02 million (Rs 1712422.41 crore) as against US $ 269859.25 million (Rs

1468159.38 crore) registering a growth of 4.79 per cent in Dollar terms and

growth of 16.64 per cent in Rupee terms over the same period last year.

34/44

B. IMPORTS

Imports during February, 2014 were valued at US $ 33819.14 million

(Rs.2,10,451.11 crore) representing a negative growth of 17.09 per cent in

Dollar terms and

A negative growth of 4.06 per cent in Rupee terms over the level of imports

valued at US $ 40791.98 million (Rs. 2,19,353.56 crore) in February, 2013.

Cumulative value of imports for the period April-February, 2013-14 was US $

410863.28 million (Rs. 24,74,626.88 crore) as against US $ 449788.89 million

(Rs. 24,46,387.26 crore) registering a negative growth of 8.65 per cent in Dollar

terms and growth of 1.15 per cent in Rupee terms over the same period last

year.

35/44

India exports were worth 29,213 Millions US$ in June of 2011.

Exports amount to 22% of India’s GDP.

Gems and jewellery constitute the single largest export item, 16

percent of exports.

India is also leading exporter of textile goods, engineering

goods, chemicals, leather manufactures and services.

India’s main export partners are European Union, United States,

United Arab Emirates and China.

36/44

INDIA’S EXPORTS(January 2009 – July 2011)

37/44

0

2

4

6

8

10

12

India UK USA China Japan Brazil

Pe

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ge o

f ex

po

rts

Countries

2003

2009

39/44

(As a percentage of total world exports)

INDIA’S IMPORTS(January 2009 – July 2011)

40/44

41/44

0

2

4

6

8

10

12

14

16

18

India UK USA China Japan Brazil

Pe

rce

nta

ge o

f im

po

rts

Countries

2003

2009

42/44

(As a percentage of total world imports)

Balance of trade = Exports - Imports

A positive balance of trade is known as a trade surplus

A negative balance of trade is known as a trade deficit or,

informally, a trade gap.

The trade deficit for April-February, 2013-14 was estimated at

US $ 128086.26 million which was lower than the deficit of US $

179929.64 million during April-February, 2012-13.

India is poor in oil resources and is currently heavily dependent

on coal and foreign oil imports for its energy needs.

Other imported products are: machinery, gems, fertilizers and

chemicals.43/44

Oil imports during February, 2014 were valued at US $ 13,696.8 million which

was 3.1 per cent lower than oil imports valued at US $ 14,134.3 million in the

corresponding period last year.

Oil imports during April-February, 2013-14 were valued at US $ 1,51,840.9

million .

Which was 0.8 per cent higher than the oil imports of US $ 1,50,632.3 million in

the corresponding period last year.

Non-oil imports during February, 2014 were estimated at US $ 20,122.3 million

which was 24.5 per cent lower than non oil import f US $ 26,657.7 million in

February, 2013.

Non oil imports during April-February, 2013-14 were valued at US $ 2,59,022.4

million which was 13.4 per cent lower than the level of such imports valued a US

$ 2,99,156.6 million in April February, 2012-13.

44/44

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INDIA’S BOT(July 2012 – Jan 2014)

http://www.eximkey.com

http://www.eximinfo.com

http://www.eximbankindia.in/

http://exim.indiamart.com/index.html

http://dgft.gov.in

http://www.tradingeconomics.com/india/exports

http://commerce.nic.in/tradestats/filedisplay.aspx?id=1

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