INTRODUCTION TO THE INDUSTRY1.1 INDUSTRY PROFILEORIGINATION OF THE WORD TEXTILEThe term "Textile" is a Latin word originating from the word "texere" which means "to weave". Textile refers to a flexible material comprising of a network of natural or artificial fibres, known as yarn. Textiles are formed by weaving, knitting, crocheting, knotting and pressing fibers together.HISTORY OF TEXTILEThe history of textile is almost as old as that of human civilization and as time moves on the history of textile has further enriched itself. In the 6th and 7th century BC, the oldest recorded indication of using fiber comes with the invention of flax and wool fabric at the excavation of Swiss lake inhabitants. In India the culture of silk was introduced in 400AD, while spinning of cotton traces back to 3000BC. In China, the discovery and consequent development of sericulture and spin silk methods got initiated at 2640 BC while in Egypt the art of spinning linen and weaving developed in 3400 BC. The discovery of machines and their widespread application in processing natural fibers was a direct outcome of the industrial revolution of the 18th and 19th centuries. The discoveries of various synthetic fibers like nylon created a wider market for textile products and gradually led to the invention of new and improved sources of natural fiber. The development of transportation and communication facilities facilitated the path of transaction of localized skills and textile art among various countries.GLOBAL TEXTILE INDUSTRYThe textile industry is a group of related industries which uses a variety of natural fibers such as cotton, kapok, fique, sisal, banana, agave, flax, jute, kenaf, hemp, ramie, rattan, vine, wool, coir, asbestos, sheep's wool, cashmere goat hair, mohair goat hair, alpaca hair, horse hair, silk etc. and/or synthetic fibres such as polyamide nylon, PET or PBT polyester, phenol-formaldehyde (PF), polyvinyl alcohol fiber (PVA), polyvinyl chloride fiber (PVC), polyolefins (PP and PE), acrylic polyesters, aramids, polyethylene (PE), Elastomers, spandex, polyurethane etc.Subdivision of the textile industry into its various components can be approached from several angles. According to reference, the classical method of categorizing the industry involves grouping the manufacturing plants according to the fibre being processed, that is, cotton, wool, or synthetics. The modern approach to textile industry categorization, however, involves grouping the manufacturing plants according to their particular operation such as crocheting and pressing the fibers, spinning, weaving, knitting, knotting, apparel making, etc.New innovations in clothing production, manufacture and design came during the Industrial Revolution - these new wheels, looms, and spinning processes changed clothing manufacture forever.The rag trade, as it is referred to in the UK and Australia is the manufacture, trade and distribution of textiles.There were various stages - from a historical perspective - where the textile industry evolved from being a domestic small-scale industry, to the status of supremacy it currently holds. The cottage stage was the first stage in its history where textiles were produced on a domestic basis.During this period cloth was made from materials including wool, flax and cotton. The material depended on the area where the cloth was being produced, and the time they were being made.In the later half of the medieval period in the northern parts of Europe, cotton came to be regarded as an imported fiber. During the later phases of the 16th century cotton was grown in the warmer climes of America and Asia. When the Romans ruled, wool, leather and linen were the materials used for making clothing in Europe, while flax was the primary material used in the northern parts of Europe.During this era, excess cloth was bought by the merchants who visited various areas to procure these left-over pieces. A variety of processes and innovations were implemented for the purpose of making clothing during this time. These processes were dependent on the material being used, but there were three basic steps commonly employed in making clothing. These steps included preparing material fibers for the purpose of spinning, knitting and weaving.During the Industrial Revolution, new machines such as spinning wheels and handlooms came into the picture. Making clothing material quickly became an organized industry - as compared to the domesticated activity it had been associated with before. A number of new innovations led to the industrialization of the textile industry in Great Britain. Clothing manufactured during the Industrial Revolution formed a big part of the exports made by Great Britain. They accounted for almost 25% of the total exports made at that time, doubling in the period between 1701 and 1770.The center of the cotton industry in Great Britain was Lancashire - and the amount exported from 1701 to 1770 had grown ten times. However, wool was the major export item at this point of time.In the Industrial Revolution era, a lot of effort was made to increase the speed of the production through inventions such as the flying shuttle in 1733, the flyer-and-bobbin system, and the Roller Spinning machine by John Wyatt and Lewis Paul in 1738.Lewis Paul later came up with the carding machine in 1748 and in 1764 the spinning jenny was also developed. The water frame was invented in 1771 by Richard Arkwright. The power loom was invented in 1784 by Edmund Cartwright.In the initial phases, textile mills were located in and around the rivers since they were powered by water wheels. After the steam engine was invented, the dependence on the rivers ceased to a great extent. In the later phases of the 20th century, shuttles that were used in the textile industry were developed and became faster and thus more efficient. This led to the replacement of the older shuttles with the new ones.Today, modern techniques, electronics and innovation have led to a competitive, low-priced textile industry offering almost any type of cloth or design a person could desire. With its low cost labour base, China has come to dominate the global textile industry.REGULATORY STANDARDSFor textiles, like for many other products, there are certain national and international standards and regulations that need to be complied with to ensure quality, safety and sustainability.

The following standards amongst others apply to textiles: CPSIA, e.g. Standard for the Flammability of Clothing Textiles ASTM Textile Standards REACH Regulations for Textiles China Product Standard for TextilesOPTIMISTIC GROWTH PROSPECTSOverall future growth expectations for the textile industry remain optimistic. As per the survey, a significant proportion (40%) of the respondents expect the industry to witness growth of 11-20% during FY13 and FY14. However, around 20% of the respondents expect the industrys growth to record a decline during this period.

Figure no. 1.1Textile Industry growth prospects* (%)

*For FY13 and FY14Source: D&B Study

FLUCTUATING RAW MATERIAL PRICES: A MAJOR BUSINESS CONCERN

Among the sample of companies surveyed, around 42% anticipate fluctuating raw material prices and increasing market competition to be the major hindrances that could affect their business during FY13 and FY14.

Figure no. 1.2 Major business concerns (%)

Source: D&B Study

FAVOURABLE EXPORT MARKETS: KEY GROWTH DRIVER

According to the companies surveyed, favourable export markets would be a major growth driver for the industrys growth during FY13 and FY14; around 45% of the respondents confirm this.

Figure no. 1.3 Major growth drivers in the textile industry (%)

Source: D&B Study

INDIAN TEXTILE INDUSTRYThe textile industry in India traditionally, after agriculture, is the only industry that has generated huge employment for both skilled and unskilled labor in textiles. The textile industry continues to be the second largest employment generating sector in India. It offers direct employment to over 35 million in the country.According to the Ministry of Textiles, the sector contributes about 14% to industrial production, 4% to the country's gross domestic product (GDP) and 17% to the country's export earnings. The share of textiles in total exports was 11.04% during April-July 2011, as per the Ministry of Textiles. It is estimated that India would increase its textile and apparel share in the world trade to 8% from the current level of 4.5% and reach US$80 billion by 2020. During 2009-2010, Indian textiles industry was pegged at US$55 billion, 64% of which services domestic demand.

