Submitted By:-
VISHESHWAR ORAON
13MT07IND007
FOREIGN TRADE
EXPORT
Derived from the conceptual meaning as to ship the goods and
services out of the port of a country.
Countries all over the world are interdependent, which necessitated
foreign trade.
IMPORT
Derived from the conceptual meaning as to bring in the goods and
services into the port of a country.
Import of goods normally requires involvement of
the customs authorities in both the country of import and the country
of export and are often subject to import quotas, tariffs and trade
agreements. 2
Export Import (Exim) Policy or Foreign Trade Policy (FTP) is a
set of guidelines and instructions in matters related to the import
and export of goods in India.
Established by the Directorate General of Foreign Trade (DGFT)
Regulated by The Foreign Trade Development and Regulation
Act 1992
Exim policy contains various policy decisions with respect to
import and exports of the country.
Prepared and announced by the central government.
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1.Liberalization
2.Privatization
3.globalization
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Developing export potential
Improving export performance
Encouraging foreign trade
Creating favorable balance of payment position
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Selection of product
Market selection
Product modification for customization for target market
International pricing decisions
International market promotion decision
International marketing strategy decisions
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The Union Commerce Ministry, Government of India announces the
Export Import policy in every five year. This is also called EXIM policy.
This policy is updated every year with some modifications and new
schemes. New schemes come into effect on the first day of financial
year i.e. April 1, every year. The Foreign trade Policy which was
announced on August 28, 2009 is an integrated policy for the period
2009-14. This policy is updated on every financial year.
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To arrest and reverse declining trend of exports which will be
reviewed after every two years.
To Double India's exports of goods and services by 2014.
To double India's share in global merchandise trade by 2020
(long term aim). India's share in Global merchandise exports
was 1.45% in 2008.
Simplification of the application procedure for availing various
benefits.
To set in motion the strategies and policy measures which
catalyze the growth of exports.
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Maximum export
Regulate export
Simulate economic activities
Sustainable development
Creating job opportunities
Enhanced technological strength
Achieved international standard
8/44
Market Diversification:
a) 26 new countries have been included within the ambit of Focus
Market scheme.
b) The incentives provided under Focus Market Scheme have been
increased from 2.5% to 3%.
c) Incentive available under Focus Product Scheme (FPS) raised
from 1.25% to 2%.
d) Extra products included in the scope of benefits under FPS
9/44
1.Agriculture & Village Industry:
a) A new scheme called "Vishesh Krishi Upaj Yojana (Special
Agricultural Produce Scheme)" to boost exports of fruits,
vegetables, flowers, minor forest produce and their value added
products has been introduced.
b) Capital goods imported under EPCG will be permitted to be
installed anywhere in AEZ(Agri Export Zone).
c) Import of inputs such as pesticides is permitted under Advance
authorization for agro exports.
d) Introduction of a single window system to facilitate export of
perishable agricultural product.10/44
2.Handlooms & Handicraft Sector:
a) Enhancing to 5% of Free On Board (FOB) value of exports duty free
import of trimmings and embellishments for handlooms and
handicrafts.
b) Authorizing Handicraft Export Promotion Council to import trimmings,
embellishments and samples for small manufacturers.
c) Jaipur, Srinagar and Anantnag have been recognized as Towns of
Export Excellence for handicrafts.
11/44
3.Gems & Jewellery:
a) Permission for duty free import of consumables for metals other than
gold and platinum up to 2% FOB value of exports.
b) Duty free re-import entitlement for rejected jewellery allowed up to 2%
FOB value of exports.
c) Increase in duty free import of commercial samples of jewellery to Rs.
1 lakh.
d) Permission to import of gold of 18 carat and above under the
replenishment scheme.
e) Plan to establish "Diamond Bourse(s)” with an aim to make India an
International Trading Hub .
12/44
4.Lather & Footwear:
a) Increase in the limit for duty free entitlements of import trimmings,
embellishments and footwear components for leather industry to 3% of
FOB value of exports and that for duty free import of specified items for
leather sector to 5% of FOB value of exports.
b) Import of machinery and equipment for Effluent Treatment Plants for
leather industry exempted from customs duty.
c) Re-export of unsuitable imported materials (such as raw hides and skin
and wet blue leathers) has been permitted.
d) Kanpur, Dewas and Ambur have been recognized as Towns of Export
Excellence for leather products.
