ASSIGNMENTASSIGNMENT

CHANGE CHANGE IN IN

EXPORT IMPORT POLICYEXPORT IMPORT POLICY

Submitted By:Submitted By:Ambika Gupta Akanksha Ambika Gupta Akanksha JainJain06417003909 06417003909 05817003909 05817003909

Submitted To:Submitted To:Dr. Ajay RathoreDr. Ajay Rathore

BUSINESS ENVIRONMENTBUSINESS ENVIRONMENT

EXIM POLICYEXIM POLICY

► EXIM stands for export and import.EXIM stands for export and import.► EXIM POLICY OR FOREIGN TRADE POLICY EXIM POLICY OR FOREIGN TRADE POLICY is a set of is a set of

guidelines and instructions and various policy decision taken by guidelines and instructions and various policy decision taken by the government in the sphere of foreign trade i.e. with respect to the government in the sphere of foreign trade i.e. with respect to import and export of the country.import and export of the country.

► It is prepared and announced by the central government(Ministry It is prepared and announced by the central government(Ministry OF Commerce)OF Commerce)

Aspect of EXIM Policy:Aspect of EXIM Policy: Import policyImport policy:- which is concerned with regulation and :- which is concerned with regulation and

management of imports.management of imports. Export policyExport policy:- which is concerned with exports not only :- which is concerned with exports not only

promotion but also regulation. promotion but also regulation.

Legal frameworkLegal framework Legal framework for foreign trade has provided by Foreign Legal framework for foreign trade has provided by Foreign

Trade (Development And Regulation) Act 1992 which Trade (Development And Regulation) Act 1992 which replaced the Imports and Exports (Control) Act 1947.replaced the Imports and Exports (Control) Act 1947.

Beside this act there are some other laws also which control Beside this act there are some other laws also which control the trade in certain items like export of coffee is regulated by the trade in certain items like export of coffee is regulated by Indian Coffee Act 1942 and export of tea is regulated by Tea Indian Coffee Act 1942 and export of tea is regulated by Tea Act 1953 etc.Act 1953 etc.

Section-5 of this act gives power to central government to Section-5 of this act gives power to central government to announce the Export Import policy for the country.announce the Export Import policy for the country.

General objective of EXIM policy:-General objective of EXIM policy:- Promoting exports and augmenting foreign exchange earnings.Promoting exports and augmenting foreign exchange earnings. Regulating export when ever it is necessary for the purpose of Regulating export when ever it is necessary for the purpose of

either avoid competition among the Indian exporters or ensuring either avoid competition among the Indian exporters or ensuring domestic availability of essential items.domestic availability of essential items.

To restrict country’s imports and provide a sheltered market for To restrict country’s imports and provide a sheltered market for domestic industries for rapid growth.domestic industries for rapid growth.

Initially the EXIM Policy was introduced for the period of three Initially the EXIM Policy was introduced for the period of three years with main objective to boost theyears with main objective to boost the export business export business in India. in India. After 1992, it is being made for 5 years.After 1992, it is being made for 5 years.

Some change has also been introduced annually in it.Some change has also been introduced annually in it.

EXIM Policy 1985EXIM Policy 1985

►In the year 1985, the government of India In the year 1985, the government of India adopted three year EXIM Policy for first time adopted three year EXIM Policy for first time which was advocated by Alexandra committee which was advocated by Alexandra committee in 1978.in 1978.

►Its main objectives were:Its main objectives were: To stablize the export and import policy.To stablize the export and import policy. To remove uncertainity so that industries could To remove uncertainity so that industries could

frame long term goals.frame long term goals.

►Following steps were announced:-Following steps were announced:- Strengthening the base of export production.Strengthening the base of export production. Improvement in administration.Improvement in administration. Relaxation in imports to promote exports.Relaxation in imports to promote exports. To provide facility for technological improvements.To provide facility for technological improvements. Import substitution method in selected spheres.Import substitution method in selected spheres. To help Indian products to compete in foreign market.To help Indian products to compete in foreign market. Relaxing the process of getting inputs.Relaxing the process of getting inputs.

EXIM POLICY 1990EXIM POLICY 1990

► The government announced on April 30, 1990 a new export The government announced on April 30, 1990 a new export import policy for a 3 year period.import policy for a 3 year period.

► Objectives:-Objectives:- To encourage rapid and sustained growth in export.To encourage rapid and sustained growth in export. To facilitate availability of necessary imported inputs.To facilitate availability of necessary imported inputs. To simplify and streamline the procedures of import licensing To simplify and streamline the procedures of import licensing

and export promotion.and export promotion. To support research and development institution for building up To support research and development institution for building up

their scientific and technological capability.their scientific and technological capability. To promote efficient import substitution and self reliance.To promote efficient import substitution and self reliance.

► Sailent feature of policy are:-Sailent feature of policy are:- List of items imported under open general licence(OGL) were List of items imported under open general licence(OGL) were

expanded.expanded.

Number of capital goods item permitted under OGL was Number of capital goods item permitted under OGL was increased was increased from 1261 to 1343.increased was increased from 1261 to 1343.

Import of certain raw materials such as petroleum, products, Import of certain raw materials such as petroleum, products, fertilizers, seeds etc. were canalised through public sector fertilizers, seeds etc. were canalised through public sector agencies.agencies.

An automatic licensing was introduced under which upto some An automatic licensing was introduced under which upto some percent of the value of previous year’s licence can be imported.percent of the value of previous year’s licence can be imported.

For registered exporters, the concept of net foreign exchange For registered exporters, the concept of net foreign exchange earning was made a guiding criterion for issue of licences. earning was made a guiding criterion for issue of licences.

Under the scheme of registration of export house, the average Under the scheme of registration of export house, the average annual of net foreign exchange earning for base period should annual of net foreign exchange earning for base period should not be less than Rs. 5 crores and for trading houses, it should not not be less than Rs. 5 crores and for trading houses, it should not be less than Rs. 20 crores.be less than Rs. 20 crores.

