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• Growth of world trade and GDP was high in 1997 than ever in 90s
• 126, out of 153 WTO member countries, have registered increase in per
capita income
• The year 2001 witnessed an unexpected decline in world trade which fell
down by 1.5% ever since 1987. but this got reversed by 2001
• A good yardstick for the measurement of World economy is GDP which can
be defined as “ Sum total of the value of all goods and services produced in
the country”.
RESULTS OF THE DVPT IN FOREIGN TRADE
• Goods or services provided are expected to be of
international quality and price
• Allowing private ventures in the field of banking, civil aviation and telecom
1. Import structure
- capital goods
- raw materials and intermediate goods
- consumer goods and food grains
2. Major items of imports
- food grains
- machinery & transport equipments
- mineral oil
- metals
- medicines and chemicals
- fertilizers
3. Export structure
- food, beverages and tobacco
- raw materials
- manufactured goods
4. Major export items
- jute
- cotton
- leather
- iron ores
- engineering goods
- handlooms and handicrafts
- chemical products
- fruits, vegetables, sugar, unmanufactured tobacco, mica, etc.
EXIM Policy 1992-1997
• Main trust of the policy was to remove unnecessary
controls and restrictions on imports and exports
Policy Aims:
• To accelerate country’s transition to an internationally
oriented economy with a view of securing maximum
benefits from expanding global market opportunities
• Govt has made the procedure simple, transparent and easy to administer
• Main thrust was to remove unnecessary controls and restrictions on imports and
exports.
• 80% of old restrictions have been removed indicating the extent of liberalization
• Import duty on capital goods has been reduced with an increased export obligation
• Certain categories of exports and exporters are eligible to receive special import
licences
• Two windows are opened for concessional duty imports under EPCG scheme.
(i) The 1st window provides concessional customs duty of 25% with export
obligation 3 times the value of CIF for a period of 4 yrs
(ii) The 2nd provides for 15 % duty with export obligation 4 times the CIF value
to be met in 5 yrs
• Partial convertibility of the rupee provides that all imports, barring those of canalised
items are to be funded by foreign exchange obtained at a market determined rate.
IMPLICATIONS OF EXIM POLICY 1992-97
• Decline in protectionist measures
- import tariff reduction and liberalised
measures
- Declining protectionist measures for
domestic industry
ii. Procedure
As per Handbook of procedures
v. IEC No
vi. Actual user condition
vii. Second hand goods
viii. Realisation of export proceeds
ix. RCMC
EOU/ EHTP/STP
• Eligibilty
Units undertaking to export their entire production of goods and services, expect
permissible sales in DTAs
• Sale in DTA
50% of FOB value of goods can be sold on fulfilling the export obligation
ii) Clubbing of FOB value of export of an EOU/ EHT/ STP with FOB
value of export of its parent company in the DTA or vice versa for
the purpose of according Registered exporters and status
iv) Software units allowed to use system for training purpose but not
to be installed outside the bonded premises
• Sub- Contracting
i) Through job work to other EOU/EHTP/STP
• Conversion
i) Existing DTA may apply for cinversion but no
concessions for plants and machineries already installed
ii) Can be merged
SEZ SCHEME
• Definition: Specifically delineated duty free enclave and shall be
deemed to be foreign territory for the trade operations and tariffs
• Status: Goods and services going from SEZ to DTA or vice versa
treated as exports or imports as the case may be
• NFE
Positive NFE= A-B>0
A is the FOB value of exports of SEZ
B is the CIF value of the imported inputs, capital goods and value of
payments made in foreign currency for commission, royalty, fees,
dividends, interest on external borrowings, etc