Highlights of the

Annual Supplement 2010-11

to the
Foreign Trade Policy 2009-14
Group I- Aabhansh, Aditya, Amit, Ankit, Anshul,
Ashutosh, Bhaskar, Churchil, Hema
INTRODUCTION
 The Foreign Trade Policy for the period 2009-2014 was
announced on 27th August 2009 at a time when the world
was emerging from the shadow of a challenging economic
period, the worst India has seen in the last 7 decades.
 The key objective for the Foreign Trade Policy was to arrest
the declining exports and reverse the trend.
 Labour intensive sectors are being given special attention and
the policy parameters have been crafted to enhance the
competitiveness of exports by supporting up gradation in
technologies.
 Policy announcements which are made this year, will help
achieving export target of US$ 200 billion in the fiscal year
2010-11 and over the remaining 3 years of Policy, India
should be able to come back on the high export growth
trajectory of 25% per annum and by 2014, there is
expectation of India’s exports of goods and services getting
doubled.
FOCUS
 Market Diversification,
 Technological Upgradation,
 Support to status holders,
 Agriculture,
 Handlooms,
 Handicraft,
 Gems & Jewellery,
 Leather, Marine,
 Electronics and IT Hardware manufacturing Industries,
 Green products,
 Exports of products from North-East,
 Sports Goods and Toys sectors.
Higher Support for Market and
Product Diversification
 Additional benefit of 2% bonus, over and above the existing benefits
of 5% / 2% under Focus Product Scheme, allowed for about 135
existing products, which have suffered due to recession in exports.
Major sectors include all Handicrafts items, Silk Carpets, Toys and
Sports Goods; Leather Products and Leather Footwear, Handloom
Products and Engineering Items including Bicycle parts and
Grinding Media Balls.
 256 new products added under FPS (at 8 digit level), which shall be
entitled for benefits @ 2% of FOB value of exports to all markets.
Major Sectors / Product Groups are Engineering, Electronics,
Rubber & Rubber Products, Other Oil Meals, Finished Leather,
Packaged Coconut Water and Coconut Shell worked items.
 Instant Tea and CSNL Cardinol included for benefits under VKGUY @
5% of FOB value of exports.
 Nearly 300 products (at 8 digit level) from the readymade garment
sector incentivised under MLFPS for further 6 months from October,
2010 to march, 2011 for exports to 27 EU countries.
Support for Technological up-
gradation
Zero duty EPCG scheme, introduced in August
2009 and valid for only two years upto 31.3.2011,
has been extended by one more year till 31.3.2012.
The benefit of the scheme has been expanded to
cover paper & paperboard and articles thereof,
ceramic products, refractories , glass & glassware,
rubber & articles thereof, Plywood and allied
products, marine products, sports goods and toys
and additional engineering products.
 Additional Towns of Export Excellence (TEEs)
announced viz. Barmer (Rajasthan) for Handicrafts;
Bhiwandi (Maharashtra) for Textiles; and Agra
(Uttar Pradesh) for Leather Products.
Benefit and flexibility to Status
Holders
Status Holders contribute to a substantial part of our
exports. To support them to upgrade their technology, 1%
Status Holder Incentive Scheme (SHIS) introduced in
August 2009 and valid for only two years upto 31.3.2011,
has been extended by one more year for 2011-12 exports.
In addition, to give a boost to technological up-gradation
for additional sectors as well, the benefit of the scheme
has been expanded to cover chemical & Allied products,
paper, paperboard and articles thereof, ceramic products,
refractories, glass & glassware, rubber & articles thereof,
plywood and allied products, electronics products, sports
goods and toys and additional engineering products.
Stability / Continuity of the Foreign
Trade Policy:
 The popular and exporter friendly Duty Entitlement Passbook
(DEPB) scheme has been extended beyond 31.12.2010 till
30.06.2011.
 Interest subvention of 2% for pre-shipment credit for export
sectors namely, Handloom, Handicraft, Carpet and SMEs for
all export sectors, have been allowed till 31.3.2011 in the
budget 2010-11. This facility has now been extended to a
number of additional products pertaining to sectors like
Engineering, leather, textiles, Jute.
 Advance Authorization for Annual Requirement shall also be
exempted from payment of anti-dumping & Safeguard duty in
line with the underlying principle that goods and services
should be exported and not the taxes and levies.
Procedural Simplification and
Reduction of Transaction Cost:
 Exporters shall now have the flexibility to get a high value EPCG
authorisation by filing their EPCG application on Annual basis, without the
need to file the application for individual capital goods from time to time. It
will reduce transaction time and cost.
 Exporters shall now have the flexibility to Club Advance authorisation with
Advance Authorisation for Annual Requirement for the purpose of account
closure.
 To impart flexibility to exporters and to facilitate smooth clearance of
consignments, a Single customs notification for the two variants of Advance
Authorization scheme namely advance authorisation for physical exports &
deemed exports shall be issued. It will also eliminate the ambiguity in
clubbing of such exports.
 Adhoc Norms ratified under Advance Authorisation scheme shall henceforth
apply to all cases for the same export product upto one year not only
prospectively but also retrospectively.
 Clarification on the availability of 4% SAD refund benefit, as given by DOR in
terms of customs Notification No. 102/2007, only to trader importers, to be
also extended to manufacturers, who sell the imported items like traders.
 Chartered Engineer Certificate for Advance Authorisation on self declared
basis, has been dispensed with. This will reduce documentation and the
transaction cost.
EDI INITIATIVES
To reduce the transaction cost and time, the scope and domain of
EDI is endeavoured to be continuously broadened.
Facility of a data preparation module for Advance Authorization
and Export Promotion Capital Good (EPCG) has been provided on
an offline mode, which would reduce the need of continuous
online interaction for long and address the connectivity and server
response issues significantly.
 In order to provide wider choice to the users and enlarge access
for online filing, additional licenced certifying authorities for
digital signatures and banks for electronic fund transfer (EFT)
operations have been included in the gamut of EDI operations.
 The online message exchange for Annual Advance Authorization
and Duty Free Import Authorization (DFIA) shall also be made
operational with Customs w.e.f. 1.12.2010.
AGRICULTURE AND PLANTATION:
Instant Tea and CSNL Cardinol included for
benefits under VKGUY @ 5% of FOB value of
exports.
Oil Meals (Cotton, rape seed, groundnut),
Castor Oil derivatives, Packed Coconut
Water and Coconut Shell worked items shall
be entitled for benefits @ 2% of FOB value of
exports to all markets under FPS.
HANDLOOMS
Duty free import of specified trimmings,
embellishments etc. shall be available on Handloom
made-ups exports @ 5% of FOB value of exports.
Additional 2% bonus benefits over and above the
existing benefits under Focus Product Scheme
would significantly benefit the Handloom Sector.
LEATHER SECTOR:
Leather sector shall be allowed re-export of unsold
imported raw hides and skins and semi-finished
leather from Public bonded warehouses, without
payment of any export duty. This will facilitate the
logistics for establishment of such warehouses and
easy access to raw material for the leather sector.
 Finished Leather export shall be entitled for Duty
Credit Scrip @ 2% under FPS.
 Additional 2% bonus benefits over and above the
existing benefits under Focus Product Scheme
would significantly benefit the Leather Sector.
TEXTILES SECTOR:
Duty free import of specified trimmings,
embellishment etc shall be available @ 3% on
exports of polyester made-ups in line with the
facility available to sectors like Textiles & Leather. It
will promote export of products such as micro
cloth, which has become popular in home textiles.
Readymade Garment sector granted enhanced
support under MLFPS for a period of further 6
months from October, 2010 to March, 2011 for
exports to 27 EU countries.
GEMS & JEWELLERY SECTOR:
The list of items allowed for duty free import
by Gems & Jewellery sector has been
expanded by Inclusion of additional items
such as Tags and labels, Security censor on
card, Staple wire, Poly bag. This will reduce
the cost of the product to some extent.
HANDICRAFT SECTOR:
The facility of duty free import of tools
under Duty Free Import scrips for
Handicraft sector shall be made operational.

