exim 2009-2014

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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

,

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

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

,

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

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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 tobe 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

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4) ITC (HS) Classification of Export & Import Items: it serves as a

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).

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OBJECTIVE OF F.T.P. 2009

-

14

To arrest and reverse

declining trend of exports.This will be reviewed after

every 2 years.

To double India's export of

goods and services by 2014.To double India's share in

global merchandise trade.

To encourage exportsthrough a mix of measures

including fiscal incentives.

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CONT………

.

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ANNOUNCEMENTS FOR FPS, FMS, MLFPS

26 New markets added under this scheme

Incentives under FMS raised from 2.5% to 3%

Incentives available under FPS raised from 1.25% to 2%

MLFPS expanded by inclusion of products like pharmaceuticals,textile fabrics, rubber products, glass products, auto

components, etc…

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PHASES OF EXIM POLICIES

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EXIM POLICY 1992-97

Concessions were announced to boost agricultural exports.

Centrally sponsored schemes to set up industrial parks.

EXIM POLICY 1997-2002

To accelerate the country’s transition to a globally-oriented

vibrant economy.

To stimulate sustained economic growth.

To enhance the technological strength and efficiency of

Indian agriculture, industry and services.

To provide consumers with good quality

products at reasonable prices.

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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

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Special Economic Zones (SEZs)

Sector-specific Packages

Import Liberalisation


Removal of Quantitative Restrictions

Agricultural Export Zones

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Was intented to promote exports which are conducive to

the economic development of the country.Special Economic Zones(SEZs)

Employment Generation

Technology upgradation

Growth Oriented

EXIM POLICY 2003-2004

To promote export related infrastructureTo boost R &D activity

To offset the high power costs faced by the

manufacturing industry

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FOREIGN TRADE POLICY, 2004-09

Exports and EmploymentMerchandise Exports

Product Focus

Market Focus

Expanding Vishesh Krishi Upaj Yojana

India as a Gem & Jewellery hub

India as an Automotive Hub

India as a refueling stop

Trade facilitation measures

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FOREIGN TRADE POLICY 09-14 The UPA Government has

assu office at a challenging

time when the entire world is

facing an unprecedented

economic slow-down. The

year 2009 is witnessing one

of the most severe global

recessions in the post-war

period. Countries across the

world have been affected invarying degrees and all

major economic indicators of

industrial production, trade,

capital flows,

unemployment, per capita

investment and consumption

have taken a hit. The

WTO estimates project a

grim forecast that globaltrade is likely to decline

b 9% in volume terms and

the IMF estimates project a

decline of over 11%.

The recessionary trend has

huge social implications. The

World Bank estimate

suggests that 53 million

more people would fall into

the poverty net this year

and over a billion people

would go chronically hungry.

Though India has not been

affected to the same extent

as other economies

of the world, yet our exports

have suffered a decline in

the last 10 months

due to a contraction in

demand in the traditional

markets of our exports.The protectionist measures

being..... Ctd on page 2

THE DAILY NEWS

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GLOBAL EXPORTS $ 200 BILLION $168

GLOBAL

MERCHANDISING

DOUBLE OUR SHARE

FROM THE 2003-04

0.83% TO 1.45%

GLOBAL SERVICES

EXPORT

(ONLY SERVICES)

INCREASE

SUBSTATIALLY

1.4% TO 2.8%

GOODS AND SERVICES INCREASE

SUBSTANITALLY

0.92% TO 1.64

THE SCORECARD

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Import restrictions

•

•

•

•

•

•

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•

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.

• Products now include auto and

engineering components.

Duty credit increased 2% from 1.25%

of FOB and to 5 percent for special

focus products (E.g.-handicrafts ).

SOME SCHEMES

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.

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(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, nuclearreactors & parts, and ships, boats and floating structures),

plastics and basic chemicals (excluding pharma products).

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•

1. Obligation under EPCG scheme

relaxed.

2. To aid technological up gradation of

export sector, EPCG Scheme at Zero

Duty has been introduced.

3. Export obligation on import of spares,moulds etc. under EPCG Scheme has

been reduced by 50%.

Taking into account the decline in

exports, the facility of Re-fixation of

Annual Average Export Obligation for a particular financial year in which there is

decline in exports from the country, has

been extended.

Support for Green products and products

from North East extended.

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• •

•

•

•

•

•

•

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Trade bans

IRAQ ARMS AND RELATED

MATERIAL

IRAN MATERIALS, TECHNOLOGY,

EQUIPMENT HELPING INTHEIR NUCLEAR ENRICHMENT

PROGRAM.

VENEZUELA ROUGH DIAMOND

DEMOCRATIC PEOPLE‟S REPUBLIC OF KOREA

ANY MATERIALS,TECHNOLOGY, EQUIPMENT

CONTRIBUTING TO THEIR

MISSILE PROGRAM

COTE D‟IVOIRE ROUGH DIAMOND

TRADE BANS

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)

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Gems and Jewellery-getting lustrous

• Duty Drawback is allowed on Gold Jewellery exports to

neutralize duty incidence.

• Increase in the limit of personal carriages

overseas exhibitions($5 mill.)• Plan to establish "Diamond Bourse (s) with an aim to make

India and International Trading Hub announced.

• Introduction of a new facility to allow import on

consignment basis of cut & polished diamonds for thepurpose of grading/ certification.

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AGRICULTURE

• Vishesh Krishi and Gram Udyog Yojana

• Agri Export Zones(AEZ)-

capital goods imported under EPCG &funds shallbe 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 anaim to reduce transaction and handling cost.

• This system will involve creation of multi-functionalnodal agencies. These agencies will be accreditedby APEDA.

• Towns of export excellence-threshold limit 250 Cr.

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Leather and footwear

• Enhancement of duty credit scrip underFocus Product Scheme (FPS)

• “Zero Duty” under Export PromotionCapital Goods Scheme (EPCG)

• Re-export of unsuitable imported materials

• Increase in the limit for duty freeentitlements of import

trimmings, embellishments

and footwear components i. e On the

payment of 50 % applicable export duty,

from publicbonded ware houses.

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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%.

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• 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.

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OLD WINE, NOT-SO-NEW-BOTTLE

• No major steps have been taken toaddress the slowdown in exports andprovide a fillip to exports

•

FTP should have addressed: Timely export credit at internationally

competitive rates

Providing inputs at international prices

Safeguard to exporters against dollarfluctuations

Review of DEPB scheme in compliance with WTO

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Sigh of relief for EXPORTERS

Inter-ministerial group to address issues raised by exporters

New directorate of trade remedy measures to be set up

Obligation under EPCG relaxed

Steps to help exporters reduce transaction costs

Single-window scheme for farm exports

Export units allowed to sell 90% of goods in domestic

market Provision for state-run banks to provide dollar credits

Number of duty-free samples for exporters raised to 50

pieces from 15

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150

155

160

165

170

175

180

185

190

195

200

2004-09 2009-10 2010-11

ESTIMATED

PREVIOUSLY (BN $)

REALISTIC

TARGET(BN $)

REALISTIC

TARGET(BN $)

2004-09

2009-10

2010-11

CONTINUING THRUST -EXPORTTARGET

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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 developingworld.

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 India’s exports of goods & services.

5. The long term policy objective for the government is to double

India’s share in global trade by 2020.

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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.

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exim 2009-2014

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