EXIM Policy of India

Delivered By :
Faraz Shahid
 Exim Policy & FTP

Is a set of guidelines and instructions

established by the DGFT in matters
related to the import and export of goods
in India
 Foreign Trade Policy of India
• guided by the Export Import in known as
in short EXIM Policy of the Indian
Government and is regulated by the
Foreign Trade Development and
Regulation Act, 1992
DGFT : Directorate General of Foreign Trade

• Main governing body

• To provide the development and
regulation of foreign trade by facilitating
imports into, and augmenting exports
from India
• Foreign Trade Act has replaced the earlier
law known as the imports and Exports
(Control) Act 1947
 EXIM Policy

• Indian EXIM Policy contains various policy

related decisions
– Export promotion measures
– Policies and procedures related thereto
 Trade Policy is prepared and announced by the
Central Government (Ministry of Commerce).
 Aims at developing export potential
 Improving export performance
 Encouraging foreign trade
 Creating favorable balance of payments position
 History of Exim Policy of India
• In the year 1962, the Government of India appointed
a special Exim Policy Committee to review the
government previous export import policies
• The committee was later on approved by the
Government of India. Mr. V. P. Singh, the then
Commerce Minister and announced the Exim Policy
on the 12th of April, 1985
• Initially the EXIM Policy was introduced for the
period of three years with main objective to boost
the export business in India
 Exim Policy Documents
• Interim New Exim Policy 2009 - 2010
• Exim Policy: 2004- 2009
• Handbook of Procedures Volume I
• Handbook of Procedures Volume II
• ITC(HS) Classification of Export- Import
Items

The major information in matters related to export and import is given in the
document named Exim Policy 2002-2007
 Objectives Of The Exim Policy
• To accelerate the economy from low level of economic activities to high level of
economic activities by making it a globally oriented vibrant economy
• To derive maximum benefits from expanding global market opportunities
• To stimulate sustained economic growth by providing access to
– Essential raw materials
– Intermediates
– Components
– Consumables
– Capital goods for augmenting production
• To enhance the techno local strength and efficiency of Indian agriculture,
industry and services, thereby, improving their competitiveness.
• To generate new employment.
• Opportunities and encourage the attainment of internationally accepted
standards of quality.
• To provide quality consumer products at reasonable prices.
 Governing Body of Exim Policy
• Exim Policy for a period of five years (1997-2002) are specified under
Section 5 of the Foreign Trade (Development and Regulation Act), 1992

• The Exim Policy is updated every year on the 31st of March and the
modifications, improvements and new schemes became effective from
1st April of every year.

• All types of changes or modifications related to the EXIM Policy is

normally announced by the Union Minister of Commerce and Industry
who co-ordinates with
– Ministry of Finance
– Directorate General of Foreign Trade
– Network of DGFT Regional Offices
 Exim Policy 1992 -1997

• In order to liberalize imports and boost exports,

the Government of India for the first time
introduced the Indian Exim Policy on April I, 1992
• Made for the duration of 5 years
• Central Government reserves the right in public
interest to make any amendments to the trade
Policy in exercise of the powers conferred by
Section-5 of the Act.
• Export Import Policy is believed to be an important
step towards the economic reforms of India
 Exim Policy 1997 -2002

