The Exim policy of India is a set of guidelines for imports and exports established by the Directorate General of Foreign Trade (DGFT). It aims to promote exports and regulate trade. The policy is announced every 5 years by the Ministry of Commerce and Industry. It seeks to liberalize trade and boost economic growth through foreign trade while regulating imports of non-essential goods.
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Exim Policy
The Exim policy of India is a set of guidelines for imports and exports established by the Directorate General of Foreign Trade (DGFT). It aims to promote exports and regulate trade. The policy is announced every 5 years by the Ministry of Commerce and Industry. It seeks to liberalize trade and boost economic growth through foreign trade while regulating imports of non-essential goods.
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What is EXIM policy?
Exim Policy or Foreign Trade Policy is a set of
guidelines and instructions established by the DGFT in matters related to the import and export of goods in India.
The Foreign Trade of India is guided by the Export Import Policy (EXIM Policy ) of the Indian Government and is regulated by the Foreign Trade Development and Regulation Act, 1992.
DGFT (Directorate General of Foreign Trade) is the main governing body in matters related to Exim Policy.
NDIM SECTION B 2 6/9/2014 Who announces EXIM policy?
The Government of India notifies the Exim Policy for a period of five years.
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 the Ministry of Finance, the Directorate General of Foreign Trade and its network of regional offices. NDIM SECTION B 3 6/9/2014 Objectives Of The Exim Policy Government control import of non-essential items through the EXIM Policy. At the same time, all-out efforts are made to promote exports. Thus, there are two aspects of Exim Policy; the import policy which is concerned with regulation and management of imports and the export policy which is concerned with exports not only promotion but also regulation. The main objective of the Government's EXIM Policy is to promote exports to the maximum extent. To stimulate sustained economic growth by providing access to essential raw materials, intermediates, components,' consumables and capital goods required for augmenting production. NDIM SECTION B 4 6/9/2014 Exim Policy The foreign trade of India is guided by the Export- Import policy of the Government of India. Regulated by The Foreign Trade Development and Regulation Act 1992. Exim policy contain various policy decisions with respect to import and exports from the country. Exim Policy is prepared and announced by the central government. Exim Policy of India aims to developing export potential, improving export performance, encouraging foreign trade and creating favorable balance of payment position. General Objectives of Exim Policy To establish the framework for globalization. To promote the productivity competitiveness of Indian Industry. To Encourage the attainment of high and internationally accepted standards of quality. To augment export by facilitating access to raw material,intermediate, components, consumables and capital goods from the international market. To promote internationally competitive import substitution and self-reliance.
Exim Policy of I ndia 2004-2009 Hon. Shri Kamal Nath minister for commerce and industry has announced on 31 st Aug 2004, Indias first Exim policy. The duration of the policy from 1 st Sept. 2004 to 31 st March 2009. It takes an integrated view of the overall development of Indias foreign trade. Aim of the policy is to double the global merchandise trade within the policy time period of 5 years Objectives of Exim Policy 2004-2009 To double our percentage of share of global merchandise trade within the five year. To act as an effective instrument of economic growth by giving a thrust to employment generation. Highlights of the New Foreign Trade Policy 2004-2009 Special Focus Initiatives: Semi-urban and Rural Area Agriculture : Vishesh Krishi Upaj Yojana and Agri Export Zones Handlooms and Handicrafts: Mark under Market Access Initiatives Scheme and Proposed to Start new SEZ. Gems and Jewellery: Import of gold of 18 carat and above has been permitted under the replenishment scheme Leather and Footwear : Duty free import entitlement of specified items shall be 5% of FOB value of exports during the preceding year
Export Promotion Schemes Assistance to States for Infrastructure Development of Exports [ASIDE] Market Access Initiative [MAI] Marketing Development Assistance [MDA] Towns of Export Excellence Target Plus Scheme. Served from India Scheme Service Export Promotion Council
New Status Holder Categorization
Category Total Performance (In Rs) One Star Export House 15 crore Two Star Export House 100 crore Three Star Export House 500 crore Four Star Export House 1500crore Five Star Export House 5000 Crore Board of Trade: The role is to advising government on relevant issues connected with Foreign Trade Policy. I mplications of The Foreign Trade 2004- 09 Implications on Indian Economy: This policy propose to simplify procedures and develop technology and infrastructure. Implications on Agriculture: Special Agricultural Produce Scheme has been introduced for promoting the export of fruits, vegetables, flowers, and their value added products. Implications on Handlooms and Handicraft: Establishment of Handicraft SEZ and Handicraft Export Promotion Council would promote development of Handloom and Handicraft Industry. Implications on Gem and Jewellery Sector : This is special thrust area in this policy. Duty free imports of other inputs would give a further boost to this sector Implications on Leather and Footwear Industry : Duty free import as a specified percentage of exports. Exemption on customs duty on equipment for effluent treatment plants would help promoting export form this sector.
