“Role of DGFT in foreign trade

policy”
Course MBA-AB
Group 2 Subject: Foreign Trade policy in Agri Export
 Aashi Lunia Management
 Amrita Ingole
 Ashish Barla
 Ashutosh Lahamge
 Gurwinder Singh
 DGFT

• Directorate General of Foreign Trade is an attached office

of the Department of Commerce, Ministry of Commerce
and Industry, responsible for execution of the import and
export Policies of India
 DGFT runs various schemes for trade promotion and
facilitation. Using this facility you may file, prepare and
track online application in these schemes.
 It was earlier known as Chief Controller of Imports &
Exports (CCI&E) till 1991
 DGFT plays a very important role in the development of
trading relations with various other nations and thus help
in improving not only the economic growth but also
provides a certain impetus needed in the trade industry
ORGANISATIONA SET UP OF DGFT

 Headquarter(NEW DELHI)

 Zonal office(4)

 Regional office(36 ALL OVER THE COUNTRY)

 Trade scenario before 1991

 Scenario pre 1991

 Requirement for licenses
 Bureaucratic controls
 Complex legislations & manufacturer protective policies
 High import duties
 Scenario after 1991

 End of licensed raj

 A marked shift from protecting ‘producers’ to benefiting
‘consumers’.
 Process of global integration of Indian economy
commenced
 Drastic cut in import duties Emergence of worldwide
financial markets and better access to external financing
 Realization of a common global market, based on the
freedom of exchange of goods and capital
 Increase in information flow between geographically
remote locations
 Growth of cash cultural contacts
 Anup K. Pujari
LL.B. (Delhi), Ph.D. (Boston), IAS
Director General of Foreign Trade
Department of Commerce
Government of India
 DGFT
Before
After 1991
1991

Trade Trade
Regulator facilitator
Overview of trade formulation policy

1950-1960
Policies influenced by
self reliance n self
1970-1980
sufficiency
Policies influenced by
export led growth,
improving efficiency
competitiveness of 1990s
Indian industries Policies influenced by
globalization of the
Indian economy,
improving
competitiveness of its
industry and adverse
balance of payments
situation
 As far as the foreign trade sector is concerned, the year
1991is a “watershed” as massive trade liberalization
measures adopted since this year mark a major
departure from the relatively protectionist trade policies
pursued in earlier years
 Broader role of DGFT

 Resource Centre for information

 Monitoring agency for import and export

 Support organization for WTO negotiations

 FUNCTIONS OF DGFT

 To implement the Exim Policy /foreign trade policy/commercial policy

 To Grant Exporter Importer Code Number to Indian Exporter and

Importers

 DGFT permits or regulate Transit of Goods from India or to countries

adjacent to India in accordance with the bilateral treaties between India
and other countries.

 To grant the permission of free export in Export Policy Schedule 2

 DGFT also play an important role in controlling DEPB Rates

 Setting standard input-output norms is also controlled by the DGFT.

 Functions of DGFT
Conti…

 Any changes or formulation or addition of new codes in ITC-HS

Codes are also carried out by DGFT
 DGFT provided Digital Signature facility to Importers and
Exporters online ecommerce application filling since 2004
 Zonal/Regional offices of DGFT are also functioning as Export
Facilitation Centers and as nodal agencies to attend to the
problems of trade and industry and to coordinate with different
departments
 Licenses to restricted products in special cases and resolving the
committee and cases relevant with Foreign Trade.
 DGFT issues and formulate Foreign Trade Laws, Rules and
Regulations, Foreign Trade Policy, Foreign Trade Procedures
 INDIA’S
FOREIGN TRADE POLICY 2009-14

The Union Commerce Ministry, Government of India announces

the integrated Foreign Trade Policy FTP 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.
 Objectives of Foreign Trade Policy
2009-2012

Short term Medium term Long term

objectives
•To arrest & reverse the
declining sector of exports
•To provide additional
support to those sectors
which have been badly hit
by recession in the
developed world
objectives objective
•To achieve annual growth of
15% • To double India’s
•To achieve annual export
growth of around 25% by
share in global
2014 trade by 2020
•To double India's exports of
goods and services by 2014
Objectives og foreign trade policy
2009-2012

 Short term objectives

 To arrest & reverse the declining sector of exports
 To provide additional support to those sectors which hvave
been badly hit by recession in the develpoed world
 Medium term objectives
 To achieve annual growth of 15%
 To achieve annual export growth of around 25% by 2014
 To double indias exports of goods and services by 2014
 Long term objective
 To double indi’s share in global trade by 2020
 INDIA’S FOREIGN TRADE POLICY 2009-14

 Aim in 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.