• Period of the Exim Policy

• Liberalization
• Imports Liberalization
• Export Promotion Capital Goods (EPCG)
Scheme
• Advance Licence Scheme
• Duty Entitlement Pass Book (DEPB) Scheme
 Exim Policy 2002 – 2007
• To encourage economic growth of India by providing
– Raw materials
– Intermediates
– Components
– Consumables
– Capital goods
• To improve the technological strength and efficiency of
– Indian agriculture Industry
– Competitive strength while generating employment opportunities
– Encourage the attainment of internationally accepted standards of quality
• To provide consumers with good quality products and services at
internationally competitive prices while at the same time creating a
level playing field for the domestic producers.
 Exim Policy 2004-2009
• Preamble
• Legal Framework
• Special Focus Initiatives
• Board Of Trade
• General Provisions Regarding Imports And Exports
• Promotional Measures
• Duty Exemption / Remission Schemes
• Export Promotion Capital Goods Scheme
• Export Oriented Units (EOUs),Electronics Hardware Technology Parks
(EHTPS), Software Technology Parks (STPs) and Bio-Technology Parks
(BTPs)
• Special Economic Zones
• Free Trade & Warehousing Zones
• Deemed Exports
 Foreign Trade and India
• Ancient maritime trading nation
• Bay of Bengal was once known as CHOLA
LAKE
• Exports touch $165 billion in 2008-09
• India is among the top ten in services
exports
• The export basket
 Laws to note
• The foreign trade ( development and
regulation ) Act
• The Foreign Trade Policy 2004-09
• The FEMA 2000
• RBI Regulations
• The Customs Act
• The Central excise Act
 Steps in Exporting
• A business organization
• Manufacturer exporter
• Merchant exporter
• Agent/ intermediary
• Service provider
• Product selection
• Procurement of order
 Essentials of export contract
• Product, standards & specification
• Quantity
• Inspection
• Value
• Terms of delivery
• Taxes, duties and charges
• Period of shipment
 Export contract contd….
• Packing, labeling,marking
• Terms of payment- Amount.mode &
currency
• Discounts and commissions
• Licences and Permits
• Insurance
• Documentary requirements
• Guarantee
 Export contract contd……
• Force majeure
• Remedies
• Arbitration
• The case of Dalmia & Arun Jain of Polaris
 Incoterms
• EXW– Ex works
• FCA--- Free Carrier
• FAS---- Free alongside ship
• FOB---- Free on board
• C&F----- Cost and freight
• CIF----- cost ,insurance and freight
• CPT– Carriage paid to
• CIP---- Carriage and insurance paid to
 Incoterms contd------
• DAF– delivered at frontier
• DES--- delivered EX ship
• DDU--- delivered duty unpaid
• DDP---- delivered duty paid
• DEQ– delivered ex quay
 Risks in International trade
• Credit risk
• Currency risk
• Carriage risk
• Country risk
• Voyage risk
 Export registration
• IEC with DGFT
• PAN
• Bank account
• Appointment of agents
• Export licenses
• Customs registration
• Registration with export promotion
councils
 Export inspection
• IPQC– In process quality control
• ISI, AGMARK
• Fumigation
• ISO- 9000 & ISO – 14000
• EIA
• SA- 8000
• Global compact
 Currency management
• Understanding currency fluctuations
• Invoicing currency
• Forward contract
• Hedging
• Repatriation
• EEFC
 Reading FTP
• The policy
• The handbook of procedures
• The ITC- HSN classification
• Export licenses
• Import licenses
• OGL
• State Trading
 Customs procedure- export
• Exporter
• Person in charge of conveyance
• Bill of lading
• Export general manifest
• Shipping bill, packing list,ARE etc
• Stuffing/ examination/ sealing
• Self- sealing/ self- certification
 Customs procedure contd----
• Importance of ICD/CFS/
• Customs bonded warehouse
• Green channel for exporters
• Assessment
• New concept of Transaction value
 Customs import procedure
• Importer
• Person in charge of conveyance
• Bill of entry
• Import general manifest
• Assessment
• EDI
• RMS
 Central excise export procedure
• Exports are free of duty
• Bond clearances
• Rebate clearances
• ARE 1
• ARE 2
• UT1
• Proof of export
• Sealing of container
 Export promotion schemes
• Section 65 of customs Act
• Advance authorization / DFIAS
• Export promotion capital goods
• DEPB
• Drawback
• EOU
• SEZ
 EOU
• Minimum investment of INR 10 million
• 300 warehousing districts as location
• Nearly 3000 units in existence
• New or conversion from DTA
• Manufacturing & services covered
• Trading units are not permitted
 EOU contd-------
• Widest definition of manufacture
• Single B – 17 Bond
• Duty-free import of raw materials and
inputs and similar sourcing of inputs and
capital items from DTA
• NFE= A – B = 0 +
• EO over 5 years
 EOU contd-----
• Can subcontract part of production to
DTA
• Can sell upto 50% of production in DTA
• Can sell to other EOU/ BTP/
EHTP/STP/SEZ and count against EO
• Exempt from state trading and SSI
reservation restrictions
• 100% EEFC retention
 EOU contd-----
• Clubbing of exports with exports of parent
company for export house status
• CST exemption
• PC and CT3 procedure
• Self sealing
• Green channel clearance on import
 Drawback
• Recouping of duties of customs and
central excise and service taxes
• All industry rates
• Brand rate
• Special brand rate
• Post export documentation
 EPCG
• Import of capital goods at concessional
customs duty
• EO is 8 times the duty saved in 8 years
• 12 years for SSI holders and licenses for
INR1000million
• Covers manufacturer exporters or
merchant exporters with supporting
manufacturers
 EPCG contd-----
• Direct as well as third party exports
allowed
• Shipments under Advance authorization
DFIAS , DEPB & draw back will count for
fulfillment of EO
• Physical exports required but certain
deemed exports allowed
• Clubbing of licenses allowed
 Advance authorization
• Duty free import of inputs
• Fuel, oil and energy are also allowed to be
imported
• SION norms
• Ad hoc SION permitted
• Positive value addition
• Issued for annual requirement also
 Advance authorization contd--
• Advance release order/ Invalidation
• Supplies to SEZ counted
• Actual user condition
• Disposal of imported items after meeting
EO
• License transferable after meeting EO and
with the permission of DGFT
 DEPB
• Duty free post export remission scheme
• SION norms
• Ad hoc SION norms permitted
• Schedule of rates
• Can be used to pay for import duties
• Transferable scrip
• Scheme valid upto March 2009
 SEZ
• Exclusive geography
• Duty free enclave
• Sales to DTA permitted
• Special concessions for promoters
• Positive EO is required
• Customs duty, excise duty, service tax and
VAT & CST are exempt on supplies to SEZ
units
 High Tech products promotion scheme

