EXPORT IMPORT POLICY OF INDIA

INTRODUCTION
EXPORT Derived from the conceptual meaning as to ship the goods and services out of the port of a country. Countries all over the world are interdependent, which necessitated foreign trade. IMPORT Derived from the conceptual meaning as to bring in the goods and services into the port of a country. Import of goods normally requires involvement of thecustomsauthorities in both the country of import and the country ofexportand are often subject toimport quotas,tariffsandtrade agreements.

What is Export Import Policy?

Export Import (Exim) Policy or Foreign Trade Policy (FTP) is a set of guidelines and instructions in matters related to the import and export of goods in India. Established by the Directorate General of Foreign Trade (DGFT) Regulated by The Foreign Trade Development and Regulation Act 1992 Exim policy contains various policy decisions with respect to import and exports of the country. Prepared and announced by the central government. Aim
developing export potential improving export performance encouraging foreign trade creating favorable balance of payment position.

Objectives of EXIM Policy

Accelerating the countrys transition to a globally oriented vibrant economy with a view to derive maximum benefits from expanding global market opportunities Stimulating sustained economic growth Enhancing the technological strength and efficiency Attainment of internationally accepted standards of quality Providing good quality products and services at reasonable prices

Pre - Liberalization INDIA ( 1947 1990 )

Indian economic policy post independence influenced by Colonial experience Strong emphasis on Import substitution in labour & financial markets Elaborate licenses , regulations & the accompanying red tape Five - Year Plans of India resembled central planning in the Soviet Union . Many industries , were effectively nationalized in the mid - 1950s Low annual growth rate - stagnated around 3 . 5 % from 1950s to1980s Import of Industrial raw material was canalized through various PSUs Between 1985 - 90 huge trade balance compelled Govt . to approach World Bank , IMF for loan Govt . applied brakes on the licensing policy of imports

Post Liberalization ( 1991 onwards )

Govt . introduced number of measures in trade policy

Allowed exim scripts Abolished cash compensatory support ( CCS )

sharp reductions in the number of goods subject to licensing and other non - tariff barriers reductions in export restrictions , and tariff cuts across all industries higher levels of competition within the Indian economy

General Provisions regarding Export Import

1 . Exports and Imports free unless regulated 2 . Compliance with law 3 . Interpretation of Policy 4 . Procedure 5 . Exemption from Policy 6 . Principles of Restriction 13 . Restricted Goods 14 . Terms and Conditions of a license / Certificate 15 . Authorization not a Right 16 . Penalty 11.

11 . Importer Exporter code number 12 . Trading with neighboring countries 13 . Transit facility 14 . Trade with Russia under Debt Repayment Agreement 15 . Actual User condition 16 . Second hand goods 17 . Scrap / Waste in SEZ 18 . Import of samples 19 . Sale on High Seas 20 . Clearance of goods from custom

Export Promotion Measures

Policy measures Institutional Set up Import facilitation for Export Production Cash subsidies Fiscal incentives Foreign Exchange facilities Export incentives Duty Exemption Duty Drawback Scheme Duty Free Replenishment Certificate ( DFRC ) Duty Entitlement Pass Book Deemed Exports Export production units

Import facilitation for Export Production

Export Promotion Capital Goods Scheme Special Import Licenses Duty free licenses under Duty free Exemption Scheme Duty free licenses are issued as : i Advance License . i. Advance Intermediate License i ii Special Imprest License i. i . License for jobbing , repairing , v etc . for re - export v . License under export production program vi Advance Release Order . vi. Back to Back Inland Letter of i Credit vi. i i

INDIA S FOREIGN TRADE POLICY

2009 - 14

Objectives of FTP 2009 - 14

Arrest and reverse declining trend of exports Double India's exports of goods and services by 2014 Double India's share in global merchandise trade by 2020 . Simplification of the application procedure for availing various benefits To set in motion the strategies and policy measures which catalyze the growth of exports To encourage exports through a " mix of measures including fiscal incentives , institutional changes , procedural rationalization and efforts for enhanced market access across the world and diversification of export markets

Target
Export Target : $ 200 Billion for 2010 - 11 Export Growth Target : 15 % for next 2 years and 25 % thereafter

EPCG

Scheme

Obligation under EPCG scheme relaxed . To aid technological up gradation of export sector , EPCG Scheme at Zero Duty has been introduced . Export obligation on import of spares , moulds , etc . under EPCG Scheme has been reduced by 50 %

Re - fixation Obligation

of

Annual

Average

Export

Taking into account the decline in exports , the facility of Re - fixation of Annual Average Export Obligation for a particular financial year in which there is decline in exports from the country , has been extended for the 5 year Policy period 2009 - 14 .

Announcements for FPS , FMS , MLFPS :

1.27 new markets added 2.Incentives under FMS raised from 2.5 % to 3 % 3.Incentive available under FPS raised from 1.25% to 2% 4.Extra products included in the scope of benefits under FPS 5.MLFPS expanded by inclusion of products like Pharmaceuticals textile fabrics auto components rubber products motor cars glass products of green products and some 6.FPS benefit extended for exportbicycle products from the North East. 7.A common simplified application form has been introduced to apply for the benefits under FPS, FMS, MLFPS and VKGUY.