13/44
5.Service Sector:
Scrip's issued under Served From India Scheme (SFIS) can now be
used for payment of duty on import of Vehicles, which are in the nature
of professional equipment.
6.Marine Sector:
a) Fisheries exempted from maintenance of average EO under EPCG
Scheme (along with 7 sectors) however Fishing Trawlers, boats,
ships and other similar items shall not be allowed for this
exemption.
b) Additional flexibility under Target Plus Scheme (TPS)/ Duty
Free Certificate of Entitlement (DFCE) Scheme for the marine
sector.
c) Marine products are considered for VKGUY scheme. 15/44
Tea Exports:
a) The existing Minimum value addition under advance
authorization scheme for export of tea is 100 %.
b) DTA (Domestic Tariff Area) sale limit of instant tea by
EOU(Export oriented units) increased from 30% to 50%.
c) Export of tea has been included under VKGUY scheme.
Pharmaceutical Sector:
Focus Product Scrip) for countries in Africa and Latin
America & some countries in Far Pharma sector included
under MLFPS (Market Linked East.
16/44
Scheme for Export Oriented Units (EOU):
a) EOUs have been allowed to sell products manufactured by them
in DTA (Domestic Tariff Area) up to a limit of 90%, without
changing the criteria of ‘similar goods’, within the overall
entitlement of 50% for DTA sale.
b) EOU allowed to procure finished goods for consolidation along
with their manufactured goods, subject to certain safeguards.
c) EOUs will now be allowed CENVAT Credit facility.
17/44
Value Added Manufacturing (VAM):
To encourage Value Added Manufactured export, a minimum
15% value addition on imported inputs under Advance
Authorization Scheme.
Engineering & Electronics Industry:
Exporters/Associations would be entitled to utilize MAI(Market
Access Initiative) & MDA(Market Development Assistance) Schemes
for promoting Electronics and Engineering industry exports.
18/44
Sports Goods & Toys:
a) Duty free import of specified specialized inputs allowed to
the extent of 3 % of FOB value of preceding financial year’s
export.
Support for Green products and products from North East:
a) Focus would be on items relating to transportation, solar
and wind power generation and other products as may be
notified which will be incentivized under Reward Schemes
of FTP.
b) In order to give a fillip to exports of products from the
north-eastern States, notified products of this region
would be incentivized under Reward Schemes.
19/44
Disposal of Manufacturing Wastes:
Disposal of manufacturing wastes / scrap will now be allowed
after payment of applicable excise duty also before fulfillment of
export obligation under Advance Authorization and EPCG
Scheme. Earlier it was allowed after fulfillment of export
obligation.
Announcements for Automobile Industry:
Those Automobile industries which have their R&D
establishment will be allowed free import of reference fuels
(petrol and diesel), upto a maximum of 5 KL per annum, which
are not manufactured in India.
20/44
Duty Exemption Schemes:
a) Enable duty- free import of inputs required for export
production.
b) Consumables like fuel, oil, energy, catalysts, etc. too are
included.
Duty Remission Schemes:
a) DEPB-introduced in 1997; grant of credit on post export
basis as specified percentage of freight on board value of
export made in freely convertible currency.
b) Duty free replenishment certificate (DFRC)-introduced on 1
April 2000; to provide the benefits of advance license on
post-export basis.
21/44
Export Promotion Industrial Park (EPIP) Scheme:
a) EPIP introduced in august 1995 & merged with Assistance
to States for Infrastructure Development of Exports (ASIDE)
from 1 April 2002.
b) Govt. through this scheme provides financial support to
create infrastructure for export production.
c) E.g.: Sitapur (Rajasthan); Bangalore; Chengalpattu(TM);
Kundli(Haryana); Medak(AP); Kakkanad(Kerala);etc.
Critical Infrastructure Balance(CIB) Scheme:
a) Introduced in 1996-1997
b) To balance capital investments for removing bottlenecks
from the path of development of infrastructure for export
production & easy transport.