Scheme of Star Trading House was introduced for exported with Scheme of Star Trading House was introduced for exported with average annual of net foreign exchange earning of Rs. 75 crore in average annual of net foreign exchange earning of Rs. 75 crore in the preceeding three licensing period of the base period.the preceeding three licensing period of the base period.

Under the Duty Exemption Scheme, Blanket Advance licensing Under the Duty Exemption Scheme, Blanket Advance licensing was introduced for manfacturer exporters having a minimum net was introduced for manfacturer exporters having a minimum net foreign exchange earning of Rs. 10 crore in the preceeding three foreign exchange earning of Rs. 10 crore in the preceeding three years.years.

►Evaluation of policy:-Evaluation of policy:-

Critics have noted following points:-Critics have noted following points:- Adverse effect on the growth of capital goods Adverse effect on the growth of capital goods

industry in india.industry in india. Import policy likely to hit small scale industries.Import policy likely to hit small scale industries. Adverse effect on indigeneous industry.Adverse effect on indigeneous industry. Technological degrading in the name of Technological degrading in the name of

technological upgrading.technological upgrading.

► the Government of India for the first time introduced the Indian Exim Policy on April I, 1992. In order to bring stability and continuity, the Export Import Policy was made for the duration of 5 years. However, the Central Government reserves the right in public interest to make any amendments to the trade Policy in exercise of the powers conferred by Section-5 of the Act.

►Objective:- liberalise imports boost exports.

► Export Import PolicyExport Import Policy  is believed to be an important   is believed to be an important step towards the economic reforms of India step towards the economic reforms of India

Main steps taken are:-Main steps taken are:-► introduction of the duty-free Export Promotion

Capital Goods (EPCG) scheme► strengthening of the Advance Licensing System► waiving of the condition on export proceeds

realisation► rationalisation of schemes related to Export

Oriented Units and units in the Export Processing Zones.

EXIM POLICY(1997 -2002EXIM POLICY(1997 -2002))

► With time the Exim Policy 1992-1997 became old, and aWith time the Exim Policy 1992-1997 became old, and aNew Export Import Policy was need for the smooth functioning New Export Import Policy was need for the smooth functioning of the Indian export import trade. Hence, the Government of of the Indian export import trade. Hence, the Government of India introduced a new Exim Policy for the year 1997-2002. India introduced a new Exim Policy for the year 1997-2002.

► This policy has further simplified the procedures and reduced the This policy has further simplified the procedures and reduced the interface between exporters and the Director General of  Foreign interface between exporters and the Director General of  Foreign Trade (DGFT) by reducing the number of documents required Trade (DGFT) by reducing the number of documents required for export by halffor export by half

..► Import has been further liberalized and better efforts have been Import has been further liberalized and better efforts have been

made to promote Indian exports in international trade. made to promote Indian exports in international trade.

► Objectives:-Objectives:- To accelerate the economy from low level of economic activities to To accelerate the economy from low level of economic activities to

high level of economic activities by making it a globally oriented high level of economic activities by making it a globally oriented vibrant economy and to derive maximum benefits from expanding vibrant economy and to derive maximum benefits from expanding global market opportunities.global market opportunities.

To motivate sustained economic growth by providing access to To motivate sustained economic growth by providing access to essential raw materials, intermediates, components,' consumables essential raw materials, intermediates, components,' consumables and capital goods.and capital goods.

To improve the technological strength and efficiency of Indian To improve the technological strength and efficiency of Indian agriculture, industry and services, thereby, improving their agriculture, industry and services, thereby, improving their competitiveness. competitiveness.

To create new employment. Opportunities and encourage the To create new employment. Opportunities and encourage the attainment of internationally accepted standards of qualityattainment of internationally accepted standards of quality

. . To give quality consumer products at practical prices. To give quality consumer products at practical prices.

Policy were:-Policy were:-►   Liberalization:- Liberalization:- A very important feature of the policy is A very important feature of the policy is

liberalization.  It has substantially eliminated licensing, liberalization.  It has substantially eliminated licensing, quantitative restrictions and other regulatory and discretionary quantitative restrictions and other regulatory and discretionary controls. All goods, except those coming under negative list, may controls. All goods, except those coming under negative list, may be freely imported or exported. be freely imported or exported.

► Imports Liberalization:- Imports Liberalization:- Of 542 items from the restricted list Of 542 items from the restricted list 150 items have been transferred to Special Import Licence (SIL) 150 items have been transferred to Special Import Licence (SIL) list and remaining 392 items have been transferred to Open list and remaining 392 items have been transferred to Open General Licence (OGL) List.General Licence (OGL) List.

► Export promotion capital goods (EPCG) scheme:- Export promotion capital goods (EPCG) scheme:- the duty on the duty on imported capital goods under EPCG schemeimported capital goods under EPCG scheme has been reduced has been reduced from 15% to 10%. Under the zero duty EPCG scheme, the from 15% to 10%. Under the zero duty EPCG scheme, the threshold limit has been reduced from rs. 20 crore to rs. 5 crore threshold limit has been reduced from rs. 20 crore to rs. 5 crore for agricultural and allied sectorsfor agricultural and allied sectors. .

► Advance licence scheme:- Advance licence scheme:- under advance license scheme, the under advance license scheme, the period for export obligation has been extended from 12 months period for export obligation has been extended from 12 months to 18 months. A further extension for six months can be given on to 18 months. A further extension for six months can be given on payment of 1 % of the value of unfulfilled exports.payment of 1 % of the value of unfulfilled exports.

