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Presentation on Foreign Trade Policy 2004-09

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Objective:-# Facilitate sustained growth in exports to attain a share of atleast 1.5% of global merchandise trade.# Present share - 0.67% # Export target (2006-07)- 85 b $.# Present Annual growth rate(CAGR) -11.9%

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New Export Target# Target- 1.5% of the International Trade# CAGR Required- 15.18% (in US$ terms)# Assumption- World Trade Growth @ 4.5% (2003 rate)

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Objectives (Contd….)# Facilitating high share of IndianGoods and Services in the International market# Act as Instrument of Economic Growth, Employment Generation and Poverty Alleviation# Reflect the priorities for development of the Indian Economy

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# Bring down transaction cost– Simplified procedure,

Unshackling of controls, built-in transparency &

mutual trust;

# India to be a Global hub for Manufacturing, Trading

& Services;

# Special Focus area Initiatives;

# Facilitating Technological & Infra-structural upgradation;

# Neutralising incidence of all levies & duties on inputs—

Duties & Levies should not be exported.

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  • Thrust Sectors# Agricultural# Handicrafts# Handlooms# Gems and Jewellery# Leather# Textile

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Digital automation target#All Export transactions would be through EDI mode by 31st October, 2005;# Digital Signature and EFT facility operational

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India’s Foreign TradePeriod - $ Growth Rate1999-2000 10.85 2000-2001 21.01 2001-2002 -1.65 2002-2003 20.34 2003-2004 17.26

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Incorporating a legal entity Proprietorship& In India [ROC] Partnership Concern Trade Licence [State Departments]Permanent Acccount Number Bank Certificate [PAN by Income Tax Dept.] [from the concerned Bank] Importer-Exporter Code Number[DGFT]EXPORTS IMPORTS Nature of Restriction ITC[HS] Classification Free List items Negative List Prohibited Restricted Canalized

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Related Sops






Export Incentives(DOC)

Duty exemptions

Under Customs

Notif. 21/2002


Such as DFEC,

Target Plus, Addl.


Additional incentives

Linked with Exports









MDA Grant

MAI Grant

Market Development


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CUSTOMS DUTY—Basic, Addl(CVD), E.Cess,

Anti-dumping, Safeguard duties etc.

EXCISE DUTY--- Basic, Addl etc.







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# SEZ Scheme


# EPIP Scheme

# Warehousing Scheme


# DTA Schemes

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  • DFRC, 2. DEPB, 3.REP

  • DRAWBACK—Phy & D.E.

  • TED Refund

  • Target Plus

  • DFEC for Service Sec

  • Vishesh Krishi Upaj Yojana


  • EPCG

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Physical (out of India/Supply to SEZ) (Against Indian Rupees or Free foreign Exchange) EXPORTS Supply within the country(Deemed) (In Indian Rupees or Free Foreign Exchange—EEFC)Exporters:-- Physical Vs Merchant

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ADVANCE LICENCE SCHEME X----------Y--------Z1. PHYSICAL EXPORT -- Duty free import of Inputs, Fuel, Oil, Energy, Catalyst etc. -- +V.A.;AU condition; Norm fixed & No Norm cases; Imports & Exports valid upto 24 months; Further extn allowed -- Supply to SEZ units also covered; -- E.O. discharge based on S/Bs & BRC (Irrevocable L/C , Provision of Avalisation, co-acceptance also available)

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2. Advance Licence (Intermediate Supply) -- For supplies to Advance licence for physical exports; Alternatively direct Physical Exports also allowed -- Duty free import of Inputs, Fuel, Oil,Energy, Catalyst etc. -- +V.A.;AU condition; Norm fixed & No Norm cases; Imports & Exports valid upto 24 months; Further extn allowed -- E.O. discharge based on S/Bs & Bank certificate (Irrevocable inland L/C , Provision of Avalisation, co-acceptance also available)

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3. Advance Licence (Deemed Export) -- For supplies within India under various projects, supplies to EOU/EHTP/STP/BTP -- Duty free import of Inputs, Fuel, Oil, Energy, Catalyst etc. -- +V.A.;AU condition; Norm fixed & No Norm cases; Imports & Exports valid upto 24 months or co-terminus with the project; Extn allowed -- E.O. discharge based on S/Bs & Bank certificate (Irrevocable inland L/C, Provision of Avalisation, co-acceptance also available) -- Anti-dumping & Safeguard duty not exempted except supplies to EOU/EHTP/STP/BTP

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EPCG Scheme--Import of capital goods with AU condition at concessional rate of 5% duty for pre-production, Production & Post production purposes related to export (Both Physical & deemed);Import of Car-- E.O. 8 times the duty saved in 8 years; 12 Years;-- E.O. monitoring in two blocks only -- Special Dispensation for licence with duty saved of Rs 100 crores or above, Agro units, SSI units, BIFR. E.O. period 12 years and varied /reduced E.O.-- EPCG licence for project import—Reduced E.O.-- Export of alternate product/services allowed-- Special package for agro units in the AEZ

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DFRC SCHEME--Post export scheme based on S/B (Bill of Export) and BRC; Both against Phy. & Deemed exports;--Min. 25% V.A., SION based, Certain sensitive items with technical specification allowed;--Freely transferable certificate; However DFRC with AU condition also available;24 months valid; --Fuel allowed to be transferred to marketing agencies authorised by Ministry of P&NG;--Facility of CENVAT credit or drawback--Only basic customs duty exemption at the time of imports

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4.DEPB SCHEME --Post export scheme based on S/B (Bill of Export) and BRC; Freely transferable unless specified;-- Supplies to SEZ units also elligible--Based on basic customs duty on inputs--Filing of application and late cut--CENVAT credit or drawback available;--Any item including CG (freely importable) allowed for import;--Valid for 24 months;

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TARGET PLUS SCHEME--- For Star Export Houses;-- Duty credit based on Incremental exports(fob value in free foreign exchange) subject to a minimum export turnover of Rs 10 crores in the previous year;-- Entitlement: 1. >20% & <25% 5% >=25% & <100% 10% >=100% 15%(Based on max. 100%growth) 2. Restrictions on export turnover calculation 3. Imports allowed-- CENVAT credit or DBK allowed for the CVD paid/debited

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SERVICE EXPORTS-- For 161 Tradable services-- New Export Promotion Council for Services-- DFEC for Serve from India Scheme 1. Eligibility: -- Min.FFE of Rs 10 Lakhs in the preceding or current financial year (Exception Rs 5 Lakhs forindividuals)-- Categories of exports excluded for entitlement2. Entitlement:Hotels of one star & above 5% Stand alone Restaurants 20% All other service providers 10% 3. Imports allowed: -- With AU condition -- Any CAPITAL GOODS, Office Equipments, Furnitures and consumables etc -- No Agricultural Product except food items and beverages for the Hotels and Restaurants

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VISHESH KRISHI UPAJ YOJANA--A new scheme christened as the “Vishesh Krishi Upaj Yojana” to boost exports of specified agricultural products. 1. Duty credit entitlement of 5% of FOB value of Exports. 2. Exports of fruits, vegetables, flowers, minor forest produce and their value added variants 3. Freely transferable 4.Imports of inputs and capital goods permitted.5.CENVAT credit or DBK allowed for the CVD --Import of capital goods shall be permitted duty free under the EPCG Scheme--Units in Agri Export Zones (AEZ) shall be exempt from BG under the EPCG Scheme -- Import of inputs such as pesticides shall be permitted under the Advance Licence for agro exports. --Capital goods imported under EPCG permitted to be installed anywhere in the AEZ

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STATUS CERTIFICATES--One star to Five Star Export House-- Double weightage for certain categories-- Special Privileges