22/44
Duty Exemption Passbook Scheme (DEPB):
a) The Duty Exemption Scheme enables import of inputs required for export
production.
b) The Duty Remission Scheme enables post export replenishment/ remission of
duty on inputs used in it.
Target Plus Scheme:
a)The objective of the scheme is to accelerate growth in exports by rewarding
Star Export Houses who have achieved a quantum growth in exports.
23/44
Percentage incremental growth Duty Credit Entitlement (as a % of the
incremental growth)
20% and above but below 25% 5%
25% or above but below 100% 10%
100% and above 15% (of 100%)
Advance Authorization Scheme
a) An Advance Authorisation is issued to allow duty free import of
inputs, which are physically incorporated in the export product.
b) Duty free import of mandatory spares up to 10% of the
CIF(Cost, Insurance & Freight) value of the Authorisation which
are required to be exported/ supplied with the resultant
product may also be allowed under Advance Authorisation.
Focus Market Scheme
a) Introduced with effect from 1.4.2006.
b) It provides incentives for export of products which have high
employment potential in rural and semi urban areas with a view
to offset the inherent infrastructure bottlenecks and other
associated costs involved in marketing of such products.
24/44
EPCG (Export Promotion Capital Goods) Scheme:
a) For Agro & SSI units, export obligations reduced to 6 times of
duty saved fulfillment period to 12 year in place of normal
export obligations of 8 times of duty saved and 8 years
fulfillment period.
b) Firms fulfilling 75% or more of their export obligation in half the
original obligation period, shall be freed from the balance
export obligation.
c) Submission of Chartered Engineer Certificate permitted for all
units Importing capital goods and spares in lieu of submission
of installation certificates issued by Central Excise Authorities.
d) Facility of clubbing license further liberalized by permitting
clubbing of licenses issued under same customs notification.25/44
1.Preparation for Exporting:
a) Research on the countries or regions
b) Research on the market
c) Research on the customer
2.Business Negotiation
a) Enquiry
b) Offer and counter-offer
c) Acceptance
d) Conclusion of sales contract
26/44
3.Implementation of Contract
a) Preparing goods for shipment
b) Inspection application
c) Reminding, examining and modifying L/C
d) Chartering and booking shipping space
e) Customs formality
f) Insurance
g) Documents preparation for bank negotiation
4.Settlement of Disputes
a) Conciliation
b) Arbitration
c) Litigation 27/44
Marketing and Promotion
Market Research
Credit Information
Enquiry
Offer
Acceptance
Contract
Chartering,Space Booking
Docks
Customs Formalities
Loading, Bill of Lading
Documents Preparation for Bank Negotiation
Settlement of Disputes (if any)
Checking Name of Commodity, Specification, Quantity, Packing and
Marking
Good Preparation
Preparation for Exporting
Business Negotiation
Performance of
Contract
Reply to Enquiry
Counter-offer
Reminding of L/C
Examination and Amendment of L/C
Insurance Company
Insurance Policy
Inspection Authority
Inspection Application
Certificate of Inspection
Certificate of Inspection
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1. To conduct market investigation
2. To formulate import plan for a certain commodity
3. To send inquiries to the prospective sellers overseas
4. To compare and analyze the offers or quotations received
5. To make counter-offers and decide on which offer is most
beneficial
6. To sign a purchase contract
7. To apply to a bank for opening a letter of credit
29/44
8. To book shipping space or charter a carrying vessel for taking over the cargoes, if the
contact is in terms of FOB
9. To effect insurance with the insurance company upon receipt of shipping advice
To apply for inspection if necessary
10. To attend to customs formalities to clear the goods through the customs
11. To entrust forwarding agents with all the transport arrangements from the port to the
end user’s warehouse
12. To settle disputes (if any)
30/44
The exporters
The shipping agents at the port or airport of loading
The railways(in some cases)in the exporter’s country
The road hauler(in some cases)in the exporter’s country
The port authority
The shipping company(or sea freight)
The airline(or air freight)
31/44
The insurance company or brokers
The exporter’s bank
The importer’s bank
The railways(in some cases)in the importer’s country
The road hauler(in some cases)in the importer’s country
The shipping agent at the port or airport of discharge
The importers
32/44
Bill of Lading
Commercial Invoice
Packing List
Weight Memo
Certificate of Inspection
Certificate of Origin
Insurance Policy(certificate)
Sales Contract
33/44
A. EXPORTS (including re-exports)
Exports during February, 2014 were valued at US $ 25688.94 million
(Rs.159858.16 crore)
which was 3.67 per cent lower in Dollar terms (11.47 per cent higher in Rupee
terms) than the level of US $ 26668.77 million (Rs. 143407.85 crore) during
February, 2013.
