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FTP POLICY• Foreign Trade policy was effective from 1 st

April,2004 for a period of 5 years.• It was formulated & implemented mainly by Ministry

of Commerce and Industry.• It lays down that Export and imports shall be free ,

except in cases where they are regulated by theprovisions of this policy or any other law for the timebeing in force.

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Strategies

• Simplifying procedures & bringing down transactionCosts.

• Facilitating development of India as a global hub for Manufacturing , Trading ,& Services.

• Strengthening role of Indian embassies in export.• Facilitating technological & infrastructural up gradation of

Indian economy.• Identifying & nurturing special focus areas.

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Schemes of FTP in various Sectors

• Agriculture Sector • Gems and Jewellery Sector • Marine Sector • Leather Sector • Tea• Pharmaceutical• Handloom

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Agriculture• A new scheme called "Vishesh Krishi Upaj Yojana

(Special Agricultural Produce Scheme)" to boost exportsof fruits, vegetables, flowers, minor forest produce andtheir value added products has been introduced.

• Duty free import of capital goods under Export PromotionCapital Goods (EPCG) scheme, permitting theinstallation of capital goods imported under EPCG for agriculture anywhere in the Agri- Export Zone (AEZ);

• Utilizing funds from the 'Assistance to States for Infrastructure Development of Exports (ASIDE) scheme'for development of AEZs;

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Gems and Jewellery• Permission for duty free import of consumables for

metals other than gold and platinum up to 2 per cent of Free On Board (f.o.b) value of exports;

• Duty free re-import entitlement for rejected jewelleryallowed up to 2 per cent of f.o.b value of exports;

• Increase in duty free import of commercial samples of jewellery to Rs. 1 lakh; and

• Permission to import of gold of 18 carat and above under the replenishment scheme.

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Marine Sector• Fisheries have been included in the sectors which are

exempted from maintenance of average EO under EPCGScheme, subject to the condition that Fishing Trawlers,boats, ships and other similar items shall not be allowedto be imported under this provision. This would provide afillip to the marine sector which has been affected by thepresent downturn in exports.

• Additional flexibility under Target Plus Scheme (TPS)/Duty Free Certificate of Entitlement (DFCE) Scheme

forStatus Holders has been given to Marine sector.

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Leather and footwear Sector• Increase in the limit for duty free entitlements of import

trimmings, embellishments and footwear components for leather industry to 3 per cent of Free On Board (f.o.b) value of exports and that for duty free import of specified items for leather sector to 5 per cent of f.o.b value of exports;

• Import of machinery and equipment for Effluent TreatmentPlants for leather industry exempted from customs duty; and

• Re-export of unsuitable imported materials (such as raw hides

and skin and wet blue leathers) has been permitted.

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Tea Sector• Minimum value addition under advance

authorisation scheme for export of tea has beenreduced from the existing 100% to 50%.

• DTA sale limit of instant tea by E units has beenincreased from the existing 30% to 50%.

• Export of tea has been covered under VKGUYScheme benefits.

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Pharmaceutical• Export Obligation Period for advance authorizations

issued with 6-APA as input has been increased fromthe existing 6 months to 36 months, as is availablefor other products.

• Pharma sector extensively covered under MLFPSfor countries in Africa and Latin America; somecountries in Oceania and Far East.

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Handloom and Handicraft Sector• Enhancing to 5 per cent of Free On Board (f.o.b) value of

exports duty free import of trimmings and embellishments for handlooms and handicrafts;

• Exemption of samples from countervailing duty (CVD);

• Authorizing Handicraft Export Promotion Council to importtrimmings, embellishments and samples for smallmanufacturers; and

• Establishment of a new Handicraft Special Economic Zone.

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Benefits of FTP Policy• Flexibility provided to exporters • Payment of customs duty for Export Obligation

(EO)shortfall under Advance Authorisation / DFIA /EPCG Authorisation has been allowed by way of debit of Duty Credit scrips. Earlier the payment wasallowed in cash only.

• Import of restricted items, as replenishment, shallnow be allowed against transferred DFIAs, in linewith the erstwhile DFRC scheme.

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Waiver of Incentives Recovery, On RBI SpecificWrite off

• In cases, where RBI specifically writes off the exportproceeds realization, the incentives under the FTPshall now not be recovered from the exporterssubject to certain conditions

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• Reduction of Transaction Costs • 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 Rs1,50,000 (for manual applications) and Rs. 50,000from the existing Rs.75,000 (for EDI applications).

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• Directorate of Trade Remedy Measures • To enable support to Indian industry and exporters,

especially the MSMEs, in availing their rightsthrough trade remedy instruments, a Directorate of Trade Remedy Measures shall be set up.

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