Implications on Service Industry : An exclusive service promotion council has been set up in order to map the opportunities for key services in key market. Develop strategic market access programmes like brand building in co-ordination with sectoral players and recognize nodal bodies of the service industry.
Annual Supplement to Foreign Trade Policy 2004-09 Minister for Commerce and Industry, Government of India has announced Annual Supplement 2005, to the Foreign Trade Policy 2004-09 on the 8 th April 2005. Highlights of the Supplement Inter State Trade Council : To engage the State Government in providing an enabling environment for boosting international trade, by setting up an Inter State Trade Council. Removal of Export Cess : Proposed to abolish cess on export of all agricultural and plantation commodities levied under various Commodity Board Acts. Export Promotion Capital Goods Scheme (EPCG) : This scheme is extended to Agricultural sector, SSI sector, Retail Sectors in order to promote exports from them. Service Export : To upgrade infrastructure in the service related companies. Agri Export : Benefits under Vishesh Krishi Upaj Yojana have been extended to exports of poultry and dairy products in addition to export of flowers, fruits, vegetables and their value added products. Package for Marine Sector : Duty free import of specified specialized chemicals and flavoring oils as per a defined list shall be allowed to the extent of 1% of FOB value of preceding financial years export. Advance Licensing Scheme : The Scope of Advance License for annual requirement has been extended to all categories of exporters having past export performance. Duty Free Replenishment Certificate : Brass scrap, Additives, paper board, and dye stuff have been removed from the list of items prescribed for import under DFRC. Procedural Simplification : Proposed to simplify procedures and reduce the documentation requirements so as to reduce the transaction cost of the exporters and thereby increase their competitiveness. EDI Initiatives : DGFT shall introduce an automated electronic system for filing, retrieval and authentication of documents based on agreed protocols and message exchange with other authorities such including Customs and banks. Negative List of Exports 2002-07 The negative list consists of goods, the import or export of which is ether prohibited, restricted through licensing or otherwise to be canalized through a designate government agency. The negative list of exports, as per the EXIM Policy 2002-07 Prohibited Items : Which items completely banned from the exports. All forms of wild animals including their parts and products. Special Chemicals as notified by the DGFT. Exotic birds as notified by the DGFT. Beef. Sea Shells, as specified Human Skeleton. Peacock Tail Red sanders wood in any form. Restricted Items : which items allowed for exports under special license issued by the DGFT. Dress materials, ready-made garments, fabrics or textile items with imprints of excerpts or verses of the Holy Quran. Horses Kathiawadi, Marwari, and Manipuri breeds. Fresh and frozen silver prom frets of weight less than 300gm. Paddy (Rice in husk). Seaweeds of all types. Chemical Fertilizer all types.