SEGMENTS OF INDIAN TEXTILE INDUSTRY1. Cotton Textiles2. Silk Textiles3. Woollen Textiles4. Readymade Garments5. Hand-crafted Textiles6. Jute and CoirPRODUCTIONIndia is the second largest producer of fiber in the world and the major fiber produced is cotton. Other fibers produced in India include silk, jute, wool, and man-made fibers. 60% of the Indian textile Industry is cotton based.The strong domestic demand and the revival of the Economic markets by 2010 have led to huge growth of the Indian textile industry. In December 2011, the domestic cotton price was up by 50% as compared to the December 2010 prices. The causes behind high cotton price are due to the floods in Pakistan and China. India projected a high production of textile (325 lakhs bales for 2010 -11) .There has been increase in India's share of global textile trading to seven percent in five years. The rising prices are the major concern of the domestic producers of the country.Man Made Fibers: These include manufacturing of clothes using fiber or filament synthetic yarns. It is produced in the large power loom factories. They account for the largest sector of the textile production in India. This sector has a share of 62% of the India's total production and provides employment to about 4.8 million people.The Cotton Sector: It is the second most developed sector in the Indian Textile industries. It provides employment to huge amount of people but its productions and employment is seasonal depending upon the seasonal nature of the production.The Handloom Sector: It is well developed and is mainly dependent on the SHGs for their funds. It market share is 13 % .of the total cloth produced in India.The Woollen Sector: India is the 7th largest producer. Of the wool in the world. India also produces 1.8% of the world's total wool.The Jute Sector: The jute or the golden fiber in India is mainly produced in the Eastern states of our country like Assam, West Bengal. Indian is 3rd largest producer of jute in the world.The Sericulture and Silk Sector: India is the 2nd largest producer of silk in the world. India produces world's 18% total silk. Mulberry, Eri, Tasar, and Muga are the 3 main types of the silk produced in the country. It is a labor-intensive sector.

GOVERNMENT INITIATIVESThe Government of India has promoted a number of export promotion policies for the Textile sector in the Union Budget 2011-12 and the Foreign Trade Policy 2009-14. This also includes the various incentives under Focus Market Scheme and Focus Product Scheme, broad basing the coverage of Market Linked Focus Product Scheme for textile products and extension of Market Linked Focus Product Scheme etc. to increase the Indian shares in the global trade of textiles and clothing. The various schemes and promotions by the Government of India are as follows -E-Marketing: The e-marketing platforms have been developed by the Central Cottage Industries Corporation of India (CCIC), and the Handicrafts and Handlooms Export Corporation of India (HHEC).Skill Development:Scheme on Integrated Skill Development Scheme targets to train approximately 26.75 lakh people over a period of 5 years (2.70 lakh people in the first two years); cover all segments under the ambit of the Ministry including: textiles and apparel; handicrafts; handlooms; jute; and sericulture. A scheme has been proposed for implementation under the12th FYP with an allocation of RS3500crore. A target of 1.5 lakh workers would be achieved by March 2012Credit Linkages:25,000 Artisan Credit Cards have been issued to artisans under the Credit Guarantee Scheme, and over 1.65 lakh additional applications have been forwarded to banks for consideration.Textiles Parks:The Indian Government has given approval to 21 new Textiles Parks to be set up and this would be executed over a period of 36 months. The new Textiles Parks would leverage employment to 400,000 textiles workers. The product mix in these parks would include apparels and garments parks, hosiery parks, silk parks, processing parks, technical textiles including medical textiles, carpet and power loom parks.

STRENGTHS AND WEAKNESSES OF INDIAN TEXTILE INDUSTRYSTRENGTHSWEAKNESS

1. Second largest textile producer in the world. Long and deep rooted textile tradition and highest net forex earner for the country1. Integrated industry across the entire chain from fiber to garments/home textiles i.e. concept to consumer1. Abundant skilled and technical labor force, which are especially suited for apparels/ Made Ups manufacturing.1. Large and growing domestic market to impart stability to export thrust1. Strong entrepreneurial class1. Flexibility in production of small order lots1. Small size and technological outdated plants result in lack of economics of scale, low productivity and weak quality control1. Poor work practices resulting in higher labor cost component in many staple garment, in spite of low labor costs1. With the exception of spinning, other sectors are fragmented1. Poor quality in weaving and processing mainly due to domination of unorganized sector1. Rigid government labor laws and policies lack reforms1. High transaction & power cost

TEXTILE INDUSTRY AT PANIPAT

Panipat is today world-famous for its beautiful and jubilant handloom made-ups, blankets andother upholstery. This new fame seems to have superceded the nostalgia of the three historical battles of Panipat. Some important features of the textile industry of Panipat are:1. There is hardly any city of this small size in India that has such a big textile manufacturing base.

2. This Industry comprises of seven segments that is handloom, woollen carpets, shoddy yarn spinning, open end cotton yarn spinning, power-loom industry, wet processing and hosiery woollen yarn industry. All of these together makes a business of around Rs 4000 crores and provide employment to 2 lacs people.

3. It contributes 50% of the total exports of the Handloom products from the country.

4. Panipat town has got a global distinction of having the maximum number of shoddy spinning units at one particular place.

5. Panipat has been awarded Gold Trophy by the Export Promotion Council for the highest quantity of exports in woollen hand tufted carpets.

6. The industry of Panipat is meeting out 75% demand of Barrack Blankets for the Indian Military.

In the nutshell, Panipat is an industry with a wide range of handloom textiles, whether requiredfor a five star hotel or for a poor man's cottage. However, Panipat is not an exception caseduring these days of overall industry recession. The industries of Panipat are seriouslysuffering from low capacity utilization, credit problems, less margins, labour problems,overseas competition and changing preferences of consumers, which is resulting in shut downof most of the small scale manufacturing units. In view of above there is an urgent need for aneed based, flexible, focused and action oriented policies targeted at sustained development of the industry and economy.

LEADING TEXTILE COMPANIES IN PANIPAT Sheena Exports Om Overseas Gaba Overseas Paliwal Exports REED & PICK IMPEX PVT. LTD. Ess Kay Enterprise Shri Krishna Furnishing Shiv Shakti Exports