Cumulative value of exports for the period April-February 2013 -14 was US $
282777.02 million (Rs 1712422.41 crore) as against US $ 269859.25 million (Rs
1468159.38 crore) registering a growth of 4.79 per cent in Dollar terms and
growth of 16.64 per cent in Rupee terms over the same period last year.
34/44
B. IMPORTS
Imports during February, 2014 were valued at US $ 33819.14 million
(Rs.2,10,451.11 crore) representing a negative growth of 17.09 per cent in
Dollar terms and
A negative growth of 4.06 per cent in Rupee terms over the level of imports
valued at US $ 40791.98 million (Rs. 2,19,353.56 crore) in February, 2013.
Cumulative value of imports for the period April-February, 2013-14 was US $
410863.28 million (Rs. 24,74,626.88 crore) as against US $ 449788.89 million
(Rs. 24,46,387.26 crore) registering a negative growth of 8.65 per cent in Dollar
terms and growth of 1.15 per cent in Rupee terms over the same period last
year.
35/44
India exports were worth 29,213 Millions US$ in June of 2011.
Exports amount to 22% of India’s GDP.
Gems and jewellery constitute the single largest export item, 16
percent of exports.
India is also leading exporter of textile goods, engineering
goods, chemicals, leather manufactures and services.
India’s main export partners are European Union, United States,
United Arab Emirates and China.
36/44
INDIA’S EXPORTS(January 2009 – July 2011)
37/44
0
2
4
6
8
10
12
India UK USA China Japan Brazil
Pe
rce
nta
ge o
f ex
po
rts
Countries
2003
2009
39/44
(As a percentage of total world exports)
INDIA’S IMPORTS(January 2009 – July 2011)
40/44
41/44
0
2
4
6
8
10
12
14
16
18
India UK USA China Japan Brazil
Pe
rce
nta
ge o
f im
po
rts
Countries
2003
2009
42/44
(As a percentage of total world imports)
Balance of trade = Exports - Imports
A positive balance of trade is known as a trade surplus
A negative balance of trade is known as a trade deficit or,
informally, a trade gap.
The trade deficit for April-February, 2013-14 was estimated at
US $ 128086.26 million which was lower than the deficit of US $
179929.64 million during April-February, 2012-13.
India is poor in oil resources and is currently heavily dependent
on coal and foreign oil imports for its energy needs.
Other imported products are: machinery, gems, fertilizers and
chemicals.43/44
Oil imports during February, 2014 were valued at US $ 13,696.8 million which
was 3.1 per cent lower than oil imports valued at US $ 14,134.3 million in the
corresponding period last year.
Oil imports during April-February, 2013-14 were valued at US $ 1,51,840.9
million .
Which was 0.8 per cent higher than the oil imports of US $ 1,50,632.3 million in
the corresponding period last year.
Non-oil imports during February, 2014 were estimated at US $ 20,122.3 million
which was 24.5 per cent lower than non oil import f US $ 26,657.7 million in
February, 2013.
Non oil imports during April-February, 2013-14 were valued at US $ 2,59,022.4
million which was 13.4 per cent lower than the level of such imports valued a US
$ 2,99,156.6 million in April February, 2012-13.
44/44
45/44
INDIA’S BOT(July 2012 – Jan 2014)
http://www.eximkey.com
http://www.eximinfo.com
http://www.eximbankindia.in/
http://exim.indiamart.com/index.html
http://dgft.gov.in
http://www.tradingeconomics.com/india/exports
http://commerce.nic.in/tradestats/filedisplay.aspx?id=1
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