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Transcript of 46308973-Exim-Policy-2004-2009-Ppt (1)
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EXIM POLICY 2004-2009
Presented By:
ABDU RAHIMAN
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Exim Policy
The foreign trade of India is guided by the Export-Importpolicy of the Government of India
Exim policy contain various policy decisions with respectto import and exports from the country
Exim Policy is prepared and announced by the centralgovernment
Exim Policy of India aims to developing export potential,improving export performance, encouraging foreign tradeand creating favorable balance of payment position
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EXIM Policy of India
2004-2009 Hon. Shri Kamal Nath minister for commerce and
industry has announced on 31st Aug 2004, Indias first
Exim policy.
The duration of the policy from 1st Sept. 2004 to 31st
March 2009.
It takes an integrated view of the overall development
of Indias foreign trade.
Aim of the policy is to double the global merchandise
trade within the policy time period of 5 years
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Two Major Objectives
Objectives
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General Objectives of Exim Policy
To establish the framework for globalization.
To promote the productivity competitiveness ofIndian Industry.
To Encourage the attainment of high andinternationally accepted standards of quality.
To augment export by facilitating access to rawmaterial, intermediate, components, consumables
and capital goods from the international market.To promote internationally competitive import
substitution and self-reliance.
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Key Strategies to achieve these
objectives
Unshackling of controls
Simplifying Procedures
Neutralizing Incidence
Facilitating development of India
Identifying special focus areas
Facilitating technological upgradation
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Key Strategies cont.
Facilitating technological upgradation
Avoiding inverted duty structure
Upgrading the Infrastructure
Revitalizing the Board of Trade
Activating Indian Embassies
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Special Focus Initiative:
a) Sectors with significant export prospects
b) Further sectoral initiatives
c) The threshold limit of Towns of Export
Excellence is reduced
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Provisions of NewExim Policy
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AgriculturalSector:
Agriculture has the potential to bringprosperity in rural areas, and also has thelargest potential for promoting employment.Some special provisions for the agriculturalsector under the EXIM policy are as follows:
a) Vishesh Krishi Upaj Yojana
b) Import of Capital Goodsc) Agri Export Zones
d) Import of seeds
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Gems and Jewellery
Industry:To provide employment among artisans and
to develop their skills, special package has
been announced for this sector. Some ofthem are:
a) Duty Free Import
b) Commercial Samples
c) Import of gold
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Handloom and Handicraft
Sector:Increased exports from this sector willbenefit the workers at grass root level.
a) Handicraft Export Promotion Councilb) Leather and footwear industry
c) Towns of Export Excellence
d) Status holder exportere) Vishesh Krishi Upaj and Gram Udyog
Yojana
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Leather & Footwear:
Duty free entitlements of import trimmings,
embellishments and footwear components for
leather industry increased to 3% of FOB value ofexports.
Duty free import of specified items for leather
sector increased to 5% of FOB value of exports.
Machinery and equipment for Effluent TreatmentPlants for leather industry shall be exempt from
Customs Duty.
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New Export Promotion
Schemes:A new scheme to accelerate growth of exports called Target
plus has been introduced. Under the scheme exporters who exceed theannual export target were to be rewarded under the Target Plusscheme. This reward was in terms entitlement to duty-free credit based
on incremental export earnings.
Special Schemes for Export Promotion:
Vishesh Krishi Upaj and Gram Udyog Yojna
Target Plus
Focus Product and Focus Market Scheme
Served from India
Duty-Entitlement Pass Book Scheme Duty-Free Import Authorisation Scheme
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SEZ (Special economic zone):
A scheme for setting up special economic zones(Sezs)in the country topromote exports was announced by the government in the export andImport Policy on March 31st , 2000. During 2006-07, exports fromfunctioning Sezs were Rs. 34,615 crores.
Main Objectives of SEZs Act:
Generation of additional economic activity
Promotion of exports of goods and services
Promotion of investments from Domestic and Foreign sources
Creation of employment opportunities and
Development of infrastructure facilities
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Star Export Houses:
A Star Export House was entitled to get license, certificate, permissionand customs clearances for both import and exports on self declarationbasis. The FTP announced a new categorization of status holders.Under new scheme, Export House were divided into five categories
depending upon their export performance in three years:
The categories were:
One Star (export of Rs 15 crores)
Two Star (export of Rs 100 crores)
Three Star (exportof Rs 500 crores)
Four Star (export of Rs.1500 crores) Five Star (export of Rs 5000 crores)
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Free Trade & Warehousing
Zones (FTWZ):Objective:
The objective is to create trade-related infrastructure to facilitate the importand export of goods and services with freedom to carry out trade transactionsin free currency. The scheme envisages creation of world-class infrastructurefor warehousing of various products, state-of-the-art equipment,transportation, handling facilities etc.
The Free Trade & Warehousing Zones (FTWZ) shall be a special category ofSpecial Economic Zones with a focus on trading and warehousing
Functioning:
The scheme envisages duty free import of all goods
Such goods shall be permitted to be re-sold.
Payment of duty will become due only when goods are sold. Packing or re-packing without processing and labelling as per customer or
marketing requirements could be undertaken within the FTWZ.
The maximum period that goods shall be permitted to be warehoused withinthe FTWZ will be two years.
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Export oriented units (EOUs):
(a) EOUs shall be exempted from Service Tax inproportion to their exported goods and services.
(b) EOU
s shall be permitted to retain 100% of exportearnings in EEFC accounts.
(c) Income Tax benefits on plant and machineryshall be extended to DTA units which convert to
EOUs.(d) Import of capital goods shall be on self-
certification basis for EOUs.
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ProceduralSimplification
Bank Gurantee
Second-hand-capital goods
Validity of all lincences
No. of Returns and forms has been
simplified
Redressal of grievances
Physical examination of export cargo
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Board of Trade:
The role is to advising government on relevant
issues connected with Foreign Trade Policy. The
Board of Trade shall be revamped and given aclear 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 BudgetHead, and will be serviced by the Department of
Commerce.
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Other Provisions:
Pragati Maidan
Convention centerFree Trade agreement
Service Export Promotion Council
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Implications of The Foreign
Trade 2004-09
Implications
on Indian
Economy
ImplicationsImplicationsonon
AgricultureAgriculture
ImplicationsImplications
on Handloomson Handlooms
and Handicraftand Handicraft
ImplicationsImplicationson Gem andon Gem and
JewelleryJewellery
SectorSector
ImplicationsImplicationson Leatheron Leather
and Footwearand Footwear
IndustryIndustry
ImplicationsImplicationson Serviceon Service
IndustryIndustry
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Annual Supplement to Foreign
Trade Policy 2004-09Shri Kamal Nath, Minister for Commerce
& Industry, Government of India
announced Annual Supplement 2008, to theForeign Trade Policy 2004-09 on the 11th
April 2008.
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Highlights of Supplement
DUTY ENTITLEMENT PASSBOOK
SCHEME (DEPB)
REFUND OF SERVICE TAX
INCOME TAX ON EOUs
SECTORAL INITIATIVES
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PROMOTION OF HIGH VALUE
ADDED MANUFACTURED PRODUCTS
EXPORT PROMOTION CAPITAL
GOODS SCHEME (EPCG)
FOCUS MARKET & PRODUCT SCHEMES
Highlights of Supplement cont
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Thus from the supplement, I am pleased to
say that our achievements have exceeded
our expectations. Not only have we fulfilledour promises in substantial measure, but we
have achieved these remarkable results in
just four years, instead of five.
Supplement in gist
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Supplement Cont.
In 2004 our exports stood at a little overUS $ 63 billion.
In 2007-08, they have exceeded US $ 155 billion;
our exports are not just double what they were 4 years ago,
but 2 times that. We have managed an averagecumulative annual growth rate (CAGR) of 23%,
year on year, way ahead of the average
growth rate of international trade.
The task is difficult, but the prize is great.
If we achieve it, India will once more become
the trading superpower it was two centuries ago
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Evaluation of EXIM Policy
Means to boost economic growth
Employment-Generation
Towns of Export-Excellence
Export of services
Setting up ofFree Trade and WarehousingZones
Import of Second-hand Capital Goods
MERITS
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Evaluation Cont..
Setting up of Special Economic Zones-SEZs
Procedural Simplification
Boost for Small, Cottage and Handicraft
Industries
Boost for Agriculture Sector
More Incentives for Higher Growth Rate inExports
Diversification of Exports
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Evaluation Cont.
Liberal Imports
Encouragement to Gems and Jewellery
Setting up of Bio-Tech-Parks
Income tax concessions and exemptions.
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Evaluation Cont.
Burden of export promotion schemes
Danger of circular trading
Risk of importing outdated machinery
Policy fails to take a holistic view of
trade
DEMERITS
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Negative List of Exports 2002-07
The negative list consists of goods, the
import or export of which is ether
prohibited, restricted through licensing orotherwise to be canalized through a
designate government agency.
The negative list of exports, as per theEXIM Policy 2002-07
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Negative List Cont
Prohibited Items : Which items completely banned fromthe exports.
All forms of wild animals including their parts and
products. Special Chemicals as notified by the DGFT.
Exotic birds as notified by the DGFT.
Beef.
Sea Shells, as specified
Human Skeleton. Peacock Tail
Red sanders wood in any form.
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Negative list cont
Restricted Items : which items allowed for exportsunder special license issued by the DGFT.
Dress materials, ready-made garments, fabrics or textile
items with imprints of excerpts or verses of the HolyQuran.
Horses Kathiawadi, Marwari, and Manipuri breeds.
Fresh and frozen silver prom frets of weight less than300gm.
Paddy (Rice in husk). Seaweeds of all types.
Chemical Fertilizer all types.
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What is new in new FTP of
Govt. Of India ?
This policy comes at a time when Indias
foreign trade is growing robustly.
The FTP hopes to double the countrys percentage
share of global trade within next five years
and also generate substantial employment.
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The government will rely on
some established strategies like:
i) loosen controls and create an atmosphere of trust,
ii) simplify procedure and reduce transaction costs
iii) neutralize the incidents of levies andduties on inputs used in export products,
iv) facilitate technological and infrastructural
upgradation in all the sectors of the company.
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Whats new? Cont.
The new initiatives announced foragricultural and other thrust areas such
as handicrafts, handlooms, gem andjewellery and leather and footwear andcommendable. But the promotionalsteps proposed are not exactly original;
they involve a liberal import of capitalgoods and raw materials to aid exporteffort.
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Conclusion:
The EXIM Policy 2004-2009 is one of the most ambitious policies ofthe government to liberalise the Indian economy and the governmenthas also come a long way in achieving the same. However the currentpolicy also has its flaws which are not only because lack of radical
thinking by the government but also because of the global scenario.Some of the flaws are as follows:
i) No concrete solution o reduce delays and transaction costs.
ii) Software Technology Parks of India not given income tax exemption.
iii) Poor export in growth, in rupee terms, and in volume terms, ignored.
iv) The rising crude oil prices and inflationary pressures in the economy.
v) Due to global economic slowdown and recession in the USA economy,Indias largest trading partner, uncertainty of the rupee-dollar exchangerate continues which in turn affects the economy.
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References:
http://www.eximkey.com
http://www.eximinfo.com
http://www.eximbankindia.in/
http://exim.indiamart.com/index.html
http://dgft.gov.in
http://finmin.nic.in/
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Thank You