INTRODUCTION TO THE COMPANY

REED & PICK IMPEX PVT. LTD. is undoubtly one of the leading manufacture exporters of home furnishing textiles based in well known industrial city in Panipat in Northern India. The Company operates as rugs Export Company of REED & PICK IMPEX PVT. LTD. group and perhaps the only organization that has implemented and maintained the modern day practices of professionalism in term of management while keeping the hiccups of unorganized manufacturing industry apart from our clients. As an outcome, our clients are enjoying the artistic and traditional Indian flavours of home furnishing trends with finest quality and efficient services like timely deliveries, quality assurance and lot more. With an experience of around 40 years in the textile industry and our expertise in extensive textile products, we are set to offer our clients unmatchable quality and exclusive designs.The Company manufactures a wide range of home furnishing textile products like face to face machine woven cotton bath mats and carpets, table linen, bed linen (Tapestry, Damask, Velvet, Prints), bags throws, rugs, kitchen linen, curtains (cotton, polyester, voile, organza and velvet).The Company currently exports wide range of home Furnishing Textiles to various countries such as France, Germany, South Africa, USA, and Dubai etc. It continues to broaden the reach to include additional designs and range in the portfolio, while expanding to new markets overseas.Quality has always been the key factor for us since our establishment. The company meets various quality standards and complies with the norms of ILO (Indian Labor Organization).REED & PICK IMPEX PVT. LTD. is one of the largest manufacturers & exporters of home furnishings, carpets and floor coverings in India. The Company counts among their clientele some of the most reputed stores and catalog companies of the world.The Companys in-house design studio is reputed for its superior quality of designs and innovative products. The Company is renowned for its exclusive theme-based collections that reflect the moods of various seasons. The Company is also renowned for creating custom-made products to suit the taste of aesthetics from across countries. REED & PICK IMPEX PVT. LTD. is run by highly experienced professionals who have in-depth knowledge in carpet designing, manufacturing and raw materials.REED & PICK IMPEX PVT. LTD. has built up an international reputation in Home Furnishings on the basis of our superior quality products and timely delivery.The company is a recognized export houses since 1973 and also an ISO 9001:2008 and 14001 certified. The company is mainly manufacturing and exporting textile products worldwide. They are mainly producing:Decorative Cushions and ThrowsBath Rugs and Shower CurtainsBraid and Woven RugsTufted Bedding and CurtainsDuvetQuilts and ComfortersTable LinenKitchen LinenBed LinenPoufBags and Recycled Products. The main clients of the company are KOHLS, K-MART, TARGET, HOMESTEAD, WAL-MART etc. For the export performance, the company was awarded by the President of India and the export promotion council.The main motto of the company is to attain 100% in time shipments of its products. Well trained managerial professionals and designers are involved in the managerial and product specialization.The compliance activities of the company are well integrated as per domestic and abroad norms. Workers welfare is the prime attention towards workers of the company by serving medical aid and the other educational facilities.In house manufacturing facilities are the most important peculiarity such as weaving, stitching, embroidery, braiding, tufting, dye, made ups, cotton blankets and bags- these activities are being organized in one hut. The Company has approximately 250 full time employees and some other employees who are working in the Company on contractual basis. Production Strength and Sophisticated MachineriesVertically Integrated Facilities and InfrastructureQualified Design and Development TeamGretagmacbeth Spectra light lll Color Viewing BoothGretagmacbeth Spectrophotometer for Recipe and DeltaLarge Base of LOOMS FOR RUGS, Tufting and FabricationOwn Container Transportation for Critical Shipments.125 Braiding Machines for Braid Rugs and Place Mats.100 Candle Wick Tufting machines for bedding and rugs.250 Multi Needle tufting machines for bath rugs.20 Power Looms for Ribbed Place Mats with Dobby.100 Power Looms with Dobby and Jacquards.10 wide-widths (340cm) computerize shuttle less looms.200 Juki Sewing machines.50 Pit Looms for Woven Rugs.100 Embroidery Machines.Blow fills for Pillows and Cushions.State of Art Dyeing in- house for overall dyeing.SET-UP INCLUDES:500 loom of various types.Cutting, sewing and tufting equipment for State-of-the-art fabrication.Captive transportation to counter occasional bottlenecks on timely delivery.Permanent workforce of 1500 loyal and skilled craftsmen only adult workers.P plant with O discharge option. Apart from the above facilities, the Company is depending on outsourced facilities like Printing, Computerized Embroidery, Quilting of some type of specialized products etc.INFRASTRUCTUREThe Companys main unit is located in the reputed industrial sector of Panipat city, also called as city of Handlooms in Northern India. The city is just 90 kms. from the capital city and well connected to national highway. The industrial background of Panipat city provides us with all the nut and bolts of textile business to flourish. Being recognized textile hub the city has a flow of skilled labors from all parts of country.The manufacturing unit is spread over a large area of land that provides enough space for the workers to work in healthy and well ventilated environment. The campus is divided into different work areas sheds, storage rooms or god owns, labor rooms, finishing departments, packaging department and finally a well organized managerial department.Technically qualified and committed professionals meticulously plan in advance to honour global commitments of quality. The Companys in-house production units ensure timely deliveries under strict quality norms. It is having a well developed and systematic production unit. It is divided into different sections and supervised by well trained staff.VISION OF THE COMPANYTo establish itself as a valuable brand into domestic market.A credible presences in organize detail segment through setting up retail change store.Relationship with at least 10 retailers out of top 20 in the world.MISSION & PHILOSOPHY OF THE COMPANY REED & PICK IMPEX PVT. LTD. is an export house company, with a focus on delivering the highest quality services. The team pushes the limits so their clients benefit. Always looking forward, the company is committed to fostering and developing successful business relationships. With a commitment to excellence and paying sharp attention to the quality of work and services, perfectionism is their only acceptable standard. The company forms partnerships with the best companies-those who are equally passionate about supporting businesses in their rapidly expanding technological world.Quality Policy REED & PICK IMPEX PVT. LTD. is committed to the manufacture and supply of the highest quality products. Our objective is to meet or exceed customer requirements on time every time, and strive towards a continuous improvement in the effectiveness of the established Quality Management System.

PROCESS ADOPTED BY THE COMPANY

Figure No. 1.4 Manufacturing Process

OPTIMISING MANUFACTURING PROCESSThe Companys processes are designed to maximize product appeal, ensure quality, minimize cost and eliminate duplication of packaging cost and effort.1. Product Appeal is maximized by optimal exploitation of REED & PICK IMPEX PVT. LTD. s design and sampling skills to develop buyers programs. In addition, our own innovative trendy designs are always available on tap.2. Quality is assured- starting with yarn purchase and each processing stage thereafter. Correct attitude, appropriate training and vigilance delivers promised quality Always.3. Buyer pre-shipment inspection welcomed.4. Cost is lowest at REED & PICK IMPEX PVT. LTD. because of procedures resulting in quality production without wastage, strong yarn buying power, captive manufacturing and long term perspective.5. Packaging is done to buyer specifications, with Bar Coding, instruction inserts etc., ready for retail shelf.

CONCLUSION :- In the above point of view, I liked overall company atmosphere by way of functioning, working atmosphere of men and women and their welfare facilities and other compliance activities are excellent.

PRODUCT PORTFOLIOCotton Furnishings created at REED & PICK IMPEX PVT. LTD. are renowned for their quality and style all over the world. REED & PICK IMPEX PVT. LTD. translates seasonal trends and designs, as conceived by the buyers, into their coordinated programs for home furnishings that offer unique lifestyles. Also designs are created and offered by REED & PICK IMPEX PVT. LTD. s design team. Through the Companys own manufacturing facilities, REED & PICK IMPEX PVT. LTD. produces a wide range of Home Furnishings like rugs, table linen, cushion covers, bed linen, kitchen linen, bathroom linen, curtains, cotton blankets, knits and throws. Cotton Home Furnishings made at REED & PICK IMPEX PVT. LTD. brighten the modern lifestyles and add beauty to homes across the nations. They are preferred by leading stores, around the globe.Figure No. 1.5 Product Portfolio

1. Bed linenIn terms of value, this is certainly the most important market for household textiles.Functions of bed linen are to protect the bedding, to enhance sleeping pleasure and an aesthetic appeal. The most important development concerning bedroom linen in recent decades has been the introduction of the eiderdown also referred to as duvet, or quilt (together with the quilt cover).The quilt cover has much more potential for fashion expression than sheets. Types of bed linen: Flat (non-raised) bed line. Terry bed line Jersey bed line Flannelette (flannel)

2. Bathroom linenThe major bathroom textile product is a terry towel: traditional towels, bath and beach towels and guest towels. The most important differences are based on end-use which dictates the different sizes. Other bath products are washing gloves, bath rugs and bath mats besides shower curtains.3. Kitchen linenA decrease in the use of tea towels has been greatly influenced by the fact that increasingly more households are using automatic dishwashers, so that hand drying is no longer necessary. In the kitchen, two types of towels are used: Kitchen towels, made of terry or flat woven; Dish towels or tea towels, only flat woven; Aprons and other accessories only flat woven.