► Duty entitlement pass book scheme:- Duty entitlement pass book scheme:- under the under the depb scheme depb scheme an exporter may apply for credit, as a specified percentage of fob an exporter may apply for credit, as a specified percentage of fob value of exports, made in freely convertible currency. Such credit value of exports, made in freely convertible currency. Such credit can be can be utilized for import of raw materials, intermediates, can be can be utilized for import of raw materials, intermediates, components, parts, packaging materials, etc for export purpose.components, parts, packaging materials, etc for export purpose.

Implications of Exim Policy 1997 –2002 Implications of Exim Policy 1997 –2002 The Exim Policy 1997-02 proposed with an aim to prepare a The Exim Policy 1997-02 proposed with an aim to prepare a

framework for globalizations of Indian economy.framework for globalizations of Indian economy.

In the EXIM policy 1997-02, a series of reform measures have In the EXIM policy 1997-02, a series of reform measures have been introduced in order to give boost to India's industrial growth been introduced in order to give boost to India's industrial growth and generate employment opportunities in non-agricultural and generate employment opportunities in non-agricultural sector. sector.

It encourage foreign investment in India.It encourage foreign investment in India.

The Exim Policy 1997-2002 successfully fulfills one of the The Exim Policy 1997-2002 successfully fulfills one of the India’s long terms objective of Self-reliance.India’s long terms objective of Self-reliance.

It encouraged Indian industries to undertake research and It encouraged Indian industries to undertake research and development programmers and upgrade the quality of their development programmers and upgrade the quality of their products. products.

Exim Policy 2002 – 2007Exim Policy 2002 – 2007► Mr. Murasoli maran, Former commerce minister announced the Mr. Murasoli maran, Former commerce minister announced the

exim policy 2002 - 2007 . it deals with both the export and import exim policy 2002 - 2007 . it deals with both the export and import of merchandise and services. It is worth mentioning here that the of merchandise and services. It is worth mentioning here that the exim policy: 1997 - 2002 had accorded a status of exporter to the exim policy: 1997 - 2002 had accorded a status of exporter to the business firm exporting services with effect from1.4.1999. Such business firm exporting services with effect from1.4.1999. Such business firms are known as service providers.business firms are known as service providers.

► Objectives:-Objectives:-o To encourage economic growth of India by providing supply of To encourage economic growth of India by providing supply of

essential raw materials, intermediates, components, consumables essential raw materials, intermediates, components, consumables and capital goods required for augmenting production and and capital goods required for augmenting production and providing services. providing services.

o To improve the technological strength and efficiency of Indian To improve the technological strength and efficiency of Indian agriculture, industry and services, thereby improving their agriculture, industry and services, thereby improving their competitive strength competitive strength

o To facilitate sustained growth in exports to attain a share of atleast To facilitate sustained growth in exports to attain a share of atleast 1% of global merchandise trade. 1% of global merchandise trade.

o To provide consumers with good quality products and To provide consumers with good quality products and services at internationally competitive prices while at services at internationally competitive prices while at the same time creating a level playing field for the the same time creating a level playing field for the domestic producers.domestic producers.

► Policy are:-Policy are:- Special economic zones (sezs):- Special economic zones (sezs):- offshore banking offshore banking

units shall be permitted in sezs to indian banks. Units units shall be permitted in sezs to indian banks. Units in SEZ would be permitted to undertake hedging of in SEZ would be permitted to undertake hedging of commodity price risks, provided such transactions commodity price risks, provided such transactions are undertaken by the units on stand-alone basis. It are undertaken by the units on stand-alone basis. It has also been decided to permit external commercial has also been decided to permit external commercial borrowings for a tenure of less than three years in borrowings for a tenure of less than three years in sezs. It is exempted from CRR and SLR.sezs. It is exempted from CRR and SLR.

Employment-Oriented Employment-Oriented a)a) Agriculture: Agriculture: Export restrictions like registration and packaging Export restrictions like registration and packaging

requirement are removed. Quantitative and packaging requirement are removed. Quantitative and packaging restrictions have been removed. Restrictions on export of all restrictions have been removed. Restrictions on export of all cultivated varieties of seed, except jute and onion, removed. To cultivated varieties of seed, except jute and onion, removed. To promote export of agro and agro based products, 20 agri export promote export of agro and agro based products, 20 agri export zones have been notified. In order to promote diversification of zones have been notified. In order to promote diversification of agriculture, transport subsidy shall be available.agriculture, transport subsidy shall be available.

b) Cottage Sector and Handicrafts:b) Cottage Sector and Handicrafts: An amount of Rs. 5 crore An amount of Rs. 5 crore under Market Access Initiative (MAI) has been earmarked for under Market Access Initiative (MAI) has been earmarked for promoting cottage industry. These units shall be entitled to the promoting cottage industry. These units shall be entitled to the benefit of Export House status on achieving lower average export benefit of Export House status on achieving lower average export performance of Rs.5 crore as against Rs. 15 crore for others. The performance of Rs.5 crore as against Rs. 15 crore for others. The units in handicraft sector shall be entitled to duty free imports of units in handicraft sector shall be entitled to duty free imports of an enlarged list of items as embellishments upto 3% of FOB an enlarged list of items as embellishments upto 3% of FOB value of their exports. value of their exports.

c) Small Scale Industry: c) Small Scale Industry: Common service providers in these areas Common service providers in these areas shall be entitled for facility of EPCG scheme. Such areas will shall be entitled for facility of EPCG scheme. Such areas will receive priority for assistance for identified critical infrastructure receive priority for assistance for identified critical infrastructure gaps from the scheme on Central Assistance to States. gaps from the scheme on Central Assistance to States. Entitlement for Export House status at Rs. 5 crore.Entitlement for Export House status at Rs. 5 crore.

d) Textiles: d) Textiles: Sample fabrics permitted duty free within the 3% limit Sample fabrics permitted duty free within the 3% limit for trimmings and embellishments. Duty Entitlement Passbook for trimmings and embellishments. Duty Entitlement Passbook (DEPB) rates for all kinds of blended fabrics permitted. Such (DEPB) rates for all kinds of blended fabrics permitted. Such blended fabrics to have the lowest rate as applicable to different blended fabrics to have the lowest rate as applicable to different constituent fabrics. constituent fabrics.

