EXIM Policy of India - snscourseware.org · Export means selling abroad and import as bringing into India, any goods and services. The Government of India advises the Exim Policy

EXIM Policy of India

Dr. S.THILAGA /DoMS/EXIM MANAGEMENT/BA5060

Contents

What is EXIM policy?

Brief history about EXIM

Objectives of EXIM policy

Documents in Indian EXIM Policy

Indian imports and exports

Comparison of Post and Pre 90’s imports and exports

EXIM policy 2009-2014

Highlights of EXIM Policy 2015-2020


What is EXIMpolicy?

Also knows as Foreign Trade Policy

The foreign trade of India is guided by the Export-Import

policy of India

The Ministry of Commerce and Industry, Government of India, pronounces the

Indian EXIM policy or Export-Import policy of India.

It contains policies in the sphere of Foreign trade i.e. with respect to import &

export from the country and more especially export promotion measures, policies

and procedure related to it.

Export means selling abroad and import as bringing into India, any goods and

services.

The Government of India advises the Exim Policy of India for a phase of five

years under Section 5 of the Foreign Trade Development and Regulation Act,

1992.

The Exim Policy is renewed every year on the 31st of March and the revisions,

improvements and new proposals become effective from 1st April of every year.


Brief History aboutEXIM

In the year 1962, the Government of India selected a special Exim Policy

Committee to review the government preceding policies of export import

(Indian Exim policy).

The committee was afterward permitted by the Government of India. Mr. V.

P. Singh, the then Commerce Minister and pronounced the new Exim Policy

of India on the 12th of April, 1985.

Primarily the Export-Import Policy of India was launched for the period of

three years with main intention to boost the export business in India.


Objectives of EXIMPolicy

To establish the framework for globalisation.

To promote the productivity, competitiveness

of Indian industry.

To encourage the attainment of high &

internationally accepted standards of quality.

To increase export by facilitating access to raw materials, intermediate

components, consumables and capital goods from the international market

To generate new employment.

To provide quality consumer products at reasonable prices.


Indian top Imports andExports

Agricultural products

Automobiles

Chemicals

Food and beverage products

Industrial goods

Pharmaceuticals and

biotechnology

Defense products, etc.


India’s ForeignTrade


India’s share in GlobalTrade

According to the WTO, in merchandise trade, India was the 19th largest exporter in

the world with a share of 1.7 percent and the 12th largest importer with a share of

2.5 percent in 2013.

In commercial services, India was the 6th largest exporter in the world with a share of

3.2 percent and the 9th largest importer with a share of 2.8 percent.


Comparison of Pre 90’s & Post90’s Exim Policy

Year Impor

t (cr.)

Export

s (cr.)

Balance

of trade

(cr.)

Remarks

1948-51 650 647 -3 Excess of imports due to pent-up-

demand of war, shortage of food and

raw material due to partition, etc.

1951-56 730 622 -108 Trade deficit was largely due to

programme of industrialization which

gathered momentum and pushed up

the import of capital goods

1956-61 1080 613 -467 Excess of import due to setting of

steel plants, heavy expansion &

renovation on railways &

modernization of many industries.



Year Import

s (cr.)

Export

s (cr.)

Trade

balance

(cr.)

Remarks

1961-66 1224 747 -477 Excess imports due to defence needs

caused by aggression by China & Pakistan,

rapid industrialization, need of food grains

due to failure of crops

1985-90 28,874 18033 -10841 Huge trade balance compelled

government to approach for loan to World

Bank/IMF

1990-92 45522 38300 -7222 Push was given to export, but as a

consequence of Gulf war govt. failed to

curb imports. Govt. introduced a no. of

measures but failed to boost exports.Dr. S.THILAGA /DoMS/EXIM

MANAGEMENT/BA5060


Year Import

s (cr.)

Exports

(cr.)

Trade

balance

(cr.)