4. Table linen Table linen includes:-tablecloths, table covers, table centers, table runners and napkins. The tablecloth has two functions: protection of the table and decoration (aesthetic appeal).This market is not at all large. It is difficult to get hold of accurate figures on table napkins separately, as they are almost always sold in a set matching the tablecloth, particularly in the case of expensive quality. There is an enormous offer as to types, forms, materials, colors and designs. Materials can be flat, structured, printed dobby, jacquard, embroidered, damask with all kind of adornments and decorations. Table linen is mostly made of cotton, material other than cotton, are 100% polyester (easy to launder) and 50% polyester/505 cotton or viscose and the more luxurious textile fibers such as silk. 5. CurtainsCurtains are used to provide privacy, eliminate (sun) light, insulation purposes (thermal, acoustic), aesthetic effects etc.Textiles for indoor window covering can be divided into the following categories: Draperies are generally made of heavy fabrics, such as velvet, satin, opaque and jacquard. They usually have a lining and are hung from hooks. Curtains are relatively sheer and lightweight and are in most cases hung without linings. Lace or net curtains adorn the window frames in houses. The major fiber used for net curtains is polyester filament. Other fibers are polyester staple and acrylic staple. Shades are soft coverings, take less space than curtain and draperies and come in fabric and a variety of other materials.Curtains are largely sold ready-made in lengths which fit the standard window sizes and several heights. Curtains and draperies are made from all types of fibers and fabric construction; however, most curtains are made with synthetic fibers.

6. CUSHIONSCushion covers can be developed on individual designs or could be supportive to a coordinating story, adding the accent to any living place. It is one of the most versatile engineered products providing immense scope to working on designs in creative and innovative ways and enabling us to offer a large range of prices.7. THROWS/ LAP SHAWLSThrows has been one of the strongest areas of REED & PICK IMPEX PVT. LTD. . Various qualities and counts of yarn are used with interesting weaving techniques on in-house Dobby and Jacquard facilities. REED & PICK IMPEX PVT. LTD. actively pursues to develop throws of latest and trendy designs in various price ranges, from very economical to highly sophisticated masterpieces in quantity.MAJOR CUSTOMERS OF THE COMPANYHome Furnishings created directly by REED & PICK IMPEX PVT. LTD. or coordinated by wholesalers / importers like Banana Republic (GAP), occupy prominent shelf space of major retail chains like:

Calvin Klein Home Carnif Crate & Barrel Homestead J.C. Penny Kaleidoscope Martha Stewart New Port News Inc. Pier-I Pottery Barn Selkon Spiegel Tommy Hilfiger Walmart

INTRODUCTION TO THE TOPIC1. Introduction : For India to become a major player in world trade, an all encompassing, comprehensive view needs to be taken for the overall development of the countrys foreign trade. While increase in exports is of vital importance, we have also to facilitate those imports which are required to stimulate our economy. Coherence and consistency among trade and other economic policies is important for maximizing the contribution of such policies to development. Thus, while incorporating the existing practice of enunciating an annual Exim Policy, it is necessary to go much beyond and take an integrated approach to the developmental requirements of Indias Foreign trade. The Government of India, Ministry of Commerce and Industry announces Export Import Policy after every five years. EXIM policy, in general, aims at developing export potential, improving export performance, encouraging foreign trade and creating favorable balance of payments position. The current Exim Policy covers the period 2004-2009. The Export Import Policy (EXIM Policy) is updated every year on the 31st of March and the modifications, improvements and new schemes becomes effective from 1st April of every year.

2. General Objectives of Exim Policy :

1. To establish the framework for globalization.2. To promote the productivity competitiveness of Indian Industry.3. To Encourage the attainment of high and internationally accepted standardsof quality.4. To augment export by facilitating access to raw material,intermediate,components, consumables and capital goods from the international market.5. To promote internationally competitive import substitution and self-reliance..

3. Objectives Of EXIM policy ( 2008 2009) :

Trade is not an end in itself, but a means to economic growth and national development. The primary purpose is not the mere earning of foreign exchange, but the stimulation of greater economic activity.

The Foreign Trade Policy is rooted in this belief and built around two majorobjectives. These are:1. To double our percentage share of global merchandise trade within the next five years; and2. To act as an effective instrument of economic growth by giving a thrust to employment generation.

4. Strategy :These objectives are proposed to be achieved by adopting, among others, the following strategies:

1. Unshackling of controls and creating an atmosphere of trust and transparency to unleash the innate entrepreneurship of our businessmen, industrialists and traders

2. Simplifying procedures and bringing down transaction costs.

3. Neutralizing incidence of all levies and duties on inputs used in export products, based on the fundamental principle that duties and levies should not be exported

4. Facilitating development of India as a global hub for manufacturing, trading and services.

5. Identifying and nurturing special focus areas which would generate additional employment opportunities, particularly in semi-urban and rural areas, and developing a series of Initiatives for each of these

6. Facilitating technological and infrastructural up gradation of all the sectors of the Indian economy, especially through import of capital goods and equipment, thereby increasing value addition and productivity, while attaining internationally accepted standards of quality.

7. Avoiding inverted duty structures and ensuring that our domestic sectors are not disadvantaged in the Free Trade Agreements/Regional Trade Agreements/Preferential Trade Agreements that we enter into in order to enhance our exports.8. Upgrading our infrastructural network, both physical and virtual, related tothe entire Foreign Trade chain, to international standards.

9. Revitalizing the Board of Trade by redefining its role, giving it due recognition and inducting experts on Trade Policy.

10. Activating our Embassies as key players in our export strategy and linkingour Commercial Wings abroad through an electronic platform for real time trade intelligence and enquiry dissemination.

5. Main Annual Supplement Highlights (2008 09) :1. DEPB scheme has been extended till May 2009.2. Refund of service tax on almost all the services.3. Income tax benefit to 100% EOUs has been extended by Government.4. Coverage of FMS has been increased and additional 10 countries have beensincluded. These are Mongolia, Bosnia-Herzegovina, Albania, Macedonia, Croatia, Honduras, Djibouti, Sudan, Ghana and Colombia.5. Split-up facility under DFIA Scheme introduced.6. Duty free import of samples has been increased from Rs.75, 000 to Rs.1,00,000.7. Value of jeweler parcels, through Foreign Post Office is raised to US$ 75,000. Earlier it was from US$ 50,000.8. EOUs shall be allowed to pay excise duty on monthly basis, instead of thepresent system of paying duty on consignment basis.9. Customs duty payable under EPCG Scheme has been reduced from 5% to 3%.

6. Some Other Highlights of The EXIM Policy :1. Inter State Trade Council :To engage the State Government inproviding an enabling environment for boosting international trade, by setting up an Inter State Trade Council.

2. Removal of Export Cess :Proposed to abolish cess on export of all agricultural and plantation commodities levied under various commodity Board Acts.

3. Export Promotion Capital Goods Scheme (EPCG) :This scheme is extended to Agricultural sector, SSI sector, Retail Sectors inorder to promote exports from them.

4. Service Export :To upgrade infrastructure in the service related companies.

5. Agri Export :Benefits under Vishesh Krishi Upaj Yojana have been extended to exports ofpoultry and dairy products in addition to export of flowers, fruits, vegetables and their value added products.

6. Package for Marine Sector :Duty free import of specified specialized chemicals and flavoring oils as per adefined list shall be allowed to the extent of 1% of FOB value of precedingfinancial years export.

7. Advance Licensing Scheme :The Scope of Advance License for annual requirement has been extended to allcategories of exporters having past export performance.