e) Gem & Jewellery : e) Gem & Jewellery : Customs duty on import of rough diamonds Customs duty on import of rough diamonds is being reduced to 0%. Licensing regime for rough diamond is is being reduced to 0%. Licensing regime for rough diamond is being abolished. This should help the country emerge as a major being abolished. This should help the country emerge as a major international centre for diamondsinternational centre for diamonds

Technology-orientedTechnology-orientedElectronic Hardware: Electronic Hardware: The electronic hardware technology park The electronic hardware technology park (EHTP) scheme is being modified to enable the sector to face the (EHTP) scheme is being modified to enable the sector to face the zero duty regime under ita(information technology agreement).zero duty regime under ita(information technology agreement).

Projects: Projects: Free import of equipment and other goods used abroad Free import of equipment and other goods used abroad for more than one year.for more than one year.

Growth-OrientedGrowth-Oriented

Strategic Package for Status Holders:-Strategic Package for Status Holders:-The status holders shall The status holders shall be eligible for the following new/ special facilities: be eligible for the following new/ special facilities: Licence/Certificate/Permissions and Customs clearances for both Licence/Certificate/Permissions and Customs clearances for both imports and exports on self-declaration basis. Fixation of Input-imports and exports on self-declaration basis. Fixation of Input-Output norms on priority. Priority Finance for medium and long Output norms on priority. Priority Finance for medium and long term capital requirement as per conditions notified by RBI. term capital requirement as per conditions notified by RBI. Exemption from compulsory negotiation of documents through Exemption from compulsory negotiation of documents through banks.banks.

Implications:Implications:► This policy focused on all round development of India This policy focused on all round development of India

whather it was technology oriented or growth oriented.whather it was technology oriented or growth oriented.► The contribution of agriculture and allied sector was The contribution of agriculture and allied sector was

also increased to exports with the help of certain also increased to exports with the help of certain privilleges and incentives.privilleges and incentives.

► The cottage industry has also started to contribute to The cottage industry has also started to contribute to exports.exports.

► It also focused on small and medium sector enterprises.It also focused on small and medium sector enterprises.► It also helped in developing the industrial sector by It also helped in developing the industrial sector by

importing capital and raw material goods duty free.importing capital and raw material goods duty free.

EXIM POLICY(2004-2009)EXIM POLICY(2004-2009)

► Mr. Kamal Nath, Union Commerce Minister announced Mr. Kamal Nath, Union Commerce Minister announced the foreign trade policy for 5 years on 31 august 2004.the foreign trade policy for 5 years on 31 august 2004.

►Objectives:-Objectives:- To double India’s percentage share of global To double India’s percentage share of global

merchandise trade from 0.7% in 2003 to 1.5% in 2009.merchandise trade from 0.7% in 2003 to 1.5% in 2009.

To act as an effective instrument of economic growth To act as an effective instrument of economic growth by giving a thrust to employment generation especially by giving a thrust to employment generation especially in semi-urban or rural areas.in semi-urban or rural areas.

► Strategies to achieve these objective are:-Strategies to achieve these objective are:- Unshackling of control.Unshackling of control. Creating an atmosphere of trust and transparency.Creating an atmosphere of trust and transparency. Simplifying procedures and bringing down transaction costs.Simplifying procedures and bringing down transaction costs. Adopting fundamental principle that duties and levies should not Adopting fundamental principle that duties and levies should not

be exported.be exported. Facilitating development of India as a global hub for Facilitating development of India as a global hub for

manufacturing, trading and servicesmanufacturing, trading and services Identifying and nuturing special focus areas to facilitate Identifying and nuturing special focus areas to facilitate

development. development. Facilitating technological and infrastructural upgradation of all Facilitating technological and infrastructural upgradation of all

the sectors of Indian Economy.the sectors of Indian Economy.

► Policy are:-Policy are:- Special Focus Initiatives:- Special Focus Initiatives:- With a view to doubling percentage With a view to doubling percentage

share of global trade within 5 years and expanding employment share of global trade within 5 years and expanding employment opportunities, especially in semi urban and rural areas, certain opportunities, especially in semi urban and rural areas, certain special focus initiatives have been identified for the agriculture, special focus initiatives have been identified for the agriculture, handlooms, handicraft, gems & jewellery and leather sectors. handlooms, handicraft, gems & jewellery and leather sectors.

Agriculture:-Agriculture:- A new scheme called the Vishesh Krishi Upaj A new scheme called the Vishesh Krishi Upaj Yojana (Special Agricultural Produce Scheme) for promoting the Yojana (Special Agricultural Produce Scheme) for promoting the export of fruits, vegetables, flowers, minor forest produce, and export of fruits, vegetables, flowers, minor forest produce, and their value added products has been introduced. Import of capital their value added products has been introduced. Import of capital goods shall be permitted duty free under the EPCG Scheme.goods shall be permitted duty free under the EPCG Scheme.

Handlooms and HandicraftHandlooms and Handicraft:- specific funds would be :- specific funds would be earmarked for promoting handloom and handicraft exports. Duty earmarked for promoting handloom and handicraft exports. Duty free import entitlement of specified trimmings and free import entitlement of specified trimmings and embellishments shall be 5% of FOB value of exports during the embellishments shall be 5% of FOB value of exports during the previous financial year. New towns of export excellence with a previous financial year. New towns of export excellence with a threshold limit of Rs 250 crore shall be notified.threshold limit of Rs 250 crore shall be notified.

