Presentation on Foreign Trade Policy 2004-09

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%

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)

Objectives (Contd….)

# Facilitating high share of Indian Goods 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

STRATEGY TO ACHIEVE THE OBJECTIVES

# 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.

Thrust Sectors

# Agricultural# Handicrafts# Handlooms# Gems and Jewellery# Leather# Textile

Digital automation target

#All Export transactions would be through EDI mode by 31st October, 2005;

# Digital Signature and EFT facility operational

India’s Foreign Trade Period - $ Growth Rate 1999-2000 10.85 2000-2001 21.01

2001-2002 -1.65

2002-2003 20.34

2003-2004 17.26

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

Export Incentives(DOC)

CENTRAL DUTY REFUND/

NEUTRALISATION/EXEMPTION SCHEMES

Pre-export

Post-export

Market DevelopmentInitiatives

INFRA-STRUCTURE Related Sops

MDA Grant MAI Grant

ASIDESCHEME

TOWNS OFEXPORT

EXCELLENCE

Additional incentives Linked with Exports

Duty exemptionsUnder CustomsNotif. 21/2002

Misc.IncentivesSuch as DFEC,

Target Plus, Addl. weightage

CENTRAL DUTIES

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

Anti-dumping, Safeguard duties etc.

EXCISE DUTY--- Basic, Addl etc.

EXPORT CESS

CENTRAL SALES TAX

INCOME TAX

SERVICE TAX

OTHERS ELECTRICITY DUTY, OCTROI, SALES TAX etc.

SCHEMES

# SEZ Scheme

# EOU/EHTP/STP/BTP Schemes

# EPIP Scheme

# Warehousing Scheme

# CCP

# DTA Schemes

DTA SCHEMES

Pre-ExportPost-Export

1. ADVANCE LIC.2. EPCG

1. DFRC, 2. DEPB, 3.REP 2. DRAWBACK—Phy & D.E.3. TED Refund4. Target Plus5. DFEC for Service Sec6. Vishesh Krishi Upaj Yojana

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

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)

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)

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

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

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

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;

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

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 for individuals) -- Categories of exports excluded for entitlement 2. 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

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

STATUS CERTIFICATES

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

THANKS