8. Duty Free Replenishment Certificate :Brass scrap, Additives, paper board, and dye stuff have been removed from thelist of items prescribed for import under DFRC.

9. Procedural Simplification :Proposed to simplify procedures and reduce the documentation requirements so as to reduce the transaction cost of the exporters and thereby increase their competitiveness

10. EDI Initiatives :DGFT shall introduce an automated electronic system for filing, retrieval and authentication of documents based on agreed protocols and message exchange with other authorities such including Customs and banks.

7. Implications of The Foreign Trade (2004-09):1. Implications on Indian Economy:This policy propose to simplify procedures and develop technology and infrastructure.

2. Implications on Agriculture : Special Agricultural Produce Scheme has been introduced for promoting the export of fruits, vegetables, flowers, and their value added products.3. Implications on Handlooms and Handicraft: Establishment of Handicraft SEZ and Handicraft Export Promotion Council would promote development of Handloom and Handicraft Industry.4. Implications on Gem and Jewellery Sector : This is special thrust area in this policy. Duty free imports of other inputs would give a further boostto this sector.5. Implications on Leather and Footwear Industry : Duty free import as a specified percentage of exports. Exemption on customs duty on equipment for effluent treatment plants would help promoting export form this sector.

6. Implications on Service Industry :An exclusive service promotion council has been set up in order to map theopportunities for key services in key market.

8. Negative List of Exports :The negative list consists of goods, the import or export of which is ether prohibited, restricted through licensing or otherwise to be canalized through a designate government agency.The negative list of exports, as per the EXIM Policy1. Prohibited Items : Which items completely banned from the exports. All forms of wild animals including their parts and products. Special Chemicals as notified by the DGFT. Exotic birds as notified by the DGFT. Beef. Sea Shells, as specified Human Skeleton. Peacock Tail Red sanders wood in any form.

2. Restricted Items :which items allowed for exports under special license issued by the DGFT. Dress materials, ready-made garments, fabrics or textile items withimprints of excerpts or verses of the Holy Quran. Horses Kathiawadi, Marwari, and Manipuri breeds. Fresh and frozen silver prom frets of weight less than 300gm. Paddy (Rice in husk). Seaweeds of all types. Chemical Fertilizer all types

FOREIGN TRADE POLICY 2009-14 FOREWORD

The UPA Government has assumed 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 in varying 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 global trade is likely to decline by 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 adopted by some of these countries have aggravated the problem. After four clear quarters of recession there is some sign of a turnaround and the emergence of green shoots, though I would be hesitant to hazard a guess on the nature and extent of this recovery and the time the major economies will take to return to their pre-recession growth levels. Announcing a Foreign Trade Policy in this economic climate is indeed a daunting task. We cannot remain oblivious to declining demand in the developed world and we need to set in motion strategies and policy measures which will catalyse the growth of exports.Before defining the objectives of the new policy it would be useful to take stock of our achievements in the foreign tradeover the last 5 years. The foreign trade policy announced by the UPA Government in 2004 had set two objectives, namely,(i) to double our percentage share of global merchandize trade within 5 years and (ii) use trade expansion as an effective instrument of economic growth and employment generation.Looking back, we can say with satisfaction that the UPA Government has delivered on its promise. Agriculture and industry has shown remarkable resilience and dynamism in contributing to a healthy growth in exports. In the last five years our exports witnessed robust growth to reach a level of US$ 168 billion in 2008-09 from US$ 63 billion in 2003-04. Our share of global merchandise trade was 0.83% in 2003; it rose to 1.45% in 2008 as per WTO estimates. Our share of global commercial services export was 1.4% in 2003; it rose to 2.8% in 2008. Indias total share in goods and services trade was 0.92% in 2003; it increased to 1.64% in 2008. On the employment front, studies have suggested thatnearly 14 million jobs were created directly or indirectly as a result of augmented exports in the last five years.The short term objective of our policy is to arrest and reverse the declining trend of exports and to provide additional support especially to those sectors which have been hit badly by recession in the developed world. We would like to set a policy objective of achieving an annual export growth of 15% with an annual export target of US$ 200 billion by March 2011.In the remaining three years of this Foreign Trade Policy i.e. upto 2014, the country should be able to come back on the high export growth path of around 25% per annum. By 2014, we expect to double Indias exports of goods and services. The long term policy objective for the Government is to double Indias share in global trade by 2020. In order to meet these objectives, the Government would follow a mix of policy measures including fiscal incentives, institutional changes, procedural rationalization, enhanced market access across the world and diversification of export markets. Improvement in infrastructure related to exports; bringing down transaction costs, and providing full refund of all indirect taxes and levies, would be the three pillars, which will support us to achieve this target. Endeavour will be made to see that the Goods and Services Tax rebates all indirect taxes and levies on exports. At this juncture, it is our endeavour to provide adequate confidence to our exporters to maintain their market presence even in a period of stress. A Special thrust needs to be provided to employment intensive sectors which have witnessed job losses in the wake of this recession, especially in the fields of textile, leather, handicrafts, etc. We want to provide a stable policy environment conducive for foreign trade and we have decided to continue with the DEPB Scheme upto December 2010 and income tax benefits under Section 10(A) for IT industry and under Section 10(B) for 100% export oriented units for one additional year till 31st March 2011. Enhanced insurance coverage and exposure for exports through ECGC Schemes has been ensured till 31st March 2010. We have also taken a view to continue with the interest subvention scheme for this purpose. We need to encourage value addition in our manufactured exports and towards this end, have stipulated a minimum 15% value addition on imported inputs under advance authorization scheme. It is important to take an initiative to diversify our export markets and offset the inherent disadvantage for our exporters in emerging markets of Africa, Latin America, Oceania and CIS countries such as credit risks, higher trade costs etc., through appropriate policy instruments. We have endeavored to diversify products and markets through rationalization of incentive schemes including the enhancement of incentive rates which have been based on the perceived long term competitive advantage of India in a particular product group and market. New emerging markets have been given a special focus to enable competitive exports. This would of course be contingent upon availability of adequate exportable surplus for a particular product. Additional resources have been made available under the Market Development Assistance Scheme and Market Access Initiative Scheme. Incentive schemes are being rationalized to identify leading products which would catalyze the next phase of export growth. As part of our policy of market expansion, we have signed a Comprehensive Economic Partnership Agreement with South Korea which will give enhanced market access to Indian exports. We have also signed a Trade in Goods Agreement with ASEAN which will come in force from January 01, 2010, and will give enhanced market access to several items of Indian exports. These trade agreements are in line with Indias Look East Policy. We have also concluded the Mercosur Preferential Trade Agreement. It shall be our endeavour to deepen our trade engagement with other major economic groupings in the world. The Government seeks to promote Brand India through six or more Made in India shows to be organized across the world every year. In the era of global competitiveness, there is an imperative need for Indian exporters to upgrade their technology and reduce their costs. Accordingly, an important element of the Foreign Trade Policy is to help exporters for technological upgradation. Technological upgradation of exports is sought to be achieved by promoting imports of capital goods for certain sectors under EPCG at zero percent duty. Under the present Foreign Trade Policy, Government recognizes exporters based on their export performance and they are called status holders. For technological upgradation of the export sector, these status holders will be permitted to import capital goods duty free (through Duty Credit Scrips equivalent to 1% of their FOB value of exports in the previous year), of specified product groups. This will help them to upgrade their technology and reduce cost of production.For upgradation of export sector infrastructure, Towns of Export Excellence and units located therein would be granted additional focused support and incentives. The policy is committed to support the growth of project exports. A high level coordination committee is being established in the Department of Commerce to facilitate the export of manufactured goods / project exports creating synergies in the line of credit extended through EXIM Bankfor new and emerging markets. This committee would have representation from the Ministry of External Affairs, Department of Economic Affairs, EXIM Bank and the Reserve Bank of India. We would like to encourage production and export of green products through measures such as phased manufacturing programme for green vehicles, zero duty EPCGscheme and incentives for exports. To enable support to Indian industry and exporters,especially the MSMEs, in availing their rights through trade remedy instruments under the WTO framework, we propose to set up a Directorate of Trade Remedy Measures. In order to reduce the transaction cost and institutional bottlenecks, the e-trade project would be implemented in a time bound manner to bring all stake holders on a common platform. Additional ports/locations would be enabled on the Electronic Data Interchange over the next few years. An Inter- Ministerial Committee has been established to serve as a singlewindow mechanism for resolution of trade related grievances. These are difficult times and we have set an ambitious goal for ourselves. I am sure that the industry and the Government,working in tandem, will be able to ensure that the Indian exports become globally competitive and that we are able to achieve the target, which we have set for ourselves.