Gems & Jewellery:-Gems & Jewellery:- Import of gold of 18 carat and above shall Import of gold of 18 carat and above shall be allowed under the replenishment scheme. Duty free import be allowed under the replenishment scheme. Duty free import entitlement of consumables for metals other than Gold, Platinum entitlement of consumables for metals other than Gold, Platinum shall be 2% of FOB value of exports during the previous shall be 2% of FOB value of exports during the previous financial year. Duty free re-import entitlement for rejected financial year. Duty free re-import entitlement for rejected jewellery shall be 2% of the FOB value of exportsjewellery shall be 2% of the FOB value of exports

Board of Trade:Board of Trade: The Board of Trade shall be revamped and The Board of Trade shall be revamped and given a clear and dynamic role in advising government on given a clear and dynamic role in advising government on relevant issues connected with Foreign Trade Policy. There relevant issues connected with Foreign Trade Policy. There would be a process of continuous interaction between the Board would be a process of continuous interaction between the Board of Trade and Government in order to achieve the desired of Trade and Government in order to achieve the desired objective of boosting Indiaobjective of boosting India

Export promotion scheme: Export promotion scheme: A new scheme called “ target plus” A new scheme called “ target plus” has been introduced. Duty free credit would be entitled to has been introduced. Duty free credit would be entitled to exporters on incremental exports. For incremental growth of over exporters on incremental exports. For incremental growth of over 20%, 25% and 100%, the duty free credit would be 5%, 10% and 20%, 25% and 100%, the duty free credit would be 5%, 10% and 15% respectively, of fob value of incremental export.15% respectively, of fob value of incremental export.

Service export: Service export: Scheme called “served from india” as a brand Scheme called “served from india” as a brand instantly recognized abroad in which individual service providers instantly recognized abroad in which individual service providers earning foreign exchange of Rs. 10 lakh would be elligible for earning foreign exchange of Rs. 10 lakh would be elligible for 10% of total foreign exchange earning.10% of total foreign exchange earning.

Duty free import under EPGC (Export promotion Capital Duty free import under EPGC (Export promotion Capital goods):goods): The scheme allows import of capital goods for pre The scheme allows import of capital goods for pre production, production and post production at 5% Customs duty. production, production and post production at 5% Customs duty. Capital goods would be allowed at 0% duty for exports of Capital goods would be allowed at 0% duty for exports of agricultural products. agricultural products.

Export Oriented unit(EOUs):- Export Oriented unit(EOUs):- EOUs shall be exempted from EOUs shall be exempted from service tax in proportion to their exported goods and services.service tax in proportion to their exported goods and services.

New stautus hoder categorizationNew stautus hoder categorization:- One star export house: Rs. :- One star export house: Rs. 25 crore, two star export house: Rs. 100 crore, three star export 25 crore, two star export house: Rs. 100 crore, three star export house: Rs. 500 crore, four star export house: Rs. 1500 crore and house: Rs. 500 crore, four star export house: Rs. 1500 crore and five star export house: Rs. 5000 crorefive star export house: Rs. 5000 crore

It will be entitled to a number of privileges including fast track It will be entitled to a number of privileges including fast track clearance procedure, exemption from furnishing back guarantees clearance procedure, exemption from furnishing back guarantees etc.etc.

Import of second hand capital goods shall be permitted without Import of second hand capital goods shall be permitted without any age restrictionany age restriction

Bio technology park is setup.Bio technology park is setup.

Duty Drawback:Duty Drawback: The The Duty Drawback SchemeDuty Drawback Scheme is administered is administered by the Directorate of Drawback, Ministry of Finance. Under by the Directorate of Drawback, Ministry of Finance. Under Duty Drawback scheme, an exporter is entitled to claim. Duty Drawback scheme, an exporter is entitled to claim. Indian Indian Customs Duty Customs Duty paid on the imported goods and paid on the imported goods and Central Excise Central Excise DutyDuty paid on indigenous raw materials or components. paid on indigenous raw materials or components.

Excise Duty Refund: Excise Duty Excise Duty Refund: Excise Duty is a tax imposed by the is a tax imposed by the Central Government on goods manufactured in India. Excise Central Government on goods manufactured in India. Excise duty is collected at source, i.e., before removal of goods from the duty is collected at source, i.e., before removal of goods from the factory premises. Export goods are totally exempted from central factory premises. Export goods are totally exempted from central excise duty.excise duty.

Neutralising high fuel costsNeutralising high fuel costs: Fuel costs to be rebated : Fuel costs to be rebated by it in Standard Input Output Norms (SIONs) for all by it in Standard Input Output Norms (SIONs) for all export products. This would enhance the cost export products. This would enhance the cost competitiveness of our export products. competitiveness of our export products.

Re-location of industries: Re-location of industries: To encourage re-location of To encourage re-location of industries to India, plant and machineries would be industries to India, plant and machineries would be permitted to be imported without a licence, where the permitted to be imported without a licence, where the depreciated value of such relocating plants exceeds Rs. depreciated value of such relocating plants exceeds Rs. 50 crores. 50 crores.

► Foreign Trade Warehousing Zones:Foreign Trade Warehousing Zones: Proposals for setting up of FTWZs may Proposals for setting up of FTWZs may be made by public sector undertakings or public limited companies or by joint be made by public sector undertakings or public limited companies or by joint ventures in technical collaboration with experienced infrastructure developers. ventures in technical collaboration with experienced infrastructure developers. The proposals shall be considered by the Board of Approval in the The proposals shall be considered by the Board of Approval in the Department of Commerce. On approval, the developer will be issued a letter Department of Commerce. On approval, the developer will be issued a letter of permission for the development, operation and maintenance of such of permission for the development, operation and maintenance of such FTWZ. Foreign Direct Investment would be permitted up to 100% in the FTWZ. Foreign Direct Investment would be permitted up to 100% in the development and establishment of the zones and their infrastructural facilities. development and establishment of the zones and their infrastructural facilities. The proposal must entail a minimum outlay of Rs.100 crores for the creation The proposal must entail a minimum outlay of Rs.100 crores for the creation and development of the infrastructure facilities, with a minimum built up area and development of the infrastructure facilities, with a minimum built up area of five lakh sq.mts.of five lakh sq.mts.