Announcements for MDA & MAI :

Higher allocation for Market Development Assistance (MDA) and Market Access Initiative (MAI) has been announced.

Towns of Export Excellence ( TEE )

The following cities have been recognized as towns of export excellence ( TEE ) Handicrafts : Jaipur, Srinagar and Anantnag Leather Products : Kanpur, Dewas and Ambur Horticultural Products : Malihabad

Extension Exemption

of to

Income Tax EOU and STPI

Income Tax exemption to 100 % EOUs and to STPI units

under Section 10B and 10A of Income Tax Act , has been already extended for the financial year 2010 - 11 in the Budget 2009 - 10 .

SPECIAL FOCUS INITIATIVES

SECTORS
Market Diversification

INITIATIVES

27 new countries have been included in Focus Market Scheme The incentives have increased from 2.5 to 3% EPCG at Zero duty has been introduced and has been simplified Vishesh Krishi and Gram Udyog Yojana (VKGUY) Capital goods imported under EPCG will be permitted to be installed anywhere in AEZ Duty free import of old pieces of hand knotted carpets on consignment basis for re-export after repair is permitted. Import of gold of 18k and above is allowed under replenishment scheme. Duty free import entitlement of commercial samples shall be Rs. 300,000

Technological Upgradation Agriculture and Village Industry

Handlooms and Handicrafts

Gems and Jewellery

Highlights of the Annual Supplement to EXIM Policy

1. Inter State Trade Council 2. Removal of Export Cess 3. EPCG 4. Service Export 5. Agriculture Export 6. Package for Marine Sector 7. Advance Licensing Scheme 8. DFRC 9. EDI Initiatives

India s Foreign Trade in June 2011

India exports were worth 29 , 213 Millions USD in June of 2011. Exports amount to 22% of Indias GDP. Gems and jewellery constitute the single largest export item, 16 percent of exports. India is also leading exporter of textile goods, engineering goods, chemicals, leather manufactures and services. Indias main export partners are European Union, United States, United Arab Emirates and China

INDIA S EXPORTS
(January 2009 July 2011)

WORLD MERCHANDIZE

EXPORTS

(As a percentage of total world exports)

INDIA S IMPORTS
(January 2009 July 2011)

WORLD MERCHANDIZE

IMPORTS

(As a percentage of total world imports)

Balance of trade

Balance of trade = Exports - Imports A positive balance of trade is known as a trade surplus A negative balance of trade is known as a trade deficit or, informally, a trade gap. India reported a trade deficit equivalent to 7659 Millions USD in June of 2011. India is poor in oil resources and is currently heavily dependent on coal and foreign oil imports for its energy needs. Other imported products are: machinery, gems, fertilizers and chemicals.

(January 2009 July 2011)

INDIA S

BOT

Implications of The Foreign Trade

Implications on Agriculture: SpecialAgriculturalProduceSchemehasbeenintroducedforpromoting theexportoffruits,vegetables,flowers,andtheirvalueaddedproducts. Implications on Handlooms and Handicraft: EstablishmentofHandicraftSEZandHandicraftExportPromotion CouncilwouldpromotedevelopmentofHandloomandHandicraft Industry.

Implications on Gem and Jewellery Sector : 1.Thisisspecialthrustareainthispolicy. 2.Dutyfreeimportsofotherinputswouldgiveafurtherboosttothis sector.

Implications on Leather and Footwear Industry : 1.Dutyfreeimportasaspecifiedpercentageofexports. 2.Exemptiononcustomsdutyonequipmentforeffluenttreatment plantswouldhelppromotingexportformthissector.

Implications on Service Industry : 1.Anexclusiveservicepromotioncouncilhasbeensetupinorderto maptheopportunitiesforkeyservicesinkeymarket. 2.Developstrategicmarketaccessprogramslikebrandbuildingincoordinationwithsectorialplayersandrecognizenodalbodiesofthe serviceindustry.

News on India s Foreign Trade

In the 1st week of August, 2011 S&P downgraded the long-term sovereign credit rating on the U.S. to 'AA+' from 'AAA' because of its out-of-control spending and poor fiscal and monetary policies. The downgrade deprived U.S. of AAA rating, a coveted status the Country had held for 70 years. This has created a fear to recession. Combined with the slowing down China and the tsunami ravaged Japan, the US turbulence will further worsen the level of global trade activities as well as India's international trade, said Federation of Indian Export Organization (FIEO). Besides IT, some labour-oriented sectors like leather, gems and jewellery would be hit hard.

The weakening of the US dollar resulting from the downgrade would make Indias exports less competitive even while imports to India would become cheaper and put further pressure on domestic manufacturers. Indias exports to the US will also be hit because of US likely to raise taxes for reducing its deficits as part of the recent deal to increase its overall debt ceiling. The higher taxes will in turn further shrink the disposable incomes of American people and reduce their demand. The world largest economy is entering into depression while the Eurozone is in debt crisis. The worst fear is that exports in third and fourth quarter (of this fiscal) will be affected. The Centre should immediately help the exports sector with interest subsidy, reduction in

THANK YOU
PRESENTED BY: PARULJAIN(8154) SAKSHIAGARWAL(8158) PRIYANKAKESERWANI(8160) NAMRATAMENON(8173)