HIGHLIGHTS OF FOREIGN TRADE POLICY 2009-2014Higher Support for Market and Product Diversification1. Incentive schemes under Chapter 3 have been expanded by way of addition of new products and markets.2. 26 new markets have been added under Focus Market Scheme. These include 16 new markets in Latin America and 10 in Asia-Oceania.3. The incentive available under Focus Market Scheme(FMS) has been raised from 2.5% to 3%.4. The incentive available under Focus Product Scheme(FPS) has been raised from 1.25% to 2%.5. A large number of products from various sectors havebeen included for benefits under FPS. These include, Engineering products (agricultural machinery, parts of trailers, sewing machines, hand tools, garden tools, musical instruments, clocks and watches, railway locomotives etc.), Plastic (value added products), Jute and Sisal products, Technical Textiles, Green Technology products (wind mills, wind turbines, electric operated vehicles etc.), Project goods, vegetable textiles andcertain Electronic items.6. Market Linked Focus Product Scheme (MLFPS) hasbeen greatly expanded by inclusion of products classified under as many as 153 ITC(HS) Codes at 4 digit level. Some major products include; Pharmaceuticals, Synthetic textile fabrics, value added rubber products, value added plastic goods, textile madeups, knitted and crocheted fabrics, glass products, certain iron and steel products and certain articles of aluminium among others. Benefits to these products will be provided, if exports are made to 13 identified markets (Algeria, Egypt, Kenya, Nigeria,South Africa, Tanzania, Brazil, Mexico, Ukraine, Vietnam, Cambodia, Australia and New Zealand).7. MLFPS benefits also extended for export to additional new markets for certain products. These products include auto components, motor cars, bicycle and its parts, and apparels among others.8. A common simplified application form has been introduced for taking benefits under FPS, FMS, MLFPS and VKGUY.9. Higher allocation for Market Development Assistance (MDA) and Market Access Initiative (MAI) schemes is being provided.

Technological Upgradation10. To aid technological upgradation of our export sector, EPCG Scheme at Zero Duty has been introduced. This Scheme will be available for engineering & electronic products, basic chemicals & pharmaceuticals, apparels & textiles, plastics, handicrafts, chemicals & allied products and leather & leather products (subject to exclusions of current beneficiaries under Technological Upgradation 10 Fund Schemes (TUFS), administered by Ministry of Textiles and beneficiaries of Status Holder Incentive Scheme in that particular year). The scheme shall be in operation till 31.3.2011.11. Jaipur, Srinagar and Anantnag have been recognised as Towns of Export Excellence for handicrafts; Kanpur, Dewas and Ambur have been recognised as Towns of Export Excellence for leather products; and Malihabad for horticultural products.

EPCG Scheme Relaxations12. To increase the life of existing plant and machinery, export obligation on import of spares, moulds etc. Under EPCG Scheme has been reduced to 50% of the normalspecific export obligation.13. 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 for the 5 year Policy period 2009-14.

Support for Green products and products from North-East14. Focus Product Scheme benefit extended for export of green products; and for exports of some products originating from the North East.

Status Holders15. To accelerate exports and encourage technological 11 upgradation, additional Duty Credit Scrips shall be given to Status Holders @ 1% of the FOB value of past exports. The duty credit scrips can be used for procurement of capital goods with Actual User condition. 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, nuclear reactors & parts, and ships, boats and floating structures), plastics and basic chemicals (excluding pharma products) [subject to exclusions of current beneficiaries under Technological Upgradation Fund Schemes (TUFS)]. This facility shall be available upto 31.3.2011.16. Transferability for the Duty Credit scrips being issued to Status Holders under paragraph 3.8.6 of FTP under VKGUY Scheme has been permitted. This is subject to the condition that transfer would be only to Status Holders and Scrips would be utilized for the procurement of Cold Chain equipment(s) only.

Stability/ continuity of the Foreign Trade Policy17. To impart stability to the Policy regime, Duty Entitlement Passbook (DEPB) Scheme is extended beyond 31-12- 2009 till 31.12.2010.18. Interest subvention of 2% for pre-shipment credit for 7 specified sectors has been extended till 31.3.2010 in the Budget 2009-10.19. Income Tax exemption to 100% EOUs and to STPI units under Section 10B and 10A of Income Tax Act, has been 12 extended for the financial year 2010-11 in the Budget2009-10.20 The adjustment assistance scheme initiated in December,2008 to provide enhanced ECGC cover at 95%, to the adversely affected sectors, is continued till March, 2010.

Marine sector21. Fisheries have been included in the sectors which are exempted from maintenance of average EO under EPCG Scheme, subject to the condition that Fishing Trawlers, boats, ships and other similar items shall not be allowed to be imported under this provision. This would provide a fillip to the marine sector which has been affected by the present downturn in exports.22. Additional flexibility under Target Plus Scheme (TPS) / Duty Free Certificate of Entitlement (DFCE) Scheme for Status Holders has been given to Marine sector.

Gems & Jewellery Sector23. To neutralize duty incidence on gold Jewellery exports, it has now been decided to allow Duty Drawback on such exports.24. In an endeavour to make India a diamond international trading hub, it is planned to establish Diamond Bourse (s).25. A new facility to allow import on consignment basis of cut & polished diamonds for the purpose of grading/ certification purposes has been introduced.26. To promote export of Gems & Jewellery products, the 13 value limits of personal carriage have been increased from US$ 2 million to US$ 5 million in case of participation in overseas exhibitions. The limit in case of personal carriage, as samples, for export promotion tours, has also been increased from US$ 0.1 million to US$ 1 million.

Agriculture Sector27. To reduce transaction and handling costs, a single window system to facilitate export of perishable agricultural produce has been introduced. The system will involve creation of multi-functional nodal agencies to be accredited by APEDA.

Leather Sector28. Leather sector shall be allowed re-export of unsold imported raw hides and skins and semi finished leather from public bonded ware houses, subject to payment of 50% of the applicable export duty.29. Enhancement of FPS rate to 2%, would also significantly benefit the leather sector.

