Indian Business Environment Foreign Trade Policy of India

8/3/2019 Indian Business Environment Foreign Trade Policy of India

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FOREIGN TRADE POLICYOF INDIA

Government of India

Ministry of Commerce and Industry


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y y

Foreign Trade Policy 2004-09 Government of India used to announce five

year Export-Import Policy (Exim Policy). The Exim Policy 2002-07 put in place by the

NDA Government was replaced by theForeignTrade Policy, 2004-09,announced by the UPAGovernment.

It is for the first time that a comprehensiveforeign trade policy was announced for the

nation The Annual Supplement of the Foreign Trade

Policy announced by the Minister of Commerce& Industry on 8th April 2005, does not include

any major changes


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The Preamble of the Policy states For India to become a major player in world

trade, an all encompassing, comprehensive viewneeds to be taken for the overall development ofthe countrys foreign trade. While increase inexports is of vital importance, we have also tofacilitate those imports which are required tostimulate our economy. Coherence andconsistency among trade and other economicpolicies is important for maximizing thecontribution of such policies to development.Thus, while incorporating the existing practice of

enunciating an annual Exim Policy, it is necessaryto go much beyond and take an integratedapproach to the developmental requirements ofIndias foreign trade. This is the context of thenew Foreign Trade Policy.


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BJECTIVES(i)To double our percentage share of

global merchandise trade within thenext five years; and

(ii) To act as an effective instrument ofeconomic growth by giving a thrust toemployment generation.


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STRATEGY Unshackling of controls and creating an

atmosphere of trust and transparency tounleash the innate entrepreneurship of ourbusinessmen, industrialists and traders.

Simplifying procedures and bringing down

transaction costs. Neutralizing incidence of all levies and duties

on inputs used in export products, based onthe fundamental principle that duties andlevies should not be exported.

Facilitating development of India as a globalhub for manufacturing, trading and services.


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Identifying and nurturing special focus areaswhich would generate additional employment

opportunities, particularly in semi-urban andrural areas, and developing a series ofInitiatives for each of these.

Facilitating technological and infrastructural upgradation of all the sectors of the Indianeconomy, especially through import of capitalgoods and equipment, thereby increasingvalue addition and productivity, while attaininginternationally accepted standards of quality.


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Avoiding inverted duty structures andensuring that our domestic sectors are

not disadvantaged in the Free TradeAgreements/Regional TradeAgreements/Preferential TradeAgreements that we enter into in orderto enhance our exports.

Upgrading our infrastructural network,both physical and virtual, related to theentire Foreign Trade chain, tointernational standards.


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Revitalizing the Board of Trade byredefining its role, giving it due

recognition and inducting experts onTrade Policy.

Activating our Embassies as key

players in our export strategy andlinking our Commercial Wings abroadthrough an electronic platform for real

time trade intelligence and enquirydissemination


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PARTNERSHIP :The new Policyenvisages merchant exporters andmanufacturer exporters, business andindustry as partners of Government inthe achievement of its stated objectives

and goals. ROADMAP:This Policy is essentially a

roadmap for the development of Indias

foreign trade. It contains the basicprinciples and points the direction inwhich the govt. propose to go


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SALIENT FEATURES

Special focus initiatives have beenidentified for the agriculture, handlooms,

handicraft, gems & jewellery and leathersectors

Pragati Maidan will be transformed into aworld-class exhibition complex( Permanent

Exhibition Marts , Convention Center , multi-level park etc.)


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Promotional Measures

Encouraging States participation in theexport endeavor .

Assistance to States for InfrastructureDevelopment of Exports (ASIDE) .

To provide funds to the States based on

the twin criteria of gross exportsand therate of growth of exports.


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Developing infrastructure such as

roads connecting production centers withthe ports,

setting up of Inland Container Depots andContainer Freight Stations,

creation of new State level export promotionindustrial parks/zones,

augmenting common facilities in the existingzones,

equity participation in infrastructure projects,

development of minor ports and jetties,

assistance in setting up of common effluenttreatment facilities,

stabilizing power supply


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Marketing Development

Assistance (MDA ) Financial assistance for a range of

export promotion activities implemented

by export promotion councils, industryand trade associations

Participation in Trade Fairs and Buyer

Seller meets abroad or in India, exportpromotion seminars


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Towns of Export Excellence

Industrial cluster-towns such as Tirupur forhosiery, Panipat for woollen blanket, Ludhiana

for woollen knitwear Common service providers in these areas will

be entitled for facility of EPCG scheme.

