mport Policy The economic needs of the country, effective use of foreign exchange and industrial as well as consumer

requirem the basic factors which influence India's import policy. On the import side the policy has three objectives: to mak necessary imported goods more easily available, including essential capital goods for modernizing and upgrading technology; to simplify and streamline procedures for import licensing; to promote efficient import substitution a reliance.

There are only 4 prohibited goods: tallow fat, animal rennet, wild animals and unprocessed ivory. There is a restr but most of the restrictions are on grounds of security, health and environmental protection or because the goods reserved for production by small and tiny enterprises, which are home-based or village-based and which require and employ a large number of people. But the policy of restricting import of consumer goods is changing.

The Indian government's clearly laid down policy is to achieve, through a series of progressive steps, the average levels prevalent in the ASEAN region. The basic customs tariff rate now ranges from 0 to 40% plus additional du the average rate is about 30%.

Imports are allowed free of duty for export production under a duty exemption scheme. Input-output norms have specified for more than 4200 items. These norms specify the amount of duty-free import of inputs allowed for sp products to be exported.

There are no quantitative restrictions on imports of capital goods and intermediates. Import of second-hand capit is permitted provided they have a minimum residual life of 5 years. There is an Export Promotion Capital Goods Scheme under which exporters are allowed to import capital goods (including computer systems) at concessionar customs duty, subject to fulfillment of specified export obligations. Service industries enjoy the facility of zero im duty under the EPCG Scheme. Likewise, hospitals, air cargo, hotels and other tourism-related industries. Softwar units can use data communication network to export their products.

Export Policy Exports are the major focus of India's trade policy and a thrust area is exports involving higher value additions. M can be freely exported from India. A few items are subject to export control in order to avoid shortages in the dom market, to conserve national resources and to protect the environment.

Export profits are exempt from income tax. Higher royalty payments of 8% (net of taxes) are permitted on expor compared to 5% on domestic sales. Export commissions up to 10% are also permissible.

Inputs required to be imported for export production are exempted from the basic customs duty. Export Oriented (EOUs) and Export Processing Zones (EPZs) enjoy special incentives such as duty free import of capital goods a materials for the purpose of export production. A Brand Equity Fund has been set up to popularize high quality India brands in the world market. The corpus of of Rs 5 billion (US $156 million) will receive equal contributions from the government and industry.