► DFIA: DFIA: Effective from 1st May, 2006, Effective from 1st May, 2006, Duty Free Import Duty Free Import AuthorisationAuthorisation or DFIA or DFIA in short is issued to allow duty free import of inputs which are used in short is issued to allow duty free import of inputs which are used in the manufacture of the export product (making normal allowance for in the manufacture of the export product (making normal allowance for wastage), and fuel, energy, catalyst etc. which are consumed or utilised in the wastage), and fuel, energy, catalyst etc. which are consumed or utilised in the course of their use to obtain the export product. Duty Free Import course of their use to obtain the export product. Duty Free Import Authorisation is issued on the basis of inputs and export items given under Authorisation is issued on the basis of inputs and export items given under Standard Input and Output Standard Input and Output NormsNorms(SION).(SION).

►Deemed ExportDeemed Export is a special type of is a special type of transaction in the Indian Exim policy in transaction in the Indian Exim policy in which the payment is received before which the payment is received before the goods are delivered. The payment the goods are delivered. The payment can be done in Indian Rupees or in can be done in Indian Rupees or in Foreign Exchange. As the Foreign Exchange. As the deemed exportdeemed export is also a source of foreign exchange, so is also a source of foreign exchange, so the Government of India has given the the Government of India has given the benefit duty free import of inputs benefit duty free import of inputs

► Implication of policy:-Implication of policy:- It is claimed that first time the nation has presented such a comprehensive It is claimed that first time the nation has presented such a comprehensive

policy. But in it there is not anything significant about import development.policy. But in it there is not anything significant about import development.

This policy provide benefit to some thrust areas which are agriculture, This policy provide benefit to some thrust areas which are agriculture, handicrafts, handlooms etc. which are dominated by small and medium handicrafts, handlooms etc. which are dominated by small and medium enterprises so it helped in boosting export and generating employment.enterprises so it helped in boosting export and generating employment.

By rationalizing star export houses into five star export house, it helped in By rationalizing star export houses into five star export house, it helped in encouraging small export house.encouraging small export house.

It also focussed on service industry.It also focussed on service industry.

Target plus scheme act as an incentive to exporter.Target plus scheme act as an incentive to exporter.

All goods and services were exempted from service tax.All goods and services were exempted from service tax.

No additional custom duty on import of capital No additional custom duty on import of capital goods for marine and electronic sector.goods for marine and electronic sector.

In an attempt to encourage small scale sector, In an attempt to encourage small scale sector, they are given triple weightage to include in they are given triple weightage to include in export house or trade house.export house or trade house.

All goods and services were exempted from All goods and services were exempted from service taxservice tax

Uneffective implementation make difficult to Uneffective implementation make difficult to achieve the real objective of the policy.achieve the real objective of the policy.

EXIM POLICY 1999-2000EXIM POLICY 1999-2000► Failure to increase exports and facilitate imports as well as to Failure to increase exports and facilitate imports as well as to

keep the trade balance gap within reasonable limits during 1996-keep the trade balance gap within reasonable limits during 1996-97 and 1998-99 forced Mr. Ramkrishna Hedge, former 97 and 1998-99 forced Mr. Ramkrishna Hedge, former commerce minister to announce on 31commerce minister to announce on 31STST March 1999 the exim March 1999 the exim policy for 1999-2000.policy for 1999-2000.

► Main highlights:Main highlights: 894 items were added to free list of imports and an additional 894 items were added to free list of imports and an additional

414 items put on special import licence route.414 items put on special import licence route. The concept of free trade zones without customs intervention and The concept of free trade zones without customs intervention and

with “greater operational freedom in export activity” would be with “greater operational freedom in export activity” would be implemented. All export promotion zone is converted into Free implemented. All export promotion zone is converted into Free Trade Zone.Trade Zone.

Under the EPCG Scheme the threshold limit for zero duty capital Under the EPCG Scheme the threshold limit for zero duty capital goods was reduced from Rs. 20 crore to Rs. 1 crore for goods was reduced from Rs. 20 crore to Rs. 1 crore for chemicals, plastic and textile.chemicals, plastic and textile.

EXIM POLICY 2000-2001EXIM POLICY 2000-2001

The policy highlighted two important measures:The policy highlighted two important measures:► Setting up of special economic zoneSetting up of special economic zone This unit would be able to import raw material and capital goods This unit would be able to import raw material and capital goods

duty free. It deemed to be foreign territory for the purpose of duty free. It deemed to be foreign territory for the purpose of trade and tarrifs and goods going to it treated as deemed export. trade and tarrifs and goods going to it treated as deemed export. It would be able to obtain products from the domestic tariff It would be able to obtain products from the domestic tariff area(DTA) without paying terminal excise duty.area(DTA) without paying terminal excise duty.

► Alligning EXIM procedures with WTO norms.Alligning EXIM procedures with WTO norms. India did not remove quantitative restrictions on its import fully India did not remove quantitative restrictions on its import fully

with respect to consumer products and certain agriculture with respect to consumer products and certain agriculture products. India negotiated with many countries and aggreed to products. India negotiated with many countries and aggreed to phase out it by 2003. EXIM Policy-2000 removed it on 714 phase out it by 2003. EXIM Policy-2000 removed it on 714 items out of 1429 items.items out of 1429 items.

EXIM POLICY 2001-02EXIM POLICY 2001-02

It highlighted:It highlighted:► Removal of quntitative restrictions from all remainig items.Removal of quntitative restrictions from all remainig items.► Import restriction of the remaining 715 items were removed.Import restriction of the remaining 715 items were removed.► Imports of the second hand good, meat and primary agriculture Imports of the second hand good, meat and primary agriculture

product were allowed.product were allowed.► Import of farm products were permitted only through state Import of farm products were permitted only through state

trading agencies.trading agencies.► EPCG Scheme and DES eas extended to agriculture export as EPCG Scheme and DES eas extended to agriculture export as

well.well.► Agri economic zones were formed.Agri economic zones were formed.