Canalized Items : can be exported without an export license through designated State Trading Enterprise
Items Canalizing Agency Onions (Except Bangalore Rose onion and Krishnapuram Onion) Export Permitted through Specified STEs Niger Seeds Tribal Cooperative Marketing Federation of India (TRIFED) New Delhi National Agricultural Cooperative Marketing Federation of India(NAFED) Gum Karaya Tribal Cooperative Marketing Federation of India(TRIFED), New Delhi Iron ore, Manganese ore, and Chrome ore. Metals and Minearals Trading Corporation (MMTC). Crude Oil Indian Oil Corporation Limited Freely Exportable Items : can be exported without an export license from DGFT. However export of such items is subject to certain procedures or conditions.
Item Description Procedures or Conditions Military Stores as notified by DGFT No objection certificate from the Department of Deface Production and Supplies Exotic Birds, such as Bangali finches, White finches and Zebra Subject to Pre- shipment inspection. Bones and bone products Subject to a certificate from chemical and Allied Products Export Promotion Council (CAPEXIL) Basmati Rice Subject to registration of contracts with Agriculture and Processed food Products Export Development Authority. Exim Policy 2002 2007 Mr. Murasoli maran, Former commerce minister announced the exim policy 2002 - 2007 . it deals with both the export and import of merchandise and services. It is worth mentioning here that the exim policy: 1997 - 2002 had accorded a status of exporter to the business firm exporting services with effect from1.4.1999. Such business firms are known as service providers.
Objectives:- o To encourage economic growth of India by providing supply of essential raw materials, intermediates, components, consumables and capital goods required for augmenting production and providing services. o To improve the technological strength and efficiency of Indian agriculture, industry and services, thereby improving their competitive strength o To facilitate sustained growth in exports to attain a share of atleast 1% of global merchandise trade.
o 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.
Policy are:- Special economic zones (sezs):- offshore banking units shall be permitted in sezs to indian banks. Units in SEZ would be permitted to undertake hedging of commodity price risks, provided such transactions are undertaken by the units on stand-alone basis. It has also been decided to permit external commercial borrowings for a tenure of less than three years in sezs. It is exempted from CRR and SLR. Employment-Oriented a) Agriculture: Export restrictions like registration and packaging requirement are removed. Quantitative and packaging restrictions have been removed. Restrictions on export of all cultivated varieties of seed, except jute and onion, removed. To promote export of agro and agro based products, 20 agri export zones have been notified. In order to promote diversification of agriculture, transport subsidy shall be available.
b) Cottage Sector and Handicrafts: An amount of Rs. 5 crore under Market Access Initiative (MAI) has been earmarked for promoting cottage industry. These units shall be entitled to the benefit of Export House status on achieving lower average export performance of Rs.5 crore as against Rs. 15 crore for others. The units in handicraft sector shall be entitled to duty free imports of an enlarged list of items as embellishments upto 3% of FOB value of their exports.
c) Small Scale Industry: Common service providers in these areas shall be entitled for facility of EPCG scheme. Such areas will receive priority for assistance for identified critical infrastructure gaps from the scheme on Central Assistance to States. Entitlement for Export House status at Rs. 5 crore.
d) Textiles: Sample fabrics permitted duty free within the 3% limit for trimmings and embellishments. Duty Entitlement Passbook (DEPB) rates for all kinds of blended fabrics permitted. Such blended fabrics to have the lowest rate as applicable to different constituent fabrics.
e) Gem & Jewellery : Customs duty on import of rough diamonds is being reduced to 0%. Licensing regime for rough diamond is being abolished. This should help the country emerge as a major international centre for diamonds Technology-oriented Electronic Hardware: The electronic hardware technology park (EHTP) scheme is being modified to enable the sector to face the zero duty regime under ita(information technology agreement). Projects: Free import of equipment and other goods used abroad for more than one year.
Growth-Oriented Strategic Package for Status Holders:-The status holders shall be eligible for the following new/ special facilities: Licence/Certificate/Permissions and Customs clearances for both imports and exports on self-declaration basis. Fixation of Input- Output norms on priority. Priority Finance for medium and long term capital requirement as per conditions notified by RBI. Exemption from compulsory negotiation of documents through banks.
