FOREIGN TRADE POLICY (FTP)

1. FOREIGN TRADE POLICY (FTP) Prepared by: Avani Agrawal January 13, 2014

2. Content • What is FTP? • Statistical data of India’s International Trade • History of foreign Trade policy • Correlation of foreign Trade policy • Composition of FTP • Import within framework of FTP

3. What is FTP? • Foreign trade policy is combination of two words – Foreign Trade and Policy : • Foreign trade is exchange of goods and services between nations. Goods can be defined as finished goods, intermediate goods used in producing other goods and as Agriculture products or food stuff etc. • Policy :- a course or principle of action adopted or proposed by an organization or individual. • In case of Foreign trade policy, it is released by Ministry of commerce, India.

4. India’s International Trade

5. India’s Export Shifting Southwards

6. India’s Import Shifting Southwards

7. India’s Major Trading Partners

8. India’s Trade Basket

9. India’s Trade in Service

10. India’s Direct Investment Flow

11. India’s Foreign Direct Investment Outflow

12. India’s Foreign Direct Investment Inflow

13. Global Leading Exporters (In US$ bn)

14. Global Leading Exporters (% Share)

15. Shares of Leading Exporters in Global Service

16. Sharesof Leading Exporters in Global Service

17. Summary of video • Why International Trade- skill & Resources • Commodities & Services • Capability / viability • External Trade • Surplus production • Export / Import – which is better ? • Comparative cost advantage • Trade barriers- Tariff / Non Tariff • FTP – Surplus / deficit

18. HISTORY : Scenario pre 1991 • Scenario pre 1991 • GDP 4% • Negative Foreign Reserves • No FDI • Bureaucratic controls • Complex legislations • manufacturer protective policies • High import duties

19. Scenario post 1991 • LPG – Liberalization, Privatization, Globalization • GDP growth 8% • End of Licensed Raj / Smuggling Economy • A marked shift from “protecting producers” to “Benefiting consumers” • Markets opened up for IMPORT / simplification of rules • Drastic cut in Import duties • Emergence of worldwide financial markets & better access to external financing • Realization of a common global market, based on the freedom of exchange of Goods & capital

20. Objective of EXIM Policy • To establish the framework for globalization of India’s Foreign Trade. • To promote the productivity, modernization and competitiveness of Indian Industry and thereby to enhance its export capabilities. • To encourage the attainment of high and internationally accepted standards of quality and thereby enhance the image of India’s products abroad. • To increase India’s exports by facilitating access to raw materials, intermediates, components, consumables, and capital goods from the international markets. • To promote efficient and internationally competitive import substitution and self – reliance under deregulated framework for foreign trade.

21. Contd…. • To eliminate or minimize quantitative, licensing and other discretionary controls in the framework of India’s Foreign Trade. • To foster the country’s Research and Development and technological capabilities. • To simplify and streamline the procedure governing exports and imports.

22. Foreign Trade Policy Correlation with • Foreign Trade (Developments & Regulation ) Act • Foreign Trade (Regulation) Rules, 1993 • Customs Act, 1962 • Custom Tariff Act, 1975 • Foreign Exchange Management Act, 1999 • Exchange Control Regulations • Industrial Policy Resolution, 1956 • Industrial development & regulation Act, 1951 • Law of weight & Measures • Central Excise

23. Composition of FTP • Notifications • General Provisions • Imports & Exports • Duty Exemption schemes • EPCG • 100% EOU • Special Economic Zone • Definitions

24. What can Import within Framework of FTP? • Capital Goods • Components • Raw materials • Accessories • Spares • Consumables • Consumer Goods

25. Export Documents & Procedure

26. Learning • Introduction • Registration Stage • Pre – shipment stage • Shipment stage • Post – shipment stage

27. Registration Stage • Registration of Organization • Opening Bank Account • Obtaining Import Export Code Number (IEC No.) • Obtaining PAN • Obtaining Sales Tax Number • Registration with Export Promotion Council • Registration with ECGC • Registration with other Authorities (FIEO, ITPO, COC)