Additional 2% bonus benefits over and

above the existing benefits under Focus
Product Scheme will significantly benefit the
Handicrafts and Silk Carpets sectors.
SERVICE SECTOR:
 Scrips issued under Served From India
Scheme (SFIS) can now be used for payment of
duty on import of Vehicles, which are in the
nature of professional equipment.
Engineering and Electronics:
 Additional 2% bonus benefits over and above the existing benefits
under Focus Product Scheme will significantly benefit Bicycle parts
and Grinding Media Balls exporters.
 Additional items of Engineering, namely, Pipes & Tubes, Electric
Generating Sets, Cast Articles of Iron & Steel, Ferro Manganese and
Ferro Silicon shall now be entitled for benefit @ 2% under FPS.
 A number of Engineering items namely, Machine Tools,
Compressors, Iron & Steel Structures including Transmission Towers
and Scaffolding, LPG Cylinders, Ductile Tubes & Pipes shall now be
entitled for benefits @ 2% of FOB value of exports to all markets
under FPS instead of their exports to specific markets under MLFPS
earlier.
 Telecom Equipments, Color TVs, Audio Systems, Optical Media,
Semi-conductors, Capacitors, Resistors, PCBs, LEDs, Conductors,
Desktops and Notebooks shall now be entitled for benefits @ 2% of
FOB value of exports to all markets under FPS instead of their
exports to limited market under MLFPS earlier.
TOYS AND SPORTS GOODS:
Additional 2% bonus benefits over and
above the existing benefits under Focus
Product Scheme will significantly benefit the
Toys and Sports Goods Sector.
Benefits under Zero duty EPCG and SHIS
schemes will significantly promote
technological upgradation of Toys and
Sports Goods sectors.
Any Question ?
Thank You