Implications: This policy focused on all round development of India whather it was technology oriented or growth oriented. The contribution of agriculture and allied sector was also increased to exports with the help of certain privilleges and incentives. The cottage industry has also started to contribute to exports. It also focused on small and medium sector enterprises. It also helped in developing the industrial sector by importing capital and raw material goods duty free.
EXIM POLICY(2004-2009) Mr. Kamal Nath, Union Commerce Minister announced the foreign trade policy for 5 years on 31 august 2004.
Objectives:- To double Indias percentage share of global merchandise trade from 0.7% in 2003 to 1.5% in 2009.
To act as an effective instrument of economic growth by giving a thrust to employment generation especially in semi-urban or rural areas.
Strategies to achieve these objective are:- Unshackling of control. Creating an atmosphere of trust and transparency. Simplifying procedures and bringing down transaction costs. Adopting fundamental principle that duties and levies should not be exported. Facilitating development of India as a global hub for manufacturing, trading and services Identifying and nuturing special focus areas to facilitate development. Facilitating technological and infrastructural upgradation of all the sectors of Indian Economy.
Policy are:- Special Focus Initiatives:- With a view to doubling percentage share of global trade within 5 years and expanding employment opportunities, especially in semi urban and rural areas, certain special focus initiatives have been identified for the agriculture, handlooms, handicraft, gems & jewellery and leather sectors.
Agriculture:- A new scheme called the Vishesh Krishi Upaj Yojana (Special Agricultural Produce Scheme) for promoting the export of fruits, vegetables, flowers, minor forest produce, and their value added products has been introduced. Import of capital goods shall be permitted duty free under the EPCG Scheme.
Handlooms and Handicraft:- specific funds would be earmarked for promoting handloom and handicraft exports. Duty free import entitlement of specified trimmings and embellishments shall be 5% of FOB value of exports during the previous financial year. New towns of export excellence with a threshold limit of Rs 250 crore shall be notified.
Gems & Jewellery:- Import of gold of 18 carat and above shall be allowed under the replenishment scheme. Duty free import entitlement of consumables for metals other than Gold, Platinum shall be 2% of FOB value of exports during the previous financial year. Duty free re-import entitlement for rejected jewellery shall be 2% of the FOB value of exports
Board of Trade: The Board of Trade shall be revamped and given a clear and dynamic role in advising government on relevant issues connected with Foreign Trade Policy. There would be a process of continuous interaction between the Board of Trade and Government in order to achieve the desired objective of boosting India
Export promotion scheme: A new scheme called target plus has been introduced. Duty free credit would be entitled to exporters on incremental exports. For incremental growth of over 20%, 25% and 100%, the duty free credit would be 5%, 10% and 15% respectively, of fob value of incremental export.
Service export: Scheme called served from india as a brand instantly recognized abroad in which individual service providers earning foreign exchange of Rs. 10 lakh would be elligible for 10% of total foreign exchange earning.
Duty free import under EPGC (Export promotion Capital goods): The scheme allows import of capital goods for pre production, production and post production at 5% Customs duty. Capital goods would be allowed at 0% duty for exports of agricultural products.
Export Oriented unit(EOUs):- EOUs shall be exempted from service tax in proportion to their exported goods and services.
New stautus hoder categorization:- One star export house: Rs. 25 crore, two star export house: Rs. 100 crore, three star export house: Rs. 500 crore, four star export house: Rs. 1500 crore and five star export house: Rs. 5000 crore It will be entitled to a number of privileges including fast track clearance procedure, exemption from furnishing back guarantees etc.
Import of second hand capital goods shall be permitted without any age restriction
Bio technology park is setup.
Duty Drawback: The Duty Drawback Scheme is administered by the Directorate of Drawback, Ministry of Finance. Under Duty Drawback scheme, an exporter is entitled to claim. Indian Customs Duty paid on the imported goods and Central Excise Duty paid on indigenous raw materials or components.
Excise Duty Refund: Excise Duty is a tax imposed by the Central Government on goods manufactured in India. Excise duty is collected at source, i.e., before removal of goods from the factory premises. Export goods are totally exempted from central excise duty.