28. List of EPCs Industry Wise • Agricultural and Processed Food Products Export Development Authority • Apparel Export Promotion Council • Basic Chemicals Pharmaceuticals & Cosmetic Export Promotion Council •  Carpet Export Promotion Council •  Cashew Export Promotion Council of India •  Chemicals and Allied Products Export Promotion Council •  Coffee Board  Rubber Board •  Coir Board Spices Board • Cotton Textiles Export Promotion Council •  Council for Leather Exports •  Engineering Export Promotion Council •  Export Promotion Council for EOUs and SEZ Units •  Electronics & Computer Software Export Promotion Council •  Export Promotion Council for Handicrafts • Gem & Jewellery Export Promotion Council •  Handloom Export Promotion Council •  Indian Silk Export Promotion Council •  Indian Oilseeds & Produce Exporters Association EPC (IOPEA) • Jute Manufacturers Development Council •  Marine Products Export Development Authority •  Project Exports Promotion Council of India •  The Plastics Export Promotion Council •  Powerloom Dev. and Export Promotion Council •  Pharmaceutical Export Promotion Council •  Service Export Promotion Council •  Shellac Export Promotion Council • Sports Goods Export Promotion Council •  Synthetic & Rayon Textiles Export Promotion Council •  Tea Board  Tobcco Board •  Wool and Woollen Export Promotion Council

29. Pre – Shipment Stage • Approaching Foreign Buyer • Inquiry and offer • Confirmation of order • Opening Letter of Credit • Arrangement of pre - shipment Finance • Production or procurement of goods • Packing and Marking • Pre shipment Inspection • Obtaining Insurance Cover • Appointment of C & F Agent

30. Shipment Stage • Reservation of Shipping Space • Container Stuffing • Arrangement of Internal Transportation up to Port of Shipment • Preparation & Processing of Shipping Documents • Custom Clearance • Obtaining Carting Order from the port Trust Authority • Custom Examination & Issue of Let Export order • Obtaining Let Ship Order from the custom preventive officer • Obtaining Mate’s Receipt & Bill of Lading

31. Post - Shipment Stage • Submission of Document by the C & F Agents to Exporters • Shipment Advice to Importer • Presentation of Documents to Bank for Negotiation • Dispatch of Documents • Acceptance of Bill of Exchange • Letter of Indemnity • Realization of Export Proceeds • Processing of GR Form • Realization of Export Incentives

32. Quality Control & Pre – Shipment Inspection • Methods of Quality Control & Pre – Shipment Inspection • Self – Certification • In Process Quality Control • Consignment wise Inspection Units Exempted from the Inspection Procedure Export House, Trading House, EOU, EPZ,

33. Excise Duty Refund • Export Under Rebate • Export Under Bond • Conditions for Central Excise Clearance

34. Procedure for Central Excise Clearance • Application to the Assistant Collectors of Central Excise. • Information to the Range Superintendent • Sealing of Goods • Processing of ARE – 1 forms • Examination of Goods at place of export • Submission of claim • Verification of the Application • Refund of Duty • Cancellation of Documents

35. Realization of Export Incentives • Claim of Duty Drawback • Whom to Apply • When to Apply • Documents to be submitted • Claim of Central Excise Duty • Whom to Apply • When to Apply • Documents to be submitted • Refund of Duty

36. Contd… • Claim of Octroi Refund • Whom to Apply • When to Apply • Documents to be submitted • Refund of Duty • Claim of Rail Freight Rebate • Claim of Air Freight Rebate

37. Marine Insurance • Perils of Sea Includes:- • Sinking of Ship • Damage to the ship and cargo due to dashing of the waves • Dashing of the ships on the rocks • Fire or explosion on the ship • Spoilage of cargo due to sea water

38. Types Marine Insurance • Time Policy • Voyage Policy • Mixed Policy • Valued Policy • Unvalued Policy • Fleet Policy • Floating Policy • Specific cover Policy • Open cover Policy

39. Thank You!