Remarks

1992-01 140740 118252 -22488 In 1992-01,slow down in exports due to-

•Depressed nature of world markets.

•Saturation of developed countries

•Increased protectionism by industrialized

countries in area of textile andclothing.

•Increasing competition from China &

Taiwan.

•In 2000-01 export was largely due to rupee

depreciation along with further trade

liberalization, more openness to foreign

investment in EOU sectors like ITDr. S.THILAGA /DoMS/EXIM

MANAGEMENT/BA5060


Year Imports

(US

$mn)

Exports

(US

$mn)

Trade

bal. (US

$mn)

Remarks

2002-03 65422 52512 -12910 Rise in oil imports, food and allied

products, capital goods

2003-04 80177 64723 -15454 Exim policy gave massive thrust to

exports by

Duty free import facility for service

sector up to earning 10lakh foreign

exchange

Liberalization of duty exemption

scheme

Besides all these measures, trade balance

is high because of imports of petroleum

products.Dr. S.THILAGA /DoMS/EXIM

MANAGEMENT/BA5060

Export Import Policy, 2009-14

Legal Framework

General Provisions regarding Import and Export

Special Focus Initiatives

Promotional Measures

Duty Exemption / Remission Schemes

Export Promotion Capital Goods Scheme

Export Oriented Units (EOUs) etc

Special Economic Zones

Deemed Exports


Aims is General

The policy aims at developing export

potential, improving export performance,

boosting foreign trade and earning

valuable foreign exchange. FTP assumes

great significance this year as India's

exports have been battered by the global

recession

A fall in exports has led to the closure of

several small- and medium-scale export-

oriented units, resulting in large-scale

unemployment.


GeneralProvisions

Exports and Imports free unless regulated

Compliance of Imports with Domestic Laws

The norms applicable to domestically produced goods shall apply to imports, unless specifically

exempted

Interpretation of Policy

The decision of DGFT shall be final and binding on all matters relating to interpretation of

policy

Procedure

DGFT may, specify procedure to be followed by an exporter or importer or by any licensing/

regional authority or by any other authority

Exemption from Policy / Procedure

DGFT may exempt any person or class or category of persons from any provision of FTP or

any procedure and may, while granting such exemption, impose some conditions

Principles of Restriction

Protection of public morals

Protection of human, animal or plant life or health

Protection of patents, trademarks and copyrights, and the prevention of deceptive practices


GeneralProvisions

Importer-Exporter Code (IEC) Number is mandatory unless specifically

exempted

Transit Facility shall be regulated in accordance with bilateral treaties between India

and those countries

Actual User Condition

Capital goods, raw materials, intermediates, components, consumables, spares,

parts, accessories, instruments and other goods, which are importable without any

restriction, may be imported by any person. However, if such imports require an

Authorization, actual user alone may import such goods unless actual user

condition is specifically dispensed with by DGFT

Second Hand Goods

Import of second hand goods, except second hand capital goods, shall be restricted

for imports and may be imported only in accordance with the provisions of FTP,

ITC(Indian Trade Classification) (HS), HBP v1(Handbook of Procedures), Public

notice or an Authorization in this regard. Import of re-manufactured goods shall

be allowed only against a license


GeneralProvisions

Import of Gifts shall be ‘free’ unless otherwise specified/ restricted

Passenger Baggage

These may be imported as part of passenger baggage without an

Authorization- household goods and personal effects, samples of items

that are freely importable, exporters coming from abroad are also allowed

to import drawings, patterns, labels, price tags, buttons, belts, trimming

and embellishments required for export

Import on Export basis

Freely exportable new or second hand capital goods, equipments,

components, parts and accessories, containers meant for packing of goods

for exports, jigs, fixtures, dies and moulds may be imported for export

without an Authorization on execution of BG(Bank Guarantee) with

Customs Authorities


GeneralProvisions

Clearance of Goods from Customs

Goods already imported / shipped / arrived, in advance, but not cleared from

Customs may also be cleared against an Authorization issued subsequently

Private / Public Bonded Warehouses for Imports

Private / Public bonded warehouses may be set up in DTA(Domestic Tariff Area).

