FOREIGN TRADE POLICY IN INDIA 2009-2014

PRESENTED BY

ROHITH

M.Com(Pre)

Reg.No : 136488140

INTRODUCTION

HISTORY Earlier this policy known as Export Import (EXIM)

Policy.

Union Commerce Ministry, GOI announces integrated FTP every five year.

updated every year on the 31st of March and the modifications, improvements and new schemes becomes effective from April month of each year

Foreign Trade Policy announced on 27th August 2009 for the period 2009-2014

INDIA’S FOREIGN TRADE POLICY 2009-2014

• The foreign trade policy which was announced on 28th August 2009 is an integrated policy for 2009-2014.

• This policy is updated every year with some modifications and new schemes.

• Foreign Trade Act has replaced the earlier law known as the imports and Exports (Control) Act 1947.

• The EX-Union Commerce & Industry Minister Mr.Anand Sharma was announced the new Foreign Trade Policy 2009 - 2014 in New Delhi on 27th August, 2009

OBJECTIVESShort Term Objectives :

• Arrest and reverse the declining trend of exports.

• Provide support to those sectors which have been hit badly by recession.

Medium term Policy Objectives :

• Achieve an Annual Export growth of 15% by March 2013.

• Achieve Annual Export growth of around 25% by 2014.

Long Term Objective :

• Doubling India’s share in Global Trade by 2020.

BOARD OF TRADE

Commerce & Industry Minister will be the Chairman of the Board of Trade (BOT). Government shall also nominate upto 25 persons, of whom at least 10 will be experts in trade policy. In addition, Chairmen of recognized EPCs and President or Secretary-Generals of National Chambers of Commerce will be ex-official members. BOT will meet at least once every quarter.

AIM IN GENERAL

• Developing export potential, improving export performance, boosting foreign trade and earning valuable foreign exchange.

• 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 : $ 450 Billion for 2013-14

• Export Growth Target: 25 % every year

• Three pillars:

i. Improvement in infrastructure related to exports.

ii. Reduction in transaction costs.

iii. Provision of full refund of all indirect taxes.

ANNOUNCEMENTS FOR VARIOUSE SECTORS

Marine sector

Gems and Jewellery

Agro exports

Leather exports

Tea exports

Pharma export

Handloom exportsGoing Through

Different Heads

Marine sector• Fisheries exempted from maintenance of

average EO under EPCG Scheme. However Fishing Trawlers, boats, ships and other similar items shall not be allowed for this exemption.

• Additional flexibility under Target Plus Scheme (TPS) / Duty Free Certificate of Entitlement (DFCE) Scheme for the marine sector.

Gems and Jewellary• Duty Drawback is allowed on Gold Jewellery

exports to neutralize duty incidence.

• 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 the purpose of grading/ certification.

Agro exports• Introduction of a single window system to

facilitate export of perishable agricultural produce with an aim to reduce transaction and handling cost.

• This system will involve creation of multi-functional nodal agencies.

Leather exports

• On the payment of 50 % applicable export duty, Leather sector shall be allowed re-export of unsold imported raw hides and skins and semi finished leather from public bonded ware houses.

Tea exports

• The existing Minimum value addition under advance authorization scheme for export of tea is 100 %. It has been reduced from the existing 100% to 50%.

• DTA (Domestic Tariff Area) sale limit of instant tea by EOU units increased from 30% to 50%.

Pharma exports

• Export Obligation Period for advance authorizations issued increased from existing 6 months to 36 months.

• Pharma sector included under MLFPS for countries in Africa and Latin America & some countries in Oceania and Far East.

Handloom exports

The claims under Focus Product Scheme, the requirement of " Handloom mark" was required earlier. This has been removed.

ADDITIONAL ANNOUNCEMENTS

• FPS (Focus Product Scheme), FMS (Focus Market Scheme), MLFPS (Market Linked Focus Product Scheme)

• MDA (Market Development Assess)

• MAI (Market Assess Initiatives)

• TEE (Towns of Export Excellence)

• Income Tax Exemptions

Going Through Different

Heads

FPS, FMS, MLFPS

• FPS (Focus product scheme): Provides license for export product which have high employment potential in rural & urban areas with a view of infrastructural facility.

• FMS (Focus Market Scheme): Offsetting high freight cost & distribution faced in assessing foreign markets

• MLFPS (market Linked Focus Product Scheme): Expanding products in identified markets

(Cont...)

(...Cont)

Announcements for FPS, FMS, MLFPS• 26 new markets added in this scheme. • Incentives under FMS raised from 2.5 % to 3 % • Incentive available under Focus Product Scheme (FPS)

raised from 1.25% to 2%. • products included in the scope of benefits under FPS• Market Linked Focus Product Scheme (MLFPS) expanded

by inclusion of products like pharmaceuticals, textile fabrics, rubber products, glass products, auto components, motor cars, bicycle and its parts etc.

• Focus Product Scheme benefit extended for export of ‘green products 'and some products from the North East

MDA (Market Development Assess)

Financial Assistance provided for a range of export promotional activities implemented by EPC, & Trade Promotion organization. This is administered by DOC (Dept of Commerce).

• Trade faires, & Buyer seller meet abroad & India

• Export Promotion Services

• Financial Assistance with travel agent is available to export . Travelling area of focus: Latin America, Africa, ASEAN, Austraia & Newzeland.

MAI (Market Assess Initiatives)

Financial Assistance provided by export promotional activities on focus country & focus product basis. Financial Assistance are available for Export Promotion Council (EPC), Industry & trade Associates (ITA), Agencies of state govts, Indian Commercial Mission (ICM)

• Market study & survey • Setting up showcases • Participation in trade faires• Displays in international Dept. Stores • Publicity & Campaigns • Brand Promotion

TEE (Towns of Export Excellence)

The following cities have been recognized as towns of export excellence (TEE)

• Handicrafts : Jaipur, Srinagar and Anantnag

• Leather Products : Kanpur, Dewas and Ambur

• Horticultural Products: Malihabad

Income Tax Exemptions

Extension of Income Tax Exemption to EOU (Export oriented unit) and STPI (software Technology park unit) :

• Income Tax exemption to 100% EOUs and to STPI units under Section 10B and 10A of Income Tax Act has been provided.

RESULTS

185.3

251.1

303.7 300.6329.7

2008-09 2010-11 2011-12 2012-13 2013-14

0

50

100

150

200

250

300

350

INDIA'S EXPORTS (In $ Billion)

INDIA'S EXPORTS (In $Billion)

(Cont...)

(...Cont)

303.7

488.6

184.9

300.6

491.5

190.9

329.7

542.7

213

0

100

200

300

400

500

600

EXPORTS IMPORTS TRADE DEFICIT

2011-12 2012-13 2013-14

IN $ BILLION

CONCLUSION

REFERENCES

• http://www.eximkey.com

• http://www.eximinfo.com

• http://www.eximbankindia.in/

• http://dgft.gov.in

• http://finmin.nic.in/