EXIM Policy 2003-2004EXIM Policy 2003-2004► Poicy suggested:-Poicy suggested:-► Promotional measuresPromotional measures To promote export related infrastructure, rupee payments received for Port To promote export related infrastructure, rupee payments received for Port

handling services admissible for discharge of export obligation under EPCG handling services admissible for discharge of export obligation under EPCG To boost R &D activity, import of Prototypes shall be allowed to Actual Users To boost R &D activity, import of Prototypes shall be allowed to Actual Users

without any limit (presently restricted to 10 nos. per annum)without any limit (presently restricted to 10 nos. per annum)

► Boost to TourismBoost to Tourism Heritage Hotels, 1 and 2 star hotels and Stand Alone Restaurants extended the Heritage Hotels, 1 and 2 star hotels and Stand Alone Restaurants extended the

benefits of duty free imports admissible to Tourism Sector. benefits of duty free imports admissible to Tourism Sector. Import of all kinds of Capital Goods including office and professional Import of all kinds of Capital Goods including office and professional

equipment allowed under the Duty Free Entitlement scheme. However, import equipment allowed under the Duty Free Entitlement scheme. However, import of agriculture/dairy products and cars shall not be permitted.of agriculture/dairy products and cars shall not be permitted.

Duty Free Entitlement Certificate scheme liberalized Duty Free Entitlement Certificate scheme liberalized

► Duty Exemption SchemeDuty Exemption Scheme To offset the high power costs faced by the manufacturing To offset the high power costs faced by the manufacturing

industry, duty free Fuel shall be allowed.industry, duty free Fuel shall be allowed.► Project ExportsProject Exports Equity base of ECGC being raised from Rs 500 crores to Rs 800 Equity base of ECGC being raised from Rs 500 crores to Rs 800

crores for a better risk management of Indian exporters.crores for a better risk management of Indian exporters. National Export Insurance Account being created for ECGC to National Export Insurance Account being created for ECGC to

underwrite high value projects implemented by Indian underwrite high value projects implemented by Indian Companies abroad. Details will be worked out in consultation Companies abroad. Details will be worked out in consultation with Ministry of Finance.with Ministry of Finance.

Gold Card Scheme for credit worthy exporters with good track Gold Card Scheme for credit worthy exporters with good track record for easy availability of export credit on best terms being record for easy availability of export credit on best terms being worked out by RBI.worked out by RBI.

► Deemed ExportsDeemed Exports Deemed export facility extended for items having Zero% basic Deemed export facility extended for items having Zero% basic

Customs duty.Customs duty. Deemed export facility extended to Fertiliser & Refinery Deemed export facility extended to Fertiliser & Refinery

projects spilled over from 8th and 9th Plan periods.projects spilled over from 8th and 9th Plan periods.► Removal of Quantitative RestrictionsRemoval of Quantitative Restrictions Imports allowed freely for Gold and SilverImports allowed freely for Gold and Silver► Technical Regulations on ImportsTechnical Regulations on Imports Technical regulations applicable on imports for export production Technical regulations applicable on imports for export production

rationalised for food & textile items. rationalised for food & textile items. BIS Mandatory Quality Certification scheme on imports BIS Mandatory Quality Certification scheme on imports

amended for importers having captive consumption and in-house amended for importers having captive consumption and in-house testing facilities. testing facilities. 

EXIM POLICY 2005-06EXIM POLICY 2005-06

► The main focus of this policy is not only to increase The main focus of this policy is not only to increase export earning but the creation of more job also.export earning but the creation of more job also.

► The main area for boosting export and job creation are: The main area for boosting export and job creation are: agriculture, diary, polutory, marine etc.agriculture, diary, polutory, marine etc.

► A package of incentives and strategy has been put.A package of incentives and strategy has been put.

► For jems and jewellery sector, duty free imports of For jems and jewellery sector, duty free imports of samples upto Rs. 3 lakh are allowed.samples upto Rs. 3 lakh are allowed.

EXIM POLICY 2007-2008EXIM POLICY 2007-2008It highlighted:It highlighted:► Encouragement to agro exports and employment generation in Encouragement to agro exports and employment generation in

the agriculture sector.the agriculture sector.

► New initiative for infrastructure development namely cold New initiative for infrastructure development namely cold storage units, pack houses, reefer vans/containers, etc.,For agro storage units, pack houses, reefer vans/containers, etc.,For agro sector, is being launched.sector, is being launched.

► In line with the government objective of having all inclusive In line with the government objective of having all inclusive growth, vishesh krishi and gram udyog yojana scheme expanded growth, vishesh krishi and gram udyog yojana scheme expanded further to include forest based and agricultural products.further to include forest based and agricultural products.

► A new scheme to give impetus to exports of high tech products, A new scheme to give impetus to exports of high tech products, is being launched. Exports of specified high tech products are is being launched. Exports of specified high tech products are proposed to be rewarded.proposed to be rewarded.

► Long standing major grievance of trade is being addressed by Long standing major grievance of trade is being addressed by providing service tax exemption/remission on services rendered providing service tax exemption/remission on services rendered in India and utilised by exporters. This should bring cheers to the in India and utilised by exporters. This should bring cheers to the exporting fraternity.exporting fraternity.

► In line with the government approach to address genuine In line with the government approach to address genuine grievances, services rendered abroad and charged on exports grievances, services rendered abroad and charged on exports from India to be exempted from service tax.from India to be exempted from service tax.

► For effectively ensuring all inclusive growth for farmers and For effectively ensuring all inclusive growth for farmers and tribals, focus products scheme expanded further to include new tribals, focus products scheme expanded further to include new agro and forest products.agro and forest products.