Any person may import goods, except prohibited items, arms and ammunition,

hazardous waste and chemicals and warehouse them in such bonded warehouses.

Such goods may be cleared for home consumption whenever required. Customs

duty as applicable shall be paid at the time of clearance.

Free Exports

All goods may be exported without any restriction except to the extent that such

exports are regulated by ITC (HS) or any other provision of FTP or any other law

for the time being in force. DGFT may however, specify through a public notice

such terms and conditions according to which any goods, not included in ITC(HS),

may be exported without an Authorization


Special Focus InitiativesThe Chapter on Special Focus Initiatives

is broadly classified into:

Market Diversification

Technological Upgradation

Support to status holders

Agriculture and Village Industry

Handlooms

Handicrafts

Gems & Jewellery

Leather and Footwear

Marine Sector

Electronics and IT HardwareManufacturing Industries

Sports Goods and Toys

Green products and technologies

Incentives for Exports from the North Eastern Region


Duty Exemption/RemissionSchemes

The schemes initiated by the Government under this category are as

follows:

Export Promotion Capital Goods Scheme (EPCG)

Advance Authorization Scheme

Duty Free Import Authorization Scheme (DFIA)

Duty Entitlement Passbook (DEPB) Scheme

Duty Drawback (DBK) Scheme



in Foreign Trade Policy under followingThis scheme has been discussed

headings:

Zero duty EPCG Scheme

Concessional 3% duty EPCG Scheme

EPCG for projects

EPCG for Retail Sector

EPCG Authorization for Annual Requirement

Export Obligation

Provisions for BIFR Units



EPCG for agro units

Indigenous Sourcing of capital goods and benefits to domestic supplier

Fixation of Export Obligation

Technological Up gradation of existing EPCG machinery

Incentives for Fast Track Companies

EPCG for Green Technology Products -reduced EO


Special Economic Zones(SEZ)

Exemption from Service Tax

Single window clearance for Central and State level approvals

Exemption from State sales tax and

other levies as extendedby the respective

State Governments


Highlights of EXIM Policy 2015-2020

1st April 2015 to 31st March2020.

Vision, Mission and objectives:

• The vision is to make India a significant partner in world trade

by 2020.

• Government aims to increase India’s exports of merchandise and

services from USD 465.9 billion in 2013-14 to approximately

USD 900 billion by 2019-20.

• Raise India’s share in world exports from 2 percent to 3.5

percent.

• Initiatives such as “Make in India”, “Digital India” and “Skills

India” to create an “Export Promotion Mission” to provide a

stable and sustainable policy environment for foreign trade.Dr. S.THILAGA /DoMS/EXIM

MANAGEMENT/BA5060

The Mega Agreements: Implications for India

• Trans Pacific Partnership,

• Trans-Atlantic Trade and Investment Partnership and

• Regional Comprehensive Economic Partnership (RCEP)

These will add a completely new dimension to the global trading

system.


Market Strategy

India’s future bilateral/regional trade engagements will be with countries that

are not only promising markets but also major suppliers.

Employment-generating sectors such as textiles, agriculture, leather and gems

& jewellery will continue to receive major attention for promoting exports to

the US market.

India will focus trade promotion activities on new products with higher value

addition particularly in the categories of defence equipment, medical

equipment, construction material, processed foods, as also services.

India is negotiating Comprehensive Economic Cooperation/Partnership

Agreements with Australia and New Zealand.

Another focus area is South-East Asia. Trade integration with the CLMV

(Cambodia, Lao PDR, Myanmar and Vietnam), to enable the Indian private

sector to set up manufacturing hubs in this region


Thank you

4/18/2015Dr. S.THILAGA /DoMS/EXIM

MANAGEMENT/BA5060