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DEEMED EXPORT

Deemed Exports refers to those transactions in which goods supplied do

not leave country, and payment for such supplies is received

either in Indian rupees or in free foreign exchange.

Categories of Supply :

Following categories of supply of goods by main / sub-contractors shall beregarded as Deemed Exports under FTP, provided goods

are manufactured in India:

Supply of goods against Advance Authorization / Advance

Authorization for annual requirement / DFIA

Supply of goods to EOUs or STPs or EHTPs or BTPs

Supply of capital goods to holders of Authorizations under EPCG

Scheme

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BENEFITS OF DEEMED EXPORT Deemed exports shall be eligible for any / all of following benefits in

Deemed Exports respect of manufacture and supply of goods

qualifying as deemed exports subject to terms and conditions as in HBP

v1:-

Respect of supplies made against Advance the Supplier Authorization

/ DFIA supplier.

Shall be entitled to Advance Authorization / DFIA for intermediate

supplies.

If supplies are made against Advance Release Order (ARO) or Back

to Back Letter of Credit issued against Advance Authorization / DFIA

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RUPEE CONVERTIBILITY

Means the rupee can be freely converted into dollar, pound

sterling, yen, etc & vice versa at the rates of exchange decided

by demand & supply forces.

In India foreign exchange transactions in dollars, pounds or

any other currency are broadly classified into two accounts:

Capital Account Transaction &

Current Account Transaction

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POLICY ON FOREIGN COLLABORATIONS

The Indian government has evolved a highly elaborate set of policies &

procedures for screening & regulating foreign investments, particularly in

manufacturing. These policies & procedures are intended to promote certain

national goals which the government considers important for countrys

development.

In India there are basically two forms of foreign collaboration - financial

collaboration or it may be technical.

The approach of the Government has been roughly the same since the year1949 that is to allow foreign direct investment on preferential basis in sectors

that will be beneficial for the country.

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Contd.

The Government has set up a foreign investment promotion

board to encourage foreign investment in India. Some of the

functions of the Board include:

Speed up clearance of proposals

To review the collaborations cleared

Earmarking and ascertaining of contacts to invest in India.

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COUNTER TRADE ARRANGEMENTS

T

here has been a growing tendency in some countries to resort to tradingpractices that constitute a retreat from multilateralism. These practices are

correctively known as counter trade

The basic point: the exporter agrees to purchase from the importer his

goods either in full or partial payments for his exports. In effect counter trade

is a form of financing international trade wherein price setting and financing

are tied together in one transaction.

Counter trade may take a variety of forms, but basically it is barter or quasi-

barter arrangement that more or less explicitly links import and export

transactions.

For example, an exchange of 50,000 tons of Brazilian soya beans for 50,000

tons of Mexican black beans in 1977, involved no cash.

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INDIA JOINT VENTURES ABROAD

Ajoint venture (JV) is a business agreement in which parties agree todevelop, for a finite time, a new entity and new assets by

contributing equity.

Source: http://dspace.iimk.ac.in

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INDIAN INVESTMENT ABROAD IN 2011

Fortis Healthcare (India) will acquire Singapore-based

Fortis

Healthcare International for US$ 665 million.

State-run company Gas Authority of India Ltd (GAIL), India has

plans to spend around US$ 1 billion over 2012 to explore fast-

emerging shale gas sector, primarily in the US and Canada.

Steel major Steel Authority of India Ltd (SAIL) along with NTPC,

Coal India, Rashtriya Ispat Nigam Ltd (RINL) is exploring

opportunities to acquire coal mines in Australia and other coal-rich

nations by forming a joint venture (JV) company.

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PROJECT AND CONSULTANCY EXPORTS

India which reportedly has the third largest engineering manpower is now in aposition to enter this highly sophisticated and expanding segment of world trade.

Indian has over 200 consultancy and design organizations. Foreign exchange

earned from consultancy exports stood at Rs 1,369 crores during 1993-94 as against

onlyRs 1crore in 1974-75.

The major areas in which Indian consultancy has achieved considerable success

are technical management of cement plants, agricultural research services, sugar

projects, petrochemicals industries, design programming, computer software

cooling tower systems, etc.

The major countries where exports of consultancy services were made are France,

Japan, Norway, the UK, the USARussia, Holland, Switzerland, Sweden, Kuwait,

Muscat, UAE, Saudi Arabia, etc.

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INCENTIVES AVAILABLE Consultancy services: exporters whose annual foreign exchange earnings by

way of export of services are not less than Rs 5 lakhs, are eligible for foreign

exchange facilities for business development, purchase of tender documents,

payment of commission, bid bonds etc.

In order to cover risks, ECGC has designed policies to cover specific

transactions services exports.

Marketing Development Assistance is provided to consultancy organizations

which are registered with FIEO for undertaking market studies opening of

foreign offices, publicity campaigns and feasibility studies.

100 percent income tax exemption on export profits from computer software.