Neutralising high fuel costs: Fuel costs to be rebated by it in Standard Input Output Norms (SIONs) for all export products. This would enhance the cost competitiveness of our export products.
Re-location of industries: To encourage re-location of industries to India, plant and machineries would be permitted to be imported without a licence, where the depreciated value of such relocating plants exceeds Rs. 50 crores.
Foreign Trade Warehousing Zones: Proposals for setting up of FTWZs may be made by public sector undertakings or public limited companies or by joint ventures in technical collaboration with experienced infrastructure developers. The proposals shall be considered by the Board of Approval in the Department of Commerce. On approval, the developer will be issued a letter of permission for the development, operation and maintenance of such FTWZ. Foreign Direct Investment would be permitted up to 100% in the development and establishment of the zones and their infrastructural facilities. The proposal must entail a minimum outlay of Rs.100 crores for the creation and development of the infrastructure facilities, with a minimum built up area of five lakh sq.mts.
DFIA: Effective from 1st May, 2006, Duty Free Import Authorisation or DFIA in short is issued to allow duty free import of inputs which are used in the manufacture of the export product (making normal allowance for wastage), and fuel, energy, catalyst etc. which are consumed or utilised in the course of their use to obtain the export product. Duty Free Import Authorisation is issued on the basis of inputs and export items given under Standard Input and Output Norms(SION). Deemed Export is a special type of transaction in the Indian Exim policy in which the payment is received before the goods are delivered. The payment can be done in Indian Rupees or in Foreign Exchange. As the deemed export is also a source of foreign exchange, so the Government of India has given the benefit duty free import of inputs Implication of policy:- It is claimed that first time the nation has presented such a comprehensive policy. But in it there is not anything significant about import development.
This policy provide benefit to some thrust areas which are agriculture, handicrafts, handlooms etc. which are dominated by small and medium enterprises so it helped in boosting export and generating employment.
By rationalizing star export houses into five star export house, it helped in encouraging small export house.
It also focussed on service industry.
Target plus scheme act as an incentive to exporter.
All goods and services were exempted from service tax.
No additional custom duty on import of capital goods for marine and electronic sector. In an attempt to encourage small scale sector, they are given triple weightage to include in export house or trade house. All goods and services were exempted from service tax Uneffective implementation make difficult to achieve the real objective of the policy.
EXIM POLICY 2009-2010 IT HIGHLIGHT Rupees 325 Crores would be provided under Promotional Schemes for Leather, Textile etc. for exports made with effect from 1.4.09.
Technical textiles and stapling machine have been added under Focus Product Scheme.
STCL Limited, Diamond India Limited, MSTC Limited, Gem & Jewellery Export Promotion Council and Star Trading Houses (for gem and jewellery sector) have been added under the list of nominated agencies notified under Para 4A.4 of Foreign Trade Policy for the purpose of import of precious metals.The procedure and monitoring provisions for implementation of these additional agencies would be notified separately in line with RBI guidelines. Export obligation period against advance authorizations has been extended upto 36 months in view of the present global economic slowdown. At present, DEPB/Duty Credit Scrip can be used for payment of duty only on items which are under free category. The utilization is now extended for payment of duty for import of restricted items also. Value cap applicable under DEPB have been revised upwards for products. Under EPCG scheme, in case of decline in exports of a product(s) by more than 5%, the export obligation for all exporters of that product(s) is to be reduced proportionately. This provision has been extended for the year 2009-10, for exports during 2008-09. In view of the prevailing global slowdown, the threshold limit for recognition as Premier Trading House has now been reduced to Rs.7500 crores.
Bhilwara in Rajasthan and Surat in Gujarat have been recognized as Towns of Export Excellence, for textiles and diamonds respectively.
Export of blood samples is now permitted without license after obtaining no objection certificate from Director General of Health Services (DGHS).
Independent office of DGFT being opened at Srinagar.