Discussion On Foreign Trade Development Act, Duty drawback and other trade incentives

Presented By Team -7:

Vishal Agarwal 01Karan Mehta 15Neeta Pai 18Kavita Shetty 27Kishori Sawant 38

Contents

• Introduction• Exim policy ,objectives• General provisions regarding export import• India's Foreign Trade policy 2009-2014• Export Promotion Measures• Reward / Incentive Schemes in DGFT• Duty Exemption & Remission Schemes• Export Promotion Capital Goods (EPCG) Scheme• Special Focus Initiatives• Export and Trading Houses• Deemed Exports

Introduction

•Export

•Import

•Balance Of Trade

•Balance Of Payments

India's Exports, Imports, and Balance of Trade from 2000-2010

  VALUE IN Rs.'00 Crores Percentage Growth

Year Exports Imports Balance Of Trade Exports Imports Balance Of Trade

2000-01 2035.71 2308.73 -273.02 27.58 7.26 -50.96

2001-02 2090.18 2452 -361.82 2.68 6.21 32.53

2002-03 2551.37 2972.06 -420.69 22.06 21.21 16.27

2003-04 2933.67 3591.08 -657.41 14.98 20.83 56.27

2004-05 3753.4 5010.65 -1257.25 27.94 39.53 91.24

2005-06 4564.18 6604.09 -2039.91 21.6 31.8 62.25

2006-07 5717.79 8405.06 -2687.27 25.28 27.27 31.73

2007-08 6558.64 10123.12 -3564.48 14.71 20.44 32.64

2008-09 8407.55 13744.36 -5336.8 28.19 35.77 49.72

2009-10 8455.34 13637.36 -5182.02 0.57 -0.78 -2.9

Source:http://www.dgciskol.nic.in/annualreport/book_3e.pdf

India's Exports, Imports, and Balance of Trade from 2000-2010

Source:http://www.dgciskol.nic.in/annualreport/book_3e.pdf

Exim Policy and Its Objectives

•It contains policies in the sphere of Foreign trade.

Objectives

•Globalization•Sustained economic growth•Improving Technology•International Standards•Quality Products

General provisions regarding export import

• Exports and Imports free unless regulated • Compliance with Laws • Interpretation of Policy • Procedure:• Exemption from Policy/ Procedure • Principles of Restriction • Restricted Goods • Terms and Conditions of a License• Importer-Exporter Code Number • Exemption from Bank Guarantee • Clearance of Goods from Customs

INDIA’S FOREIGN TRADE POLICY 2009-14

What is Foreign Trade Policy?

 

The Union Commerce Ministry, Government of India announces the integrated Foreign Trade Policy FTP in every five year. This is also called EXIM policy. This policy is updated every year with some modifications and new schemes. New schemes come into effect on the first day of financial year i.e. April 1, every year. The Foreign trade

Policy which was announced on August 28, 2009 is an integrated policy for the period 2009-14.

INDIA’S FOREIGN TRADE POLICY 2009-14

Objectives of Foreign Trade Policy 2009-14 1. To arrest and reverse declining trend

of exports is the main aim of the policy. This aim will be reviewed after two years.

2. To Double India's exports of goods and services by 2014.

3. To double India's share in global merchandise trade by 2020 as a long term aim of this policy. India's share in Global merchandise exports was 1.45% in 2008.

INDIA’S FOREIGN TRADE POLICY 2009-14

Objectives of Foreign Trade Policy 2009-14 4. Simplification of the application

procedure for availing various benefits

5. To set in motion the strategies and policy measures which catalyze the growth of exports

To encourage exports through a "mix of measures including fiscal incentives, institutional changes, procedural rationalization and efforts for enhance market access across the world and diversification of export markets.

Source : Website: http://dgft.gov.in

Export Promotion Measures

• Assistance to States for Infrastructure Development of Exports (ASIDE)• Market Access Initiative (MAI)• Marketing Development Assistance (MDA)• Meeting Legal expenses for Trade related matters• Towns of Export Excellence• Brand Promotion and Quality • Test Houses• Quality Complaints/ Disputes• Trade disputes affecting trade relations

REWARD / INCENTIVE SCHEMES IN DGFT

•SERVED FROM INDIA SCHEME (SFIS)•VISHESH KRISHI AND GRAM UDYOG YOJANA (VKGUY)

•FOCUS MARKET SCHEME (FMS) 1. Market Linked Focus Products Scrip (MLFPS) 2. Status Holders Incentive Scrip (SHIS)

•FOCUS PRODUCT SCHEME (FPS)

DUTY EXEMPTION & REMISSION SCHEMES

• Duty Exemption Schemes1.Advance Authorization scheme2.Duty Free Import Authorization (DFIA) scheme

• Duty Remission Schemes1. Duty Entitlement Passbook (DEPB) Scheme2. Duty Drawback (DBK) Scheme

EXPORT PROMOTION CAPITAL GOODS (EPCG) SCHEME

• Zero duty EPCG Scheme• Concessional 3% Duty EPCG Scheme• EPCG for Projects• EPCG for Retail Sector• EPCG for agro units

Special Focus Initiatives

SECTORS INITIATIVES

MARKET DIVERSIFICATION •27 New Countries have been included in Focus Market Scheme.

•The incentives increased from 2.5 to 3%.

TECHNOLOGICAL UPGRADATION •EPCG scheme at zero duty have been introduced and has been simplified.

AGRICULTURE AND VILLAGE INDUSTRY

•Vishesh Krishi and Gram Udyog Yojana.

•Capital goods imported under EPCG will be permitted to be installed anywhere in AEZ.

•Import of inputs such as pesticides are permitted.

Special Focus Initiatives

SECTORS INITIATIVESHANDLOOMS AND HANDICRAFTS •Duty free import of old pieces of hand knotted

carpets on consignment basis for re-export after repair is permitted.

GEMS & JEWELLERY •Import of Gold of 8k and above is allowed under replenishment scheme.

• Duty free re-import entitlement for rejected jewellery shall be 2% of FOB value of exports.

•Duty free import entitlement of commercial samples shall be Rs. 300,000.

LEATHER AND FOOTWEAR •Finished Leather exports to be incentivized.

SECTORS INITIATIVES

MARINE SECTOR •Duty free import of specified specialized inputs and chemicals is allowed to the extent of 1% of FOB value of preceding financial year’s export.• Marine sector included for benefits under zero duty EