this site provides comprehensive information on foreign trade policy of india

8/8/2019 This Site Provides Comprehensive Information on Foreign Trade Policy of India

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This site provides comprehensive information on Foreign Trade Policy of India . The site alsofocuses on India's achievements as a result of its well designed Foreign Trade Policy.

To become a major player in world trade, a comprehensive approach needs to be taken throughthe Foreign Trade Policy of India . Increment of exports is of utmost importance, India will

have to facilitate imports which, are required for the growth Indian economy. Rationality andconsistency among trade and other economic policies is important for maximizing thecontribution of such policies to development. Thus, while incorporating the new Foreign TradePolicy of India, the past policies should also be integrated to allow developmental scope ofIndias foreign trade. This is the main mantra of the Foreign Trade Policy of India.

Objectives of the Foreign Trade Policy of India -

Trade propels economic growth and national development. The primary purpose is not the mereearning of foreign exchange, but the stimulation ofgreater economic activity. The ForeignTrade Policy of India is based on two major objectives, they are -

y To double the percentage share ofglobal merchandise trade within the next five years.

y To act as an effective instrument ofeconomic growth by giving a thrust to employmentgeneration.

Strategy of Foreign Trade Policy of India -

y Removing government controls and creating an atmosphere of trust and transparency topromote entrepreneurship, industrialization and trades.

y Simplification of commercial and legal procedures and bringing down transaction costs.

y Simplification of levies and duties on inputs used in export products.

y

Facilitating development of India as a global hub for manufacturing, trading and services.y Generating additional employment opportunities, particularly in semi-urban and rural areas,and developing a series of Initiatives for each of these sectors.

y Facilitating technological and infrastructural upgradation of all the sectors of the Indianeconomy, especially through imports and thereby increasing value addition and productivity,while attaining global standards of quality.

y Neutralizing inverted duty structures and ensuring that India's domestic sectors are notdisadvantaged in the

y Free Trade Agreements / Regional Trade Agreements / Preferential Trade Agreements thatIndia enters into in order to enhance exports.

y Upgradation of infrastructural network, both physical and virtual, related to the entire Foreign

Trade chain, to global standards.y Revitalizing the Board of Trade by redefining its role, giving it due recognition and inductingforeign trade experts while drafting Trade Policy.

y Involving Indian Embassies as an important member of export strategy and linking all

commercial houses at international locations through an electronic platform for real time trade

intelligence, inquiry and information dissemination.


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Partnership -

Foreign Trade Policy of India foresees merchant exporters and manufacturer exporters,

business and industry as partners of Government in the achievement of its stated objectives and

goals.

Road ahead of Indian foreign trade policy -

This Foreign Trade Policy of India is a stepping stone for the development of Indias foreign

trade. It contains the basic principles and points the direction in which it propose to go. A trade

policy cannot be fully comprehensive in all its details it would naturally require modification

from time to time with changing dynamics of international trade.

FOREGIN TRADE POLICY OF 2004-05

Highlights

1. Strategy:

(a) It is for the first time that a comprehensive Foreign Trade Policy is being notified. The Foreign Trade

Policy takes an integrated view of the overall development of India's foreign trade.

(b) The objective of the Foreign Trade Policy is two-fold:

(i) to double India's percentage share of global merchandise trade by 2009; and

(ii) to act as an effective instrument of economic growth by giving a thrust to employment generation,

especially in semi-urban and rural areas.

(c) The key strategies are:

(i) Unshackling of controls;

(ii) Creating an atmosphere of trust and transparency;

(iii) Simplifying procedures and bringing down transaction costs;

(iv) Adopting the fundamental principle that duties and levies should not be exported;

(v) Identifying and nurturing different special focus areas to facilitate development of India as a globalhub for manufacturing, trading and services.

2. Special Focus Initiatives:

(a) Sectors with significant export prospects coupled with potential for employment generation in semi-

urban and rural areas have been identified as thrust sectors, and specific sectoral strategies have been


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prepared.

(b) Further sectoral initiatives in other sectors will be announced from time to time. For the present,

Special Focus Initiatives have been prepared for Agriculture, Handicrafts, Handlooms, Gems & Jewellery

and Leather & Footwear sectors.

(c) The threshold limit of designated 'Towns of Export Excellence' is reduced from Rs.1000 crores to

Rs.250 crores in these thrust sectors.

3. Package for Agriculture:

The Special Focus Initiative for Agriculture includes:

(a) A new scheme called Vishesh Krishi Upaj Yojana has been introduced to boost exports of fruits,

vegetables, flowers, minor forest produce and their value added products.

(b) Duty free import of capital goods under EPCG scheme.

(c) Capital goods imported under EPCG for agriculture permitted to be installed anywhere in the Agri

Export Zone.

(d) ASIDE funds to be utilized for development for Agri Export Zones also.

(e) Import of seeds, bulbs, tubers and planting material has been liberalized.

(f) Export of plant portions, derivatives and extracts has been liberalized with a view to promote export

of medicinal plants and herbal products.

4. Gems & Jewellery:

(a) Duty free import of consumables for metals other than gold and platinum allowed up to 2% of FOB

value of exports.

(b) Duty free re-import entitlement for rejected jewellery allowed up to 2% of FOB value of exports.

(c) Duty free import of commercial samples of jewellery increased to Rs.1 lakh.

(d) Import of gold of 18 carat and above shall be allowed under the replenishment scheme.

5. Handlooms & Handicrafts:

(a) Duty free import of trimmings and embellishments for Handlooms & Handicrafts sectors increased to


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5% of FOB value of exports.

(b) Import of trimmings and embellishments and samples shall be exempt from CVD.

(c) Handicraft Export Promotion Council authorised to import trimmings, embellishments and samples

for small manufacturers.

(d) A new Handicraft Special Economic Zone shall be established.

6. Leather & Footwear:

(a) Duty free entitlements of import trimmings, embellishments and footwear components for leather

industry increased to 3% of FOB value of exports.

(b) Duty free import of specified items for leather sector increased to 5% of FOB value of exports.

(c) Machinery and equipment for Effluent Treatment Plants for leather industry shall be exempt from

Customs Duty.

7. Export Promotion Schemes:

(a) Target Plus:

A new scheme to accelerate growth of exports called 'Target Plus' has been introduced.

Exporters who have achieved a quantum growth in exports would be entitled to for duty free credit

based on incremental exports substantially higher than the general actual export target fixed. (Since the

target fixed for 2004-05 is 16%, the lower limit of performance for qualifying for rewards is pegged at

20% for the current year).

Rewards will be granted based on a tiered approach. For incremental growth of over 20%, 25% and

100%, the duty free credits would be 5%, 10% and 15% of FOB value of incremental exports.

(b) Vishesh Krishi Upaj Yojana:

Another new scheme called Vishesh Krishi Upaj Yojana (Special Agricultural Produce Scheme) has been

introduced to boost exports of fruits, vegetables, flowers, minor forest produce and their value added

products.

Export of these products shall qualify for duty free credit entitlement equivalent to 5% of FOB value of

exports.


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The entitlement is freely transferable and can be used for import of a variety of inputs and goods.

(c) 'Served from India' Scheme:

To accelerate growth in export of services so as to create a powerful and unique 'Served from India'

brand instantly recognized and respected the world over, the earlier DFEC scheme for services has been

revamped and re-cast into the 'Served from India' scheme.

Individual service providers who earn foreign exchange of at least Rs.5 lakhs, and other service providers

who earn foreign exchange of at least Rs.10 lakhs will be eligible for a duty credit entitlement of 10% of

total foreign exchange earned by them.

In the case of stand-alone restaurants, the entitlement shall be 20%, whereas in the case of hotels, it

shall be 5%.

Hotels and Restaurants can use their duty credit entitlement for import of food items and alcoholic

beverages.

(d) EPCG:

(i) Additional flexibility for fulfillment of export obligation under EPCG scheme in order to reduce

difficulties of exporters of goods and services.

(ii) Technological upgradation under EPCG scheme has been facilitated and incentivised.

(iii) Transfer of capital goods to group companies and managed hotels now permitted under EPCG.

(iv) In case of movable capital goods in the service sector, the requirement of installation certificate

from Central Excise has been done away with.

(v) Export obligation for specified projects shall be calculated based on concessional duty permitted to

them. This would improve the viability of such projects.

(e) DFRC:

Import of fuel under DFRC entitlement shall be allowed to be transferred to marketing agencies

authorized by the Ministry of Petroleum and Natural Gas.

(f) DEPB:

The DEPB scheme would be continued until replaced by a new scheme to be drawn up in consultation

with exporters.


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8. New Status Holder Categorisation:

(a) A new rationalized scheme of categorization of status holders as Star Export Houses has been

introduced as under:

Category Total performance over

three years

One Star Export House 15 crores

Two Star Export House 100 crores

Three Star Export House 500 crores

Four Star Export House 1500 crores

Five Star Export House 5000 crores

(b) Star Export Houses shall be eligible for a number of privileges including fast-track clearance

procedures, exemption from furnishing of Bank Guarantee, eligibility for consideration under Target Plus

Scheme etc.

9. EOUs:

(a) EOUs shall be exempted from Service Tax in proportion to their exported goods and services.

(b) EOUs shall be permitted to retain 100% of export earnings in EEFC accounts.

(c) Income Tax benefits on plant and machinery shall be extended to DTA units which convert to EOUs.

(d) Import of capital goods shall be on self-certification basis for EOUs.

(e) For EOUs engaged in Textile & Garments manufacture leftover materials and fabrics upto 2% of CIF

value or quantity of import shall be allowed to be disposed of on payment of duty on transaction value

only.

(f) Minimum investment criteria shall not apply to Brass Hardware and Hand-made Jewellery EOUs (this

facility already exists for Handicrafts, Agriculture, Floriculture, Aquaculture, Animal Husbandry, IT and

Services).

10. Free Trade and Warehousing Zone:


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(i) A new scheme to establish Free Trade and Warehousing Zone has been introduced to create trade-

related infrastructure to facilitate the import and export of goods and services with freedom to carry out

trade transactions in free currency. This is aimed at making India into a global trading-hub.

(ii) FDI would be permitted up to 100% in the development and establishment of the zones and their

infrastructural facilities.

(iii) Each zone would have minimum outlay of Rs.100 crores and five lakh sq. mts. built up area.

(iv) Units in the FTWZs would qualify for all other benefits as applicable for SEZ units.

11. Services Export Promotion Council:

An exclusive Services Export Promotion Council shall be set up in order to map opportunities for key

services in key markets, and develop strategic market access programmes, including brand building, in

co-ordination with sectoral players and recognized nodal bodies of the services industry.

12. Common Facilities Centre:

Government shall promote the establishment of Common Facility Centres for use by home-based

service providers, particularly in areas like Engineering & Architectural design, Multi-media operations,

software developers etc., in State and District-level towns, to draw in a vast multitude of home-based

professionals into the services export arena.

13. Procedural Simplification & Rationalisation Measures:

(a) Import of second-hand capital goods shall be permitted without any age restrictions.

(b) Minimum depreciated value for plant and machinery to be re-located into India has been reduced

from Rs.50 crores to Rs.25 crores.

(c) All exporters with minimum turnover of Rs.5 crores and good track record shall be exempt from

furnishing Bank Guarantee in any of the schemes, so as to reduce their transactional costs.

(d) All goods and services exported, including those from DTA units, shall be exempt from Service Tax.

(e) Validity of all licences/entitlements issued under various schemes has been increased to a uniform

24 months.

(f) Number of returns and forms to be filed have been reduced. This process shall be continued in

consultation with Customs & Excise.


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(g) Enhanced delegation of powers to Zonal and Regional offices of DGFT for speedy and less

cumbersome disposal of matters.

(h) Time bound introduction of Electronic Data Interface (EDI) for export transactions. 75% of all export

transactions to be on EDI within six months.

14. Pragati Maidan:

In order to showcase our industrial and trade prowess to its best advantage and leverage existing

facilities, Pragati Maidan will be transformed into a world-class complex. There shall be state-of-the-art,

environmentally-controlled, visitor friendly exhibition areas and marts. A huge Convention Centre to

accommodate 10,000 delegates with flexible hall spaces, auditoria and meeting rooms with high-tech

equipment, as well as multi-level car parking for 9,000 vehicles will be developed within the envelope of

Pragati Maidan.

15. Legal Aid:

Financial assistance would be provided to deserving exporters, on the recommendation of Export

Promotion Councils, for meeting the costs of legal expenses connected with trade-related matters.

16. Grievance Redressal:

A new mechanism for grievance redressal has been formulated and put into place by a Government

Resolution to facilitate speedy redressal of grievances of trade and industry.

17. Quality Policy:

(a) DGFT shall be a business-driven, transparent, corporate oriented organization.

(b) Exporters can file digitally signed applications and use Electronic Fund Transfer Mechanism for

paying application fees.

(c) All DGFT offices shall be connected via a central server making application processing faster. DGFT

HQ has obtained ISO 9000 certification by standardizing and automating procedures.

18. Board of Trade:

The Board of Trade shall be revamped and given a clear and dynamic role. An eminent person or expert

on trade policy shall be nominated as President of the Board of Trade, which shall have a Secretariat and

separate Budget Head, and will be serviced by the Department of Commerce.


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FOREGIN TRADE POLICY OF 2005-06

On August 31, 2004 the Government spelt out a bold vision to double India's share in worldtrade within five years, and to focus on the generation of additional employment in the process.The current trade figures indicate that India is not only on the right path but approaching the goalat an accelerated pace.

India to be a major gainer from emerging global trends

In the fast changing international trading scenario, outsourcing of manufacturing activities in theskill intensive sectors has become an essential business strategy for the developed countries.India with its large skilled work force, growing domestic market, raw material availability andthe emergence of a mature supply base is set to gain enormously from this trend since the Indianadvantage goes well beyond the low wage rates. While there is no doubt that knowledge basedindustries such as information technology offer India a smooth route to world markets, greatpotential and opportunities exist in the manufacturing sector also.

FTP strategy is on the right track

When the five year Foreign Trade Policy was announced on August 31, 2004, the Governmenttook cognizance of the fact that a bold and clearly delineated approach was needed to tap suchopportunities. The Foreign Trade Policy articulated two basic objectives that would enable Indiato achieve these goals.

The first objective was doubling our percentage share of global merchandise trade within fiveyears. To achieve this, an average annual growth rate of about 16% was envisaged. TheDGCI&S trade statistics show that the actual growth of the merchandise trade in the very firstyear of the policy period has been of the order of 24%, which has far surpassed the target we setfor ourselves. This growth has been unprecedented in India's economic history, and if we canmaintain the momentum, the Government is confident that India will cross the 150 billion dollarmilestone substantially earlier than the target date.

FTP as a generator of employment

The second objective of the FTP was providing thrust to employment generation particularly insemi-urban and rural areas. The FTP announced special focus initiatives in the employmentintensive areas of agriculture, handicrafts, handlooms, gems & jewellery and leather & footwearsectors. The employment generation has been encouraging not only in these sectors, but in othersectors across the board. A study commissioned by the Ministry reveals that exports generated an

incremental direct employment of 10 lakh jobs in the year 2004-05, over the previous year. Thetotal employment generated during the year corresponding to export activity valued at 78 billionwas 1 crore jobs - 86 lakhs of direct employment, and 14 lakhs of indirect employment in thelogistics, transport and related sectors. The study further reveals that if we achieve our target of150 dollars over the next four years, we shall be adding a further 1 crore jobs: 85% of it directemployment, and 15% indirectly associated jobs.

A policy of partnership


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The FTP provided a road map that could help Indian companies become globally competitiveand simultaneously aimed at giving Indian consumers world class products and services. Specificsectoral initiatives have helped in creating more jobs, higher exports and an enhanced level ofconfidence for Indian products and services in the global economy.

I believe that it is the new equation of partnership and co-operation engendered by the FTP lastyear that has paid the rich dividends we are now encountering. Business and industry haveresponded remarkably.

Government is committed to resolving all outstanding problems and disputes pertaining to thepast policy periods through the Grievance Redressal Committee set up last year, for condoningdelays, regularizing breaches by exporters in bonafide cases, resolving disputes overentitlements, granting extensions for utilization of licences etc. The atmosphere of partnershipbetween Government and Business will be enhanced and taken forward.

Changing international trade dynamics

The dynamics of global trade and the opportunities provided by the multilateral trading platformnecessitate a continuous realignment of our international trade strategies and priorities. WhileIndia's international trade will continue to function under the overall framework of the ForeignTrade Policy 2004-09 announced on 31st August 2004, some fine-tuning needs to be done totake into account the changing international trade dynamics. This Annual Supplement endeavorsto incorporate additional policy initiatives and simplify procedures, thereby facilitating andenhancing India's international trade.

The specific initiatives undertaken in this Annual Supplement to the Foreign Trade Policy, 2004-09 are given in this compendium.

NEW DELHI KAMAL NATH

8th APRIL 2005MINISTER FOR COMMERCE & INDUSTRYGOVERNMENT OF INDIA

ANNUAL SUPPLEMENT TO THE FOREIGN TRADE POLICY 2004-09

In order to achieve our Foreign Trade Policy objective of becoming a major player in world

trade, a comprehensive view needs to be taken for the overall development of the country's

foreign trade. Coherence and consistency among trade and other economic policies of both theUnion and the State Governments is important for maximizing the contribution of such policies

to development. State Governments are increasingly required to partner with the Union

Government in the process.

Some States have formulated export policies recognizing the need to focus on the removal of

impediments in promoting trade, employment and economic activity. But a lot needs to be done


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to coordinate this.

It is therefore proposed to engage the State Governments in providing an enabling environment

for boosting international trade, by setting up an Inter State Trade Council. It is hoped that the

Council would provide an appropriate institutionalized dialogue mechanism on the subject.

2. REMOVAL OF EXPORT CESS

The Department of Commerce has taken a consistent stand from a policy perspective that taxes

and duties should not be exported. The cess levied under the different Commodity Board Acts is

a tax on exports, which is a handicap and a major irritant to our exporters and erodes the

competitiveness of Indian agriculture exports. Department of Commerce proposes to abolish cess

on export of all agricultural and plantation commodities levied under various Commodity Board

Acts.

3. EXPORT PROMOTION CAPITAL GOODS SCHEME

a. For providing a thrust to the Agricultural sector, concessional duty imports made by agro units

under the EPCG Scheme shall be allowed to fulfill the export obligation over a longer period of

time with a reduced export obligation i.e. 6 times the duty saved over a 12 year period instead of

the normal window of 8 times the duty saved in 8 years.

b. To promote capacity expansion and quality up-gradation in the SSI sector, import of capital

goods at 5% Customs duty shall now be allowed subject to a fulfillment of an export obligation

equivalent to 6 times the duty saved on capital goods imported under the EPCG Scheme over aperiod of 8 years. (At present the export obligation under the EPCG Scheme is 8 times the duty

saved and reducing the export obligation for small manufacturing units to 6 times shall provide

an impetus to industries to modernise their plant and machinery which will enhance our overall

export competitiveness in the medium term).

c. To create modern infrastructure in the retail sector, concessional duty benefits under EPCG

scheme shall be extended for import of capital goods required by retailers having a minimum

covered shopping area of 1000 sq metres. The retailer shall fulfill the export obligation under the

Scheme from payments received against 'counter sales' in free foreign exchange through banking

channels as per RBI guidelines.

d. With a view to accelerate exports under the Scheme and to incentivise fast track companies,

firms making 75 % or more of the exports under the EPCG Scheme (including average level of

exports) in half or less than half the original export obligation period, shall be freed from the

balance export obligation.


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e. Payment received in Rupees for the Port Handling services are counted for export obligation

discharge under the EPCG Scheme. This facility is now being extended to include minor ports

including ICDs and Container Freight Stations (CFS) also. This will enable augmentation of the

facilities available at the secondary ports with modern equipment and thereby reduce cargo

handling turnaround time and related transaction costs.

f. The present requirement of submitting an Installation Certificate for machinery imported under

EPCG Scheme will now not be required for units which are not registered with Central Excise.

In lieu of a Central Excise Certificate, a Chartered Engineer Certificate will now suffice. Firms

importing spares under EPCG shall also be required to submit a Chartered Engineer certificate

only instead of a certificate from Central Excise authorities.

g. The facility of clubbing of EPCG licences has been further liberalized and restrictive

conditions relating to same licensing year and same products/services have been deleted.Henceforth, all EPCG licences issued under the same Customs Notification can be clubbed. This

will considerably reduce paperwork both for the exporter and the licensing authorities and lead to

easier monitoring.

4. SERVICE EXPORTS

a. To enable the Service providers to upgrade the infrastructure in their associate companies, the

goods imported under the 'Served from India' Scheme shall be transferable within the Group

companies and managed hotels subject to Actual User condition.

b. At present, Hotels & Restaurants are required to submit a Chartered Accountant certificate that

the entire duty benefits availed under the 'Served from India' Scheme have been passed on to the

consumer. From now on, only a declaration will be submitted by the Hotels & Restaurants that

the duty benefits shall be passed on to the consumer and no CA certificate will be required to be

submitted.

5. AGRI EXPORTS

a. Benefits under 'Vishesh Krishi Upaj Yojana' shall also be extended to exports of poultry and

dairy products in addition to export of flowers, fruits, vegetables, minor forest produce and their

value added products.

b. Procedural guidelines for the Scheme have also been notified and the exporter has been given

the flexibility to obtain duty credit certificates in split form that will make utilization of the

licences easier.


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6. GEM AND JEWELLERY EXPORTS

a. Entitlement for Duty Free imports of Gems and Jewellery samples have been enhanced to Rs.

3 lakhs in a financial year or 0.25% of the average of the last three years exports turnover or

gems and jewellery items, whichever is lower. Earlier this limit was Rs. 1 lakh.

b. Supply of gold of 0.995 and above purity shall also be allowed for release by nominated

agencies for export purposes. Earlier this facility was only available for supply of gold in the

domestic market.

c. The notional rate for fixing the US $ rate for calculating gold jewellery exports shall now be

based on a certificate which is not older than 7 working days from the date of shipping. The

present provisions mandated that the notional rate certificate issued by the nominated agency

should not be older than 3 working days.

d. Exporters of plain/studded/precious metal jewellery will be allowed to import

plain/studded/precious metal jewellery (Gold jewellery of 18 carat and below/platinum and

sterling silver jewellery) for the purposes of exports.

7. PACKAGE FOR MARINE SECTOR

a. Duty free import of specified specialized inputs/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. Use of

these special ingredients for seafood processing will enable us to achieve a higher value additionand enter new export markets.

b. To encourage the existing mechanized vessels and deep sea trawlers to adopt modern

technology for scientific exploitation of our marine resources in an eco-friendly manner and

boost marine sector exports, it is proposed to allow import of monofilament long line system for

tuna fishing at a concessional rate of duty.

c. The present system of disposal of waste of perishable commodities like seafood after

inspection by a customs official is very cumbersome and leads to development of unhygienic

conditions. To overcome this, a self removal procedure for clearance of waste shall be

applicable, subject to prescribed wastage norms.

8. ADVANCE LICENSING SCHEME

a. No safeguard and antidumping duty shall be levied on inputs under Advance Licence for


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deemed export supplies made to ICB projects. With this different categories of Advance licences

i.e. advance licence for physical export, advance licence for intermediate supplies and advance

licence for deemed exports have been merged into a single category for procedural facilitation

and easier monitoring.

b. The scope of Advance Licence for Annual requirement has been extended to all categories of

exporters having past export performance. Earlier, the option was limited to Status Holders only.

The earlier limit of obtaining Advance Licence for Annual requirement has also been enhanced

to 300% of FOB/FOR value of exports made in the previous year from 200%.

c. Clubbing of advance licences for export regularization purpose has been allowed even for

licences pertaining to 1992-97 period.

d. Units registered under BIFR shall be allowed export obligation extension as per the

rehabilitation package or a period upto five years reckoned from the date of issuance of theadvance licence, whichever is higher.

e. Transfer of Duty Free material imported or procured under Advance Licence from one unit of

the company to another unit of the same company to be allowed with prior intimation to the

jurisdictional central excise authority. Earlier prior permission of the jurisdictional central excise

authority was required.

f. In cases the Bank Guarantee/LUT has been redeemed under the Advance licence, the Licensee

may be allowed to get duty free inputs processed from any manufacturer under actual user

condition subject to central excise procedures relating to job work.

g. Removal of requirement of ARO for taking supplies from EOU/EHTP/STP/BTP units and

allowing direct debit of the advance licence by the Bond Officer of these units. A detailed

procedure in this regard shall be prescribed by the CBEC.

9. DUTY FREE REPLENISHMENT CERTIFICATE

a. List of Sensitive Items has been pruned down to nine items. Brass scrap, Additives,

Paper/Paper Board and Dye Stuffs shall be removed from the Sensitive List of items prescribed

for import of items under DFRC.

b. Provision for re-credit on account of rejections of items imported under DFRC shall be similar

to the facility available to DEPB and Advance Licence. While allowing re-credit, 95% of the

value of the DFRC shall be credited.


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10. DEPB

DEPB benefits shall be available for supply of goods from DTA to SEZs for the period

1.04.2003 to 11.05.2004.

11. EXPORT ORIENTED UNITS

a. Duty free spares up to 5% of the value of Capital Goods imported for excavation purposes in

the Granite sector will be allowed to be removed to the quarries.

b. The de-bonding procedure for EOUs has been simplified. A self-assessment procedure along

with time bound disposal of applications of such exiting EOUs will be put in place.

c. Capital Goods will be allowed to be transferred or given on loan basis to other units under

intimation to both Excise and Development Commissioner.

d. Transfer of samples to other EOUs on returnable basis within a period of 30 days to be

allowed.

e. EOUs to be permitted to claim IT exemption in respect of income on export proceeds realised

within a period of 12 months from date of export.

12. TARGET PLUS SCHEME

a. The Target Plus Scheme aimed at rewarding incremental exports would continue in the year2005-06 with such modifications as will be notified, separately for preventing misuse, if any.

13. BANK GUARANTEE

Quantum of Bank Guarantee in respect of "Other Manufacturer Exporters" category is being

reduced from 25% to 15%. Units in Agri Export Zones (AEZs) shall also be eligible to submit a

Bank Guarantee of 15%. In addition, only a 15% Bank Guarantee shall be required for

'established service providers' who have free foreign exchange earnings of Rs.50 lakhs or more

during the preceding financial year and have a clean track record.

14. PROCEDURAL SIMPLIFICATION & REDUCTION OF TRANSACTION COSTS

Importers and exporters have to fill multiple application forms at various stages of their business

activity to meet the procedural requirements of different Departments/Ministries under different

Acts. It is our endeavor to simplify procedures and reduce the documentation requirements so as


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to reduce the transaction costs of the exporters and thereby increase their competitiveness in the

international markets. With this in mind, a Committee to look into procedural simplification and

reduction of transaction costs was set up under the Chairmanship of Director General of Foreign

Trade. The Committee has submitted its report and some of the key recommendations made are:

a. Internal process re-engineering to enable greater delegation and simplification of forms and

documents;

b. EDI linkage of all community trade partners like DGFT, Customs, Banks, Export Promotion

Councils etc to facilitate web based filing, retrieval and verification of documents;

c. A fast track mechanism for clearances, examination, testing, quarantine, packaging etc. to be

set up by all agencies to facilitate import/export of perishable cargo;

d. Laying down time limits for giving approvals/sanctions for different import and exportactivities by different agencies to ensure a transparent system of working in Government

Departments and ensure continuous improvement in quality of services rendered.

As a first step towards this exercise, the DGFT has devised a single common application form

called 'Aayaat Niryaat' Form. This 50 page set of forms, as against the 120 page set currently in

existence, provides availability of information on DGFT related documentation at a single place

and has a web interface for on-line filing by the exporter and retrieval of documents by the

licensing authorities.

15. EDI INITIATIVES

a. DGFT shall strive to move towards an automated electronic environment for filing, retrieval

and authentication of documents based on agreed protocols and message exchange with other

community trade partners including Customs and Banks. Increased use of information

technology for interacting with the trade through video conferencing, doing away with manual

filing of documents by using digital signature and introducing a Special Purpose Vehicle for

electronic license utilization and transfer mechanism is also envisaged. In addition, online web

based information shall be made available for all Export and Import related policies and

procedures on the DGFT website to enable the international trading community to access

information from a single source.

b. A time frame of six months for complete EDI linkage between Customs and DGFT has been

specified. After completion of this project the manual submission of shipping bills and related

documents will be done away with and verification of licences shall be done online which shall

considerably reduce transaction costs.


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c. Facility of issuing Importer Exporter Code number (IEC) online is also being provided by

linking the DGFT database with the Income Tax PAN database and use of digital signature

technology. To add transparency in the system, other e-governance initiatives are also being

planned to provide delivery of services to the user community without any human interface with

the DGFT offices.

16. TRADE FACILITATION

a. To enable the users to make commercial decisions in a more professional manner, DGCI&S

trade data shall be made available with minimum time lag in a query based structured format on

commercial criteria.

b. All DGFT offices shall continue to provide facilitation to exporters in regard to developments

in international trade i.e. WTO

agreements, Rules ofO

rigin and SPS requirements, anti dumpingissues etc. to help the exporters strategise their import and export decisions in an internationally

dynamic environment.

c. To promote export of 'Minor Forest Produce' products Shellac Export Promotion Council has

been designated as a nodal EPC for minor forest produce.

d. All EPCs shall open a separate Cell to involve and encourage youth and women entrepreneurs

in the export effort.

e. Handloom - Government has decided to develop a trademark for Handloom on lines similar to'Woolmark' and 'Silkmark'. This will enable handloom products to develop a niche market with a

distinct identity.

f. Tea - In order to maintain quality and retain the brand equity of Indian teas, the Government

has issued a new Tea (Distribution and Export) Control Order, 2005 which prescribes strict

norms for tea. All teas, whether imported or exported would be required to conform to the

specifications cited in the new Order. Tea has been classified for the purpose of issue of non-

preferential Certificate ofOrigin into three categories:

i. Tea wholly produced or obtained in India will only be classified as "India tea."

ii. Where the Indian tea content in the export is not less than 90% by weight, it will be classified

as "India tea (not less than 90% by weight of tea)".

iii. In case of tea not wholly produced or obtained in India and where the content of Indian tea is


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9.10 BOA means the Board of Approval as notified by theDepartment of Commerce.9.11 BTP means Biotechnology Park as notified by DirectorGeneral of Foreign Trade on the recommendation of theDepartment of Biotechnology.

9.12 Capital Goods means any plant, machinery, equipment oraccessories required for manufacture or production, eitherdirectly or indirectly, of goods or for rendering services,including those required for replacement, modernisation,technological upgradation or expansion. Capital goods alsoinclude packaging machinery and equipment, refractories forinitial lining, refrigeration equipment, power generating sets,machine tools, catalysts for initial charge, equipment andinstruments for testing, research and development, quality andpollution control. Capital goods may be for use inmanufacturing, mining, agriculture, aquaculture, animal

husbandry, floriculture, horticulture, pisciculture, poultry,sericulture and viticulture as well as for use in the servicessector.9.13 Competent Authority means an authority competent toexercise any power or to discharge any duty or function underthe Act or the Rules and Orders made thereunder or underthis Policy.9.14 Component means one of the parts of a sub-assembly orassembly of which a manufactured product is made up andinto which it may be resolved. A component includes anaccessory or attachment to the component.9.15 Consumables means any item, which participates in or isrequired for a manufacturing process, but does not necessarilyform part of the end-product. Items, which are substantiallyor totally consumed during a manufacturing process will bedeemed to be consumables.9.16 Consumer Goods means any consumption goods, whichcan directly satisfy human needs without further processingand includes consumer durables and accessories thereof.9.17 Counter Trade means any arrangement under which exports/imports from/to India are balanced either by direct imports/exports from the importing/exporting country or through athird country under a Trade Agreement or otherwise. Exports/Imports under Counter Trade may be carried out throughEscrow Account, Buy Back arrangements, Barter trade or anysimilar arrangement. The balancing of exports and importscould wholly or partly be in cash, goods and/or services.9.18 Developer means a person or body of persons, company,firm and such other private or government undertaking, whodevelops, builds, designs , organises, promotes, finances,


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operates, maintain or manages a part or whole of theinfrastructure and other facilities in the Special EconomicZones as approved by the Central Government.9.19 Development Commissioner means the DevelopmentCommissioner of the Special Economic Zone.

9.20 DFRC means Duty Free Replenishment Certificate.9.21 Domestic Tariff Area means area within India which isoutside the Special Economic Zones and EOU/ EHTP/ STP/BTP.9.22 Drawback, in relation to any goods manufactured in Indiaand exported, means the rebate of duty chargeable on anyimported material or excisable material used in themanufacture of such goods in India. The goods includeimported spares, if supplied with capital goods manufacturedin India.9.23 EHTP means Electronic Hardware Technology Park.

9.24 EO

U means ExportO

riented Unit for which an LO

P hasbeen issued by the Development Commissioner.9.25 Excisable goods means any goods produced ormanufactured in India and subject to a duty of excise underthe Central Excise and Salt Act 1944 (1 of 1944).9.26 Exporter means a person who exports or intends to exportand holds an Importer-Exporter Code number unless otherwisespecifically exempted.9.27 Export Obligation means the obligation to export the productor products covered by the Authorisation or permission interms of quantity, value or both, as may be prescribed orspecified by the licensing or competent authority.9.28 Group Company means two or more enterprises which,directly or indirectly, are in a position to (i) exercise twenty-six per cent. or more of the votingrights in the other enterprise; or(ii) appoint more than fifty percent, of the members ofthe board of directors in the other enterprise.

For the group companies to claim benefits or have their exportscounted for benefits to be claimed by another member of thegroup, the group company should have been in existenceatleast 2 years prior to the date of application under any of theexport promotion schemes notified in the Policy.9.29 Handbook (Vol.1)means the Handbook of Procedures(Vol.1) and Handbook (Vol.2) means Handbook ofProcedures (Vol.2) published under the provisions ofparagraph 2.4 of the Policy.9.30 Importer means a person who imports or intends to importand holds an Importer-Exporter Code number unless otherwisespecifically exempted.


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9.31 Infrastructure facilities means industrial, commercial andsocial infrastructure or any other facility for the developmentof the Special Economic Zone as notified.9.32 ITC(HS) means ITC(HS) Classifications of Export andImport Items Book.

9.33 Jobbing means processing or working upon of raw materialsor semi-finished goods supplied to the job worker so as tocomplete a part of the process resulting in the manufacture orfinishing of an article or any operation which is essential forthe aforesaid process.9.34 Licensing Authority means the authority competent to grantan Authorisation under the Act/Order.9.35 Licensing Year means the period beginning on the 1st Aprilof a year and ending on the 31st March of the following year.9.36 Managed Hotel means hotels managed by a three star orabove hotel/ hotel chain under an operating management

contract for a duration of atleast three years between theoperating hotel/ hotel chain and the hotel being managed. Themanagement contract must necessarily cover the entire gamutof operations/ management of the managed hotel.9.37 Manufacture means to make, produce, fabricate,assemble, process or bring into existence, by hand or bymachine, a new product having a distinctive name,character or use and shall include processes such asrefrigeration, re-packing, polishing, labelling. Reconditioningrepair, remaking, refurbishing, testing,calibration, re-engineering. Manufacture, for the purposeof this Policy, shall also include agriculture, aquaculture,animal husbandry, floriculture, horticulture, pisciculture,poultry, sericulture, viticulture and mining.

9.38 Manufacturer Exporter means a person who export goodsmanufactured by him or intends to export such goods.9.39 MAI means Market Access Initiative Scheme notified bythe Department of Commerce9.40 Merchant Exporter means a person engaged in tradingactivity and exporting or intending to export goods.9.40.1 NC means the Norms Committee in the Directorate General

of Foreign Trade for recommending grant of Authorisationsunder Duty Exemption Scheme and for recommending Input

Output norms and value addition norms to be notified byDirector General of Foreign Trade.9.41 NFE means Net Foreign Exchange Earning.9.42 Notification means a notification published in the OfficialGazette.9.43 Order means an Order made by the Central Government


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under the Act.9.44 Part means an element of a sub-assembly or assembly notnormally useful by itself and not amenable to furtherdisassembly for maintenance purposes. A part may be acomponent, spare or an accessory.

9.45 Person includes an individual, firm, society, company,corporation or any other legal person.9.46 Policy means the Foreign Trade Policy 2004-2009 asamended from time to time.9.47 Prescribed means prescribed under the Foreign Trade(Development and Regulation) Act, 1992 (No. 22 of 1992) orthe Rules orOrders made thereunder or under this Policy.9.48 Public Notice means a notice published under the provisionsof paragraph 2.4 of the Policy.9.49 Raw material means:(i) basic materials which are needed for the

manufacture of goods, but which are still in a raw,natural, unrefined or unmanufactured state; and(ii) for a manufacturer, any materials or goods whichare required for his manufacturing process, whetherthey have actually been previously manufacturedor are processed or are still in a raw or natural state.

9.50 Registration-Cum-Membership Certificate (RCMC) meansthe certificate of registration and membership granted by anExport Promotion Council/ Commodity Board/ DevelopmentAuthority or other competent authority as prescribed in thePolicy or Handbook (Vol.1).9.51 Rules means Rules made by the Central Government underSection 19 of the Act.9.52 Services include all the tradable services covered underGeneral Agreement on Trade in Services and earning freeforeign exchange.9.53 Service Provider means a person providing(i) Supply of a service from India to any othercountry;(ii) Supply of a service from India to the serviceconsumer of any other country in India; and(iii) Supply of a service from India through commercialor physical presence in the territory of any othercountry.(iv) Supply of a service in India relating to exportspaid in free foreign exchange or in Indian Rupeeswhich are otherwise considered as having being paidfor in free foreign exchange by RBI.9.54 SEZ means Special Economic Zone notified by the Ministryof Commerce & Industry, Department of Commerce.


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9.55 Ships mean all types of vessels used for sea borne trade orcoastal trade and shall include second hand vessels.9.56 SION means Standard Input Output Norms notified byDGFT in the Handbook (Vol.2), 2002-07/approved by Boardof Approval.

9.57 Spares means a part or a sub-assembly or assembly forsubstitution, that is ready to replace an identical or similarpart or sub-assembly or assembly. Spares include a componentor an accessory.9.58 Specified means specified by or under the provisions ofthis Policy.9.59 Status holder means an exporter recognized as One to FiveStar Export House by DGFT/ Development Commissioner.89

9.60 STP means Software Technology Park9.61 Supporting Manufacturer means any person whomanufactures any product or part/ accessories/ componentsof that product. The name of the supporting manufacturer aswell as the exporter must be endorsed on the exportdocuments.9.62 Third-party exports means exports made by an exporter ormanufacturer on behalf of another exporter(s). In such cases,export documents such as shipping bills etc shall indicate thename of both the manufacturing exporter/manufacturer andthird party exporter(s). The BRC, GR declaration, export orderand the invoice should be in the name of the third partyexporter.9.63 Transaction Value as defined in the Customs Valuation Rulesof the Department of Revenue.9.64 Unit Approval Committee means the Committee notifiedfor Special Economic Zones to consider proposals on mattersrelating to Special Economic Zone unit under its jurisdiction.9.65 Wild Animal means any wild animal as defined in Section2(36) of the Wildlife (Protection) Act, 1972.

FOREIGN TRADE POLICY 2009-14

FOREWORDThe UPA Government has assumed office at a challengingtime when the entire world is facing an unprecedented economicslow-down. The year 2009 is witnessing one of the most severeglobal recessions in the post-war period. Countries across theworld have been affected in varying degrees and all majoreconomic indicators of industrial production, trade, capitalflows, unemployment, per capita investment and consumption


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have taken a hit. The WTO estimates project a grim forecastthat global trade is likely to decline by 9% in volume termsand the IMF estimates project a decline of over 11%. Therecessionary trend has huge social implications. The WorldBank estimate suggests that 53 million more people would fall

into the poverty net this year and over a billion people wouldgo chronically hungry.Though India has not been affected to the same extent asother economies of the world, yet our exports have suffered adecline in the last 10 months due to a contraction in demand in thetraditional markets of our exports

In the last five years our exports witnessed robust growthto reach a level of US$ 168 billion in 2008-09 from US$ 63billion in 2003-04. Our share of global merchandise trade was

0.83% in 2003; it rose to 1.45% in 2008 as per WTO estimates.Our share of global commercial services export was 1.4% in2003; it rose to 2.8% in 2008. Indias total share in goods andservices trade was 0.92% in 2003; it increased to 1.64% in2008. On the employment front, studies have suggested thatnearly 14 million jobs were created directly or indirectly as aresult of augmented exports in the last five years.

HIGHLIGHTS

OF

FOREIGN TRADE POLICY 2009-2014Higher Support for Market and Product Diversification

1. Incentive schemes under Chapter 3 have been expandedby way of addition of new products and markets.2. 26 new markets have been added under Focus MarketScheme. These include 16 new markets in Latin Americaand 10 in Asia-Oceania.3. The incentive available under Focus Market Scheme(FMS) has been raised from 2.5% to 3%.4. The incentive available under Focus Product Scheme(FPS) has been raised from 1.25% to 2%.

5. A large number of products from various sectors havebeen included for benefits under FPS. These include,Engineering products (agricultural machinery, partsof trailers, sewing machines, hand tools, garden tools,musical instruments, clocks and watches, railwaylocomotives etc.), Plastic (value added products), Juteand Sisal products, Technical Textiles, Green Technology


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products (wind mills, wind turbines, electric operatedvehicles etc.), Project goods, vegetable textiles andcertain Electronic items.6. Market Linked Focus Product Scheme (MLFPS) hasbeen greatly expanded by inclusion of products classified

under as many as 153 ITC(HS) Codes at 4 digit level.Some major products include; Pharmaceuticals, Synthetictextile fabrics, value added rubber products, value addedplastic goods, textile madeups, knitted and crochetedfabrics, glass products, certain iron and steel productsand certain articles of aluminium among others. Benefitsto these products will be provided, if exports are made to13 identified markets (Algeria, Egypt, Kenya, Nigeria,South Africa, Tanzania, Brazil, Mexico, Ukraine,Vietnam, Cambodia, Australia and New Zealand).

7. MLFPS benefits also extended for export to additionalnew markets for certain products. These products includeauto components, motor cars, bicycle and its parts, andapparels among others.8. A common simplified application form has beenintroduced for taking benefits under FPS, FMS, MLFPSand VKGUY.9. Higher allocation for Market Development Assistance(MDA) and Market Access Initiative (MAI) schemes isbeing provided.

Technological Upgradation10. To aid technological upgradation of our export sector,EPCG Scheme at Zero Duty has been introduced. ThisScheme will be available for engineering & electronicproducts, basic chemicals & pharmaceuticals, apparels &textiles, plastics, handicrafts, chemicals & allied productsand leather & leather products (subject to exclusions ofcurrent beneficiaries under Technological Upgradation10

Fund Schemes (TUFS), administered by Ministry ofTextiles and beneficiaries of Status Holder IncentiveScheme in that particular year). The scheme shall be inoperation till 31.3.2011.11. Jaipur, Srinagar and Anantnag have been recognised asTowns of Export Excellence for handicrafts; Kanpur,Dewas and Ambur have been recognised as Towns ofExport Excellence for leather products; and Malihabadfor horticultural products.


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EPCG Scheme Relaxations

12. To increase the life of existing plant and machinery,export obligation on import of spares, moulds etc. underEPCG Scheme has been reduced to 50% of the normalspecific export obligation.

13. Taking into account the decline in exports, the facility ofRe-fixation of Annual Average Export Obligationfor a particular financial year in which thereis decline in exports from the country, hasbeen extended for the 5 year Policy period2009-14.Support for Green products and products from North

East

14. Focus Product Scheme benefit extended for export ofgreen products; and for exports of some products

originating from the North East.Status Holders

15. To accelerate exports and encourage technological11

upgradation, additional Duty Credit Scrips shall be givento Status Holders @ 1% of the FOB value of past exports.The duty credit scrips can be used for procurement ofcapital goods with Actual User condition. This facilityshall be available for sectors of leather (excluding finishedleather), textiles and jute, handicrafts, engineering

(excluding Iron & steel & non-ferrous metals in primaryand intermediate form, automobiles & two wheelers,nuclear reactors & parts, and ships, boats and floatingstructures), plastics and basic chemicals (excludingpharma products) [subject to exclusions of currentbeneficiaries under Technological Upgradation FundSchemes (TUFS)]. This facility shall be available upto31.3.2011.16. Transferability for the Duty Credit scrips being issuedto Status Holders under paragraph 3.8.6 of FTP underVKGUY Scheme has been permitted. This is subject tothe condition that transfer would be only to Status Holdersand Scrips would be utilized for the procurement of ColdChain equipment(s) only.Stability/ continuity of the Foreign Trade Policy

17. To impart stability to the Policy regime, Duty EntitlementPassbook (DEPB) Scheme is extended beyond 31-12-2009 till 31.12.2010.


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18. Interest subvention of 2% for pre-shipment credit for 7specified sectors has been extended till 31.3.2010 in theBudget 2009-10.19. Income Tax exemption to 100% EOUs and to STPI unitsunder Section 10B and 10A of Income Tax Act, has been

12extended for the financial year 2010-11 in the Budget2009-10.20 The adjustment assistance scheme initiated in December,2008 to provide enhanced ECGC cover at 95%, to theadversely affected sectors, is continued till March, 2010.Marine sector

21. Fisheries have been included in the sectors which areexempted from maintenance of average EO under EPCGScheme, subject to the condition that Fishing Trawlers,

boats, ships and other similar items shall not be allowedto be imported under this provision. This would providea fillip to the marine sector which has been affected bythe present downturn in exports.22. Additional flexibility under Target Plus Scheme (TPS) /Duty Free Certificate of Entitlement (DFCE) Scheme forStatus Holders has been given to Marine sector.Gems & Jewellery Sector

23. To neutralize duty incidence on gold Jewellery exports, ithas now been decided to allow Duty Drawback on such

exports.24. In an endeavour to make India a diamond internationaltrading hub, it is planned to establish Diamond Bourse(s).25. A new facility to allow import on consignment basis ofcut & polished diamonds for the purpose of grading/certification purposes has been introduced.26. To promote export of Gems & Jewellery products, the13value limits of personal carriage have been increased fromUS$ 2 million to US$ 5 million in case of participation

in overseas exhibitions. The limit in case of personalcarriage, as samples, for export promotion tours, has alsobeen increased from US$ 0.1 million to US$ 1 million.Agriculture Sector

27. To reduce transaction and handling costs, a single windowsystem to facilitate export of perishable agriculturalproduce has been introduced. The system will involve


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creation of multi-functional nodal agencies to beaccredited by APEDA.Leather Sector

28. Leather sector shall be allowed re-export of unsoldimported raw hides and skins and semi finished leather

from public bonded ware houses, subject to payment of50% of the applicable export duty.29. Enhancement of FPS rate to 2%, would also significantlybenefit the leather sector.Tea

30. Minimum value addition under advance authorisationscheme for export of tea has been reduced from theexisting 100% to 50%.31. DTA sale limit of instant tea by EOU units has beenincreased from the existing 30% to 50%.

32. Export of tea has been covered under VKGUY Schemebenefits.14Pharmaceutical Sector

33. Export Obligation Period for advance authorizationsissued with 6-APA as input has been increased from theexisting 6 months to 36 months, as is available for otherproducts.34. Pharma sector extensively covered under MLFPS forcountries in Africa and Latin America; some countries in

Oceania and Far East.Handloom Sector35. To simplify claims under FPS, requirement of HandloomMark for availing benefits under FPS has beenremoved.EOUs

36. EOUs have been allowed to sell products manufacturedby them in DTA upto a limit of 90% instead of existing75%, without changing the criteria of similar goods,within the overall entitlement of 50% for DTA sale.37. To provide clarity to the customs field formations, DORshall issue a clarification to enable procurement of sparesbeyond 5% by granite sector EOUs.38. EOUs will now be allowed to procure finished goodsfor consolidation along with their manufactured goods,subject to certain safeguards.39. During this period of downturn, Board of Approvals(BOA) to consider, extension of block period by one


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year for calculation of Net Foreign Exchange earning ofEOUs.1540. EOUs will now be allowed CENVAT Credit facility forthe component of SAD and Education Cess on DTA

sale.Thrust to Value Added Manufacturing

41. To encourage Value Added Manufactured export, aminimum 15% value addition on imported inputsunder Advance Authorization Scheme has now beenprescribed.42. Coverage of Project Exports and a large number ofmanufactured goods under FPS and MLFPS.DEPB

43. DEPB rate shall also include factoring of custom duty

component on fuel where fuel is allowed as a consumablein Standard Input-Output Norms.Flexibility provided to exporters

44. Payment of customs duty for Export Obligation (EO)shortfall under Advance Authorisation / DFIA / EPCG

Authorisation has been allowed by way of debit of DutyCredit scrips. Earlier the payment was allowed in cashonly.45. Import of restricted items, as replenishment, shall nowbe allowed against transferred DFIAs, in line with the

erstwhile DFRC scheme.46. Time limit of 60 days for re-import of exported gems andjewellery items, for participation in exhibitions has beenextended to 90 days in case of USA.1647. Transit loss claims received from private approvedinsurance companies in India will now be allowed forthe purpose of EO fulfillment under Export Promotionschemes. At present, the facility has been limited topublic sector general insurance companies only.Waiver of Incentives Recovery, On RBI Specific Write off

48. In cases, where RBI specifically writes off the exportproceeds realization, the incentives under the FTP shallnow not be recovered from the exporters subject to certainconditions.Simplification of Procedures

49. To facilitate duty free import of samples by exporters,number of samples/pieces has been increased from the


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Preamble 1.1

The Preamble spells out the broad framework and is an integral part of the Foreign Trade Policy.

Duration 1.2

In exercise of the powers conferred under Section 5 of The Foreign Trade (Development andRegulation Act), 1992 (No. 22 of 1992), the Central Government hereby notifies the ForeignTrade Policy for the period 2004-2009 incorporating the Export and Import Policy for the period2002-2007, as modified. This Policy shall come into force with effect from 1st September, 2004and shall remain in force upto 31st March, 2009, unless as otherwise specified.

Amendments 1.3

The Central Government reserves the right in public interest to make any amendments to thisPolicy in exercise of the powers conferred by Section-5 of the Act. Such amendment shall be

made by means of a Notification published in the Gazette of India.

Transitional Arrangements 1.4

Any Notifications made or Public Notices issued or anything done under the previous Export/Import policies, and in force immediately before the commencement of this Policy shall, in so faras they are not inconsistent with the provisions of this Policy, continue to be in force and shall bedeemed to have been made, issued or done under this Policy.

Licences, certificates and permissions issued before the commencement of this Policy shallcontinue to be valid for the purpose and duration for which such licence, certificate or permission

was issued unless otherwise stipulated.

1.5

In case an export or import that is permitted freely under this Policy is subsequently subjected toany restriction or regulation, such export or import will ordinarily be permitted notwithstandingsuch restriction or regulation, unless otherwise stipulated, provided that the shipment of theexport or import is made within the original validity of an irrevocable letter of credit establishedbefore the date of imposition of such restriction.

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