Tea30. Minimum value addition under advance authorisation scheme for export of tea has been reduced from the existing 100% to 50%.31. DTA sale limit of instant tea by EOU units has been increased from the existing 30% to 50%.32. Export of tea has been covered under VKGUY Scheme benefits. 14

Pharmaceutical Sector33. Export Obligation Period for advance authorizations issued with 6-APA as input has been increased from the existing 6 months to 36 months, as is available for other products.34. Pharma sector extensively covered under MLFPS for countries in Africa and Latin America; some countries in Oceania and Far East.

Handloom Sector35. To simplify claims under FPS, requirement of Handloom Mark for availing benefits under FPS has been removed.

EOUs36. EOUs have been allowed to sell products manufactured by them in DTA 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.37. To provide clarity to the customs field formations, DOR shall issue a clarification to enable procurement of spares beyond 5% by granite sector EOUs.38. EOUs will now be allowed to procure finished goods for consolidation along with their manufactured goods, subject to certain safeguards.39. During this period of downturn, Board of Approvals (BOA) to consider, extension of block period by one year for calculation of Net Foreign Exchange earning of EOUs.1540. EOUs will now be allowed CENVAT Credit facility for the component of SAD and Education Cess on DTA sale.

Thrust to Value Added Manufacturing41. To encourage Value Added Manufactured export, a minimum 15% value addition on imported inputs under Advance Authorization Scheme has now been prescribed.42. Coverage of Project Exports and a large number of manufactured goods under FPS and MLFPS.

DEPB43. DEPB rate shall also include factoring of custom duty component on fuel where fuel is allowed as a consumable in Standard Input-Output Norms.

Flexibility provided to exporters44. Payment of customs duty for Export Obligation (EO) shortfall under Advance Authorisation / DFIA / EPCG Authorisation has been allowed by way of debit of DutyCredit scrips. Earlier the payment was allowed in cash only.45. Import of restricted items, as replenishment, shall now be allowed against transferred DFIAs, in line with the erstwhile DFRC scheme.46. Time limit of 60 days for re-import of exported gems and jewellery items, for participation in exhibitions has beenextended to 90 days in case of USA. 1647. Transit loss claims received from private approved insurance companies in India will now be allowed for the purpose of EO fulfillment under Export Promotion schemes. At present, the facility has been limited to public sector general insurance companies only.

Waiver of Incentives Recovery, On RBI Specific Write off48. In cases, where RBI specifically writes off the export proceeds realization, the incentives under the FTP shall now not be recovered from the exporters subject to certain conditions.

Simplification of Procedures49. To facilitate duty free import of samples by exporters, number of samples/pieces has been increased from the existing 15 to 50. Customs clearance of such samples shall be based on declarations given by the importers with regard to the limit of value and quantity of samples.50. To allow exemption for up to two stages from payment of excise duty in lieu of refund, in case of supply to an advance authorisation holder (against invalidation letter) by the domestic intermediate manufacturer. It would allow exemption for supplies made to a manufacturer, if such manufacturer in turn supplies the products to an ultimate exporter. At present, exemption is allowed upto one stage only.51. Greater flexibility has been permitted to allow conversion of Shipping Bills from one Export Promotion scheme to other scheme. Customs shall now permit this conversion within three months, instead of the present limited periodof only one month.52. To reduce transaction costs, dispatch of imported goods directly from the Port to the site has been allowed under Advance Authorisation scheme for deemed supplies. At present, the duty free imported goods could be taken only to the manufacturing unit of the authorisation holder or its supporting manufacturer.53. Disposal of manufacturing wastes / scrap will now be allowed after payment of applicable excise duty, even before fulfillment of export obligation under Advance Authorisation and EPCG Scheme.54. Regional Authorities have now been authorised to issue licences for import of sports weapons by renowned shooters, on the basis of NOC from the Ministry of Sports & Youth Affairs. Now there will be no need to approach DGFT(Hqrs.) in such cases.55. The procedure for issue of Free Sale Certificate has been simplified and the validity of the Certificate has been increased from 1 year to 2 years. This will solve the problems faced by the medical devices industry.56. Automobile industry, having their own R&D establishment, would be allowed free import of reference fuels (petrol and diesel), upto a maximum of 5 KL per annum, which are not manufactured in India.57. Acceding to the demand of trade & industry, the application and redemption forms under EPCG scheme have been simplified.

Reduction of Transaction Costs58. No fee shall now be charged for grant of incentives under the Schemes in Chapter 3 of FTP. Further, for all other Authorisations/ licence applications, maximum applicable fee is being reduced to Rs. 100,000 from the existing Rs 1,50,000 (for manual applications) and Rs. 50,000 from the existing Rs.75,000 (for EDI applications).59. To further EDI initiatives, Export Promotion Councils/ Commodity Boards have been advised to issue RCMC through a web based online system. It is expected thatissuance of RCMC would become EDI enabled before the end of 2009.60. Electronic Message Exchange between Customs and DGFT in respect of incentive schemes under Chapter 3 will become operational by 31.12.2009. This will obviatethe need for verification of scrips by Customs facilitating faster clearances.61. For EDI ports, with effect from December 09, double verification of shipping bills by customs for any of the DGFT schemes shall be dispensed with.62. In cases, where the earlier authorization has been cancelled and a new authorization has been issued in lieu of the earlier authorization, application fee paid already for the cancelled authorisation will now be adjusted against the application fee for the new authorisation subject to payment of minimum fee of Rs. 200.63. An Inter Ministerial Committee will be formed to redress/ resolve problems/issues of exporters.64. An updated compilation of Standard Input Output Norms (SION) and ITC (HS) Classification of Export and ImportItems has been published.

Directorate of Trade Remedy Measures65. To enable support to Indian industry and exporters, especially the MSMEs, in availing their rights through trade remedy instruments, a Directorate of Trade Remedy Measures shall be set up.

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:-

Indian Exim PolicyHome - 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 services3. 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 facility6. 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.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 ClustersUpgradation of infrastructure in existing clusters/industrial locations under the Department of Industrial Policy & Promotion (DIPP) scheme to increased.

Rehabilitation of Sick UnitsSteps for for revival of sick units and extension of export has been modified.

Removal of Quantitative RestrictionsImport 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 IndiaDuty 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 LicenseStandard 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 toEOU/SEZ/EHTP/STP.

Transaction Cost ReductionApplications 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 sthree years subject to ceiling of Rs.5 lakh permitted.

FOREIGN TRADE POLICYThis Annual Supplement is the second in the series supplementing the Foreign Trade Policy 2004-09. In line with Governments promise of a stable Foreign Trade Policy regime, this years 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 PERFORMANCEWhen the Government launched the new Foreign Trade Policy in August 2004, it set out with the ambitious objective of doubling Indias 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 years 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%. Market Information & Data.

3. SECTORAL EXPORT GROWTHExports 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 COUNTRIESIndia 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%. Indias 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 SCHEMESThe 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 EXPORTWhile 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 HUBBecause 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 ofmeasures 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-COMPONENTSIndia 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 SECTORSupplies 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 SECTORHaving 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%.

Few step for an enterprise to become an export organisation are:- 1) REGISTRATION AS A BUSINESS ENTITY:- A new export unit can be started by registering as proprietorship, partnership or imited liability company. 2) IEC NUMBER - Any company wish to export/import need to obtain a Import Export code(IEC) number. IEC is issued by Regional licensing authority of DGFT. For communication with any office in regard to for export and import needs IEC number. 3) RCMC means the certificate of registration and membership granted by an Export Promotion Council/ Commodity Board/ Development Authority or other competent authority as prescribed by Foreign Trade Policy to an exporting unit. Any person, applying for a licence/ authorisation/certificate/permission to import/ export or any other benefit or concession under Foreign Trade Policy is required to furnish (RCMC). It is also required for executing a bond before Central Excise authorities, which exempts exporters to furnish bank guarantees.