Selected towns producing goods ofRs. 1000 crore or more will be notified asTowns of Exports Excellence on the basis ofpotential for growth in exports


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Towns of Export Excellence in theHandloom, Handicraft, Agriculture and

Fisheries sector, the threshold limitwould be Rs 250 crores.

In Kerala, Kannur for handlooms and

Aroor for seafood have been identifiedas Towns of Export Excellence


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Brand Promotion and Quality

Attaining internationally acceptedstandards of quality for manufacturers

and exporters Nationwide programme on quality

awareness and to promote the concept

of total quality management.


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Target Plus Scheme

Accelerate growth inexports byrewarding Star Export Houses whohave achieved a quantum growth inexports.

High performing Star Export Housesshall be entitled for a duty creditbased on incremental exportssubstantially higher than the generalannual export target fixed.


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Duty Entitlement Passbook Scheme

(DEPB) Neutralise the incidence of Customs duty

on the import content of the exportproduct

The neutralisation shall be provided byway of grant of duty credit against the

export product Under the DEPB, an exporter may apply

for credit, as a specified percentage ofFOB value of exports, made in freely

convertible currency The DEPB scheme will continue to be

operative until it is replaced by a newscheme which will be drawn up in

consultation with exporters

E t P ti C it l G d


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Export Promotion Capital Goods

Scheme

Import of capital goods for preproduction, production and postproduction (including CKD/SKDthereof as well as computer software

systems) at 5% Customs dutysubject to an export obligationequivalent to 8 times of duty savedon capital goods imported underEPCG scheme to be fulfilled over aperiod of 8 years reckoned from thedate of issuance of licence


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Capital goods would be allowed at0% duty for exports of agricultural

products and their value addedvariants


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Agricultural Exports Agri Export Zones Scheme which

embodies a farm to portapproach and underwhich 20 zones were sanctioned under the

Agri-Export Policy years ago

Transport assistance is proposed to be made

available for export of fresh and processedfruits, vegetables, floriculture, poultry, dairyproducts and products of wheat and rice.

Vishesh Krishi Upaj Yojana(Special

Agricultural Produce Scheme) for promotingthe export of fruits, vegetables, flowers, minorforest produce, and their value addedproducts has been introduced.

S i E t


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Services Exports

An exclusive Export Promotion Council forServices.

The EPC shall:

Map opportunities for key services in key

markets and develop strategic market access

programmes for each component of the matrix. Co-ordinate with sectoral players in

undertaking intensive brand building andmarketing programmes in target markets.

Make necessary interventions with regard topolicies, procedures and bilateral/ multilateralissues, in co-ordination with recognized nodalbodies of the services industry


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Common Facility Centres for use byhome-based service providers,

particularly in areas like Engineering & Architectural design,

Multi-media operations,

Software developers etc

in State and District-level towns, to draw in avast multitude of home-based professionalsinto the services export arena.


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Special Economic Zones

SEZ is a specifically delineated duty freeenclave and shall be deemed to be foreignterritory for the purposes of trade operationsand duties and tariffs.

Goods and services going into the SEZ areafrom DTA shall be treated as exports andgoods coming from the SEZ area into DTAshall be treated as if these are being

imported. SEZ units may be set up for manufacture of

goods and rendering of services

The private sector has been actively

associated with the development of SEZs


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Under the Special Economic Zone Schemeannounced in 2000,

4 existing EPZs were converted into SEZ

13 new SEZs were given approval (as on 31-03-2002).

The Exim Policy 2002-07 has offered several fiscalincentives to units in the SEZs.

Exemption to SEZ units from External CommercialBorrowings restrictions, and, freedom to makeoverseas investment and carry out commodityhedging.


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Free Trade & Warehousing Zones

special category of Special Economic Zones

with a focus on trading and warehousing.

established in areas proximate to seaports,airports or dry ports so as to offer easyaccess by rail and road.

creation of world-class infrastructure forwarehousing of various products, state-of-the-art equipment, transportation and handlingfacilities, commercial office-space, water,

power, communications and connectivity, withone-stop clearance of import and exportformality, to support the integrated Zones asinternational trading hubs.


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Export Oriented Units (EOU),

Electronic HardwareTechnology Park (EHTP),

Software Technology Park

(STP) , Bio-Technology Park

(BTP)

Units undertaking to export their entireproduction of goods and services(except permissible sales in the DTA)


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For manufacture of goods, includingrepair, re-making, reconditioning, re-

engineering, and rendering ofservices

Export of Special Chemicals,Organisms, Materials, Equipment and

Technologies (SCOMET) shall besubject to fulfillment of the conditionsindicated in the ITC (HS).

Ref: http://commin.nic.in/

http://sezindia.nic.in/
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