.
 Exim policy

Export Import Trade Policy or EXIM Policy is the set of

guidelines formulated by the board for free flow of foreign
trade

It improve the intensity of Import Export trading

DGFT issues several policy updates that are important for the
traders so that they can plan profitable and successful trading
strategies
PRIME OBJECTIVES OF EXIM POLICY

 Special Focus on Initiatives

 General Provisions Regarding Import and Export
 Promotional Measures
 Duty Exemption / Remission Schemes
 Export Promotion Capital Goods Scheme
 Export Oriented Units (EOUs)
 Special Economic Zones
 Free Trade and Warehousing Zones
 Deemed Exports
 IMPORTERS EDITORS CODE
NUMBER(IEC)

 It is permit issued by DGFT to any bonafide person/

company for starting a venture of import export
trade.
 It is like an identification ID issued to every importer
exporter of the country.
 Without ICE code, nobody can pursue a foreign trade
transaction in India.
 DEFB RATES

 Export Incentives granted by Indian Government, for

saving Customs Duty when Importing several Goods.
 Neutralizes the customs duty applicable on import
content of the export product.
 Incentive is usually granted to the exporter under several
circumstances mentioned under DEPB General Instructions
 Specified DEPB rates and General Instructions are also
set, and updated by DGFT India.
Issue of notification & circulars

 DGFT India issues Notifications, Public Notices,

Circular and Notices, which are of prime importance
for import export traders
 Notifications are actually the announcements made
by the board for introducing changes made in the
existing policies
 Recent notifications

 Notifications(05/06/2012)
 The Central Government hereby notifies the Foreign
Trade Policy, 2009-2014 as updated upto 5th June
2012 and incorporating the Annual Supplement. This
shall come into force w.e.f. 5th June, 2012.
 Notification (08/06/2012)
 Export of Skimmed Milk Powder (HS Code 04021010)
which was prohibited as per Notification No. 23 (RE-
2010)/2009-2014 dated 18.02.2011, is now made free.
 Recent public notices

 Public notice(05/06/2012)
 With the introduction of electronic BRC system, banks
will issue and transmit BRC’s electronically to DGFT’s
server replacing the manual mode of obtaining and
submitting BRC. The revised process flow with
technical guidelines are available on the DGFT’s
website dgft.gov.in under the ‘e-BRC’ icon.
 Digital signature

 In December 2002, DGFT became India's first digital signature

enabled agency
 All Exim notifications, public notices, and in course of time,
license issued by DGFT can be electronically transmitted with
digital signature
 The DGFT, today signed an MOU (Memorandum
of Understanding) with M/s. SafeScrypt Limited, who will
provide the DGFT with necessary technical support and
consultancy services in this regard.
 The exporting community who apply for import/export licenses,
Importer Exporter Code (IEC) would now be able to interact
with DGFT on a secured electronic platform which will facilitate
paperless verification, processing and communication.
 ITC-HS

 Indian trade clarifications based on harmonic system

 It describes rules & regulations related to import and
export policies
 Any changes or formulation or addition of new codes,
commodity description, weeding out of defunct
codes, changes in product description in ITC-HS Code
are also carried out by DGFT
The EXIM Policy 2010-2011 is one of
the most ambitious policies of the
government to liberalize the Indian
economy and the
 FLAWS OF FTP

 i) No concrete solution or reduce delays and transaction costs.

 ii) Software Technology Parks of India not given income tax exemption.

 iii) Poor export in growth, in rupee terms, and in volume terms, ignored.

 iv) The rising crude oil prices and inflationary pressures in the economy.

 v) Due to global economic slowdown and recession in the USA

economy, India’s largest trading partner, uncertainty of the rupee-dollar

exchange rate continues which in turn affects the economy.