Export Promotion Councils have been set up by various ministries of the Central Government to promote and develop the exports of particular group of products, projects and services. For certain group of products, which are sensitive from the viewpoint of national consumption, there are commodity boards instead. Thus while we have export promotion councils for apparel, leather, software, chemicals, engineering goods etc., India has commodity boards for tea, coffee, jute etc.

4) REGISTRATION WITH SALES TAX OFFICE :-Exported goods from India are exempt from central & state sales tax. However, for getting exemption of such taxes or claming their refund, wherever permissible under Foreign Trade Policy, the exporting unit should be registered with sales tax authorities.

5) REGISTRATION WITH EXCISE DEPT.:-If an exporting unit is engaged in manufacturing of products, it needs registration with excise department & formalities remain the same as for any domestic unit. This registration is required for claiming refund of excise duties under various schemes of the government.

RESEARCH METHODOLOGYResearch in general refers to the search of knowledge. One can also define research as a scientific & systematic collection of information.In simple words research is the careful investigation or enquiry of markets especially through search for new facts in any branch of knowledge.The methodology adopted for the project was as follows:Direct Consultation: This includes direct interaction with staff of the organization regarding the problems that I encountered during the research.Data Collection: Data was mainly collected from the internal reports of the company and gathering further information. I have also referred to the various secondary sources.

RESEARCH DESIGNResearch design is the conceptual blueprint for collection, measurement and analysis of data. Research design stands for advance planning of the methods to the adopted for collecting the relevant data and the techniques to be used in their analysis keeping in view the objectives of the research and the availability of staff, time and money. Two broad classes of research design are identified as:In case of exploratory research studies.In case of descriptive in case of research studies.The research design used in the project report is descriptive research design. A Descriptive research design is a scientific method which involves observing and describing the behaviour of a subject without influencing it in any way. Research: DescriptiveResearch Technique: Qualitative & QuantitativeTools Used: E-mail & TelephonicData Source: Primary & SecondaryDATA COLLECTION METHODData collection is the basic step and of importance on which authenticity of study depends. Before going for the study the researcher have to collect the appropriate data required for the study. Source of allocation of data are two types.1. Primary Data Handouts given by the company guide E-Mail Telephone Questionnaire2. Secondary Data Packaging List Shipping Bill Website of REED & PICK IMPEX PVT. LTD. Files maintained by the departments Books and JournalsSAMPLE SIZE: The sample size for the study was 100.OBJECTIVE OF THE STUDYThe main objective of the study of the EXIM POLICY.To know about export import process.To get the first hand experience in the field of manufacturing unit.To study the transportation cost associated with different modes.To know the requirement of the customer.To analyse the current situation of export products.To determine the total cost expensed on a single product.JUSTIFICATION OF THE STUDYThis project is all about to know about EXIM POLICY required for export. This project puts more focus on to know custom clearness, to make export invoice, to get shipping bill number from custom department etc.

SCOPE OF THE STUDYThe scope of study pertains to the following:The study comprises the understanding of EXIM POLICY at REED & PICK IMPEX PVT. LTD. The survey consists of 100 respondents who are asked general questions relating to export activities The study helped to get an insight about the awareness of export activities among the employees

DATA ANALYSIS AND INTERPRETATIONQ1: Nature of your company.Table no. 4.1S.No.OptionsNo. of Respondents

1.Manufacturing30

2.Trading Company20

3.Multinational Company25

Figure no. 4.1

Interpretation:Of the total, 40% employees believe the primary business of the Company is Manufacturing. However, 30% and 20% believe it as trading and multinational company, respectively.

Q2: Extent of foreign ownership of your company

Table no. 4.2

S.No.OptionsNo. of Respondents

1.No foreign ownership90

2.Foreign partner(s) have less than or equal to 50% ownership6

3.Foreign partner(s) have more than 50% ownership4

Figure no. 4.2

Interpretation: Majority of the respondents agreed that there is no foreign ownership in the Company.

Q3: Number of year of operationTable no. 4.3

S.No.OptionsNo. of Respondents

1.More than 40 years80

2.Less than 40 years16

3.Cant specify exactly4

Figure no. 4.3

Interpretation: Majority of the respondents know that the Company is operating since 1970s.

Q4: Presence of the Company in major international retail chain stores

Table no. 4.4

S.No.OptionsNo. of Respondents

1.Yes75

2.No25

Figure no. 4.4

Interpretation: The survey proves that the Company occupies prominent shelf space of major retail chains.

Q5: Awareness about international norms that are applicable for the Companys products

Table no. 4.5

S.No.OptionsNo. of Respondents

1.Yes85

2.No15

Figure no. 4.5

Interpretation: 85% of the respondents are aware of the fact that international norms are applicable on the Companys products.

Q6: Information about the changed or new regulation schemes for exportsTable no. 4.6

S.No.OptionsNo. of Respondents

1.By domestic information sources80

2.By foreign/international information sources20

Figure no. 4.6

Interpretation: Majority of respondents believe that domestic sources of information provide all information related to changed or new schemes.

Q7: Mode of transport the Company uses the mostTable no. 4.7

S.No.OptionsNo. of Respondents

1.Road60

2.Ocean30

3.Rail10

Figure no. 4.7

Interpretation: Most of the respondents observed that the Company uses road to transport majority of its products.

Q8:Interest of employees in attending seminars on export?Table no. 4.8

S.No.OptionsNo. of Respondents

1.Yes65

2.No35

Figure no. 4.8

Interpretation: Only 65% of the respondents have shown interest in attending seminars related to exports.

Q9: The level of exporting activity for the CompanyTable no. 4.9

S.No.OptionsNo. of Respondents

1.50% or more of products are exported55

2.Some of the product(s) are exported, but the Company is interested in exporting a higher share35

3.Company is currently not exporting, but has interest in doing so in future 10

Figure no. 4.9

Interpretation: Majority of the respondents believe that the Company exports about 50% of its products.

LIMITATIONS OF THE STUDY

Lack of Experience:I was new on the topic which was assigned to me. So lack of experience in getting information from respondents came in to the way of collecting the relevant data. Time: Time was a bit short to fathom into the depth of the study. But still all efforts to the best possible extent have been made to collect the data. Data Collection Constraints:Since most of the data used is secondary in nature, this poses the constraints on the validity and reliability of the data. Busy Employees:Employees are not available as are busy in their work Appointments:There was a problem in taking appointments from the managers. Sources: Sources were confounded some time to give proper information. Area: The office area was very congested.

CONCLUSION As per the rule, Govt. of India, Ministry of Commerce and industry announce EXIM Policy after every five year which updated every year on 31st March and become effective from 1st april of every year. In respect of that,when the previous foreign trade policy made with to achieve the certain objective as developing exports potential, promoting FDI, improving foreign trade and export performance and creating favourable BOP.,which moreover achieved in recent time. All the sector enjoyed the policy in terms of growth and market expansion. So, now in this year i.e 2009-2014,a new foreign trade policy have amended with the objective of doubling indias percentage share of global of merchandize trade within years along with previous at all. So, for that so many diversification have done or implementing the new one for diff. sector viz. marine sector,jems and jewellery sector, leather ,agriculture sector ,service sector ,tea,pharmaceutical,hardware and software,which will helpful for the Indian economy growth. No doubt that EXIM is one of the ma