• Appendix 37E goods

• Duty free scrip equal to 10% incremental
export growth
• Ceiling of INR 150 million
• Some exports not counted
• Scrip freely transferable
 Focus products scheme
• Goods notified in appendix 37D
• Some exports not counted
• Duty credit scrip equal to 1.25% of FOB
value of exports for each year
• Scrip transferable
 Focus markets scheme
• Notified as per Appendix 37C
• Duty credit scrip of 2.5% on the FOB value
of exports achieved
• Certain exports not allowed
• Scrip transferable
 Deemed Exports
• The concept of deemed exports
• Covers supply of goods against:
• Advance authorization/ DFIAS
• EOU/ STP/EHTP/BTP
• EPCG
• Projects under International competitive
bidding procedure
 Deemed exports contd-----
• Projects approved by ministry of finance
• Supplies of capital stock to fertilizer plants
• Supplies of goods to Refineries and power
projects
• Supplies of goods to UN- funded projects
• Supplies of goods to Nuclear power
projects thro competitive bidding
 Benefits to deemed exports
• Advance authorization / DFIAS
• Deemed duty drawback
• Exemption from terminal excise duty if
supplies are against International
competitive bidding
• In other cases refund of terminal excise
duty paid will be given
 Served from India scheme
• To promote served from India image
• Appendix 10
• Minimum previous year exports of INR1
million
• 10% duty credit scrip
• Scrip transferable within corporate group
and not otherwise
 Status Holders under the FTP
• Export House Rs 20 crores
• Star export House Rs 100 crores
• Trading House Rs 500 crores
• Star Trading House Rs 2500 crores
• Premier Trading House Rs 10000 crores
• Benefits allowed to status holders
 Excise export concessions
• Export without payment of duty
• Export under claim for duty
• Procurement of excisable goods for export
production without payment of duty
• Drawback
• Concessional notifications
 Service tax concessions

• Drawback
• Its limitations
• ASTR 1
• ASTR 2
• Clearances to SEZ exempt
• Refund of service tax paid on export
related input services
 WTO/ GATT
• International Treaty
• Governing Principles
• MFN
• Non discrimination
• National treatment
• Reduction of tariffs
• Elimination of Non tariff barriers
 Free Trade Agreements
• NAFTA
• EU
• MECOSUR
• ASEAN
• SAFTA
• Indian agreements with Sri Lanka,
Thailand and Singapore
• Implications of FTAs
Importance of Ports in International Trade

• 70% of international trade is over the seas

• For India, it is 90%
• Trade through Air is comparatively very
expensive and cannot become a common
preference, and is unsuited for heavy,
large cargo
• Many coastal states possess a number of
ports
 Ports in India
• India has 12 major ports and more than
180 lesser ones
• India has a coastline of nearly 6000 KMs
• All ports of India together handled 519
million tons of cargo during the fiscal year
ended March 2008
• Growth rate of 12%
 Problems of Indian Ports
• Limited land area
• Industries located in hinterland
• Low channel draft
• Too many players
• Inadequate deployment of skill and
technology
• Lack of coordinated approach
 Requirements of modern World class port

• Skill – Intensive
• Technology driven, minimal paper work
• Port is the best when its an industrial
complex by itself
• Quay cranes
• Crane productivity
• Fully automated terminals with good
quay length
 Port stake holders in India
• Customs
• Port Trusts
• Port Health Organization
• Plant Quarantine
• Immigration
• Terminal operator
• Vessel operating agent
 continued
• Steamer agent / Mainline operator
• Container operating agent ( NVOCC,
VOCC )
• Stevedore
• CHA / Exporters / Importers
• Transport operators
• CFS / ICD
• Security agencies / External players
Thank You