► Exports and employment in handloom and handicraft sectors Exports and employment in handloom and handicraft sectors provided further push through duty free access to machinery and provided further push through duty free access to machinery and equipment for effluent treatment plants.equipment for effluent treatment plants.

► To sharpen core strength of promising gems and To sharpen core strength of promising gems and jewellery sectors and handicraft sector, duty free access jewellery sectors and handicraft sector, duty free access to tools, machinery and equipment proposed to be to tools, machinery and equipment proposed to be provided to give them competitive edge.provided to give them competitive edge.

► Export of rhodium polished silver jewellery to be Export of rhodium polished silver jewellery to be encouraged further.encouraged further.

► Rationalisation in the threshold criteria and Rationalisation in the threshold criteria and reclassification of status holder scheme.reclassification of status holder scheme.

EXIM POLICY 2008-2009EXIM POLICY 2008-2009Policy highlighted:-Policy highlighted:- DEPB scheme has been extended till May 2009.DEPB scheme has been extended till May 2009.

Refund of service tax on almost all the services.Refund of service tax on almost all the services.

Income tax benefit to 100% EOUs has been extended by Income tax benefit to 100% EOUs has been extended by Government.Government.

Coverage of FMS has been increased and additional 10 countries Coverage of FMS has been increased and additional 10 countries have been included. These are Mongolia, Bosnia-Herzegovina, have been included. These are Mongolia, Bosnia-Herzegovina, Albania, Macedonia, Croatia, Honduras, Djibouti, Sudan, Ghana Albania, Macedonia, Croatia, Honduras, Djibouti, Sudan, Ghana and Colombia.and Colombia.

Split-up facility under DFIA Scheme introduced.Split-up facility under DFIA Scheme introduced.

EOUs shall be allowed to pay excise duty on monthly basis, EOUs shall be allowed to pay excise duty on monthly basis, instead of the present system of paying duty on consignment instead of the present system of paying duty on consignment basis.basis.

Customs duty payable under EPCG Scheme has been reduced Customs duty payable under EPCG Scheme has been reduced from 5% to 3%.from 5% to 3%.

Setting up a new Export Promotion Council for Telecom Sector.Setting up a new Export Promotion Council for Telecom Sector.

Value of jeweler parcels, through Foreign Post Office is raised to Value of jeweler parcels, through Foreign Post Office is raised to US$ 75,000. Earlier it was from US$ 50,000.US$ 75,000. Earlier it was from US$ 50,000.

Duty free import of samples has been increased from Rs.75 000 Duty free import of samples has been increased from Rs.75 000 to Rs. 1, 00,000.to Rs. 1, 00,000.

EXIM POLICY 2009-2010EXIM POLICY 2009-2010IT HIGHLIGHTIT HIGHLIGHT► Rupees 325 Crores would be provided under Promotional Rupees 325 Crores would be provided under Promotional

Schemes for Leather, Textile etc. for exports made with effect Schemes for Leather, Textile etc. for exports made with effect from 1.4.09. from 1.4.09.

► Technical textiles and stapling machine have been added under Technical textiles and stapling machine have been added under Focus Product Scheme. Focus Product Scheme.

► STCL Limited, Diamond India Limited, MSTC Limited, Gem & STCL Limited, Diamond India Limited, MSTC Limited, Gem & Jewellery Export Promotion Council and Star Trading Houses Jewellery Export Promotion Council and Star Trading Houses (for gem and jewellery sector) have been added under the list of (for gem and jewellery sector) have been added under the list of nominated agencies notified under Para 4A.4 of Foreign Trade nominated agencies notified under Para 4A.4 of Foreign Trade Policy for the purpose of import of precious metals.The Policy for the purpose of import of precious metals.The procedure and monitoring provisions for implementation of these procedure and monitoring provisions for implementation of these additional agencies would be notified separately in line with RBI additional agencies would be notified separately in line with RBI guidelines.guidelines.

► Export obligation period against advance authorizations has been Export obligation period against advance authorizations has been extended upto 36 months in view of the present global economic extended upto 36 months in view of the present global economic slowdown. slowdown.

► At present, DEPB/Duty Credit Scrip can be used for payment of At present, DEPB/Duty Credit Scrip can be used for payment of duty only on items which are under free category. The utilization duty only on items which are under free category. The utilization is now extended for payment of duty for import of restricted is now extended for payment of duty for import of restricted items also. items also.

► Value cap applicable under DEPB have been revised upwards for Value cap applicable under DEPB have been revised upwards for products. products.

► Under EPCG scheme, in case of decline in exports of a Under EPCG scheme, in case of decline in exports of a product(s) by more than 5%, the export obligation for all product(s) by more than 5%, the export obligation for all exporters of that product(s) is to be reduced proportionately. This exporters of that product(s) is to be reduced proportionately. This provision has been extended for the year 2009-10, for exports provision has been extended for the year 2009-10, for exports during 2008-09. during 2008-09.

► In view of the prevailing global slowdown, the threshold limit for In view of the prevailing global slowdown, the threshold limit for recognition as Premier Trading House has now been reduced to recognition as Premier Trading House has now been reduced to Rs.7500 crores. Rs.7500 crores.

► Bhilwara in Rajasthan and Surat in Gujarat have been recognized Bhilwara in Rajasthan and Surat in Gujarat have been recognized as Towns of Export Excellence, for textiles and diamonds as Towns of Export Excellence, for textiles and diamonds respectively. respectively.

► Export of blood samples is now permitted without license after Export of blood samples is now permitted without license after obtaining ‘no objection certificate’ from Director General of obtaining ‘no objection certificate’ from Director General of Health Services (DGHS). Health Services (DGHS).

► Independent office of DGFT being opened at Srinagar. Independent office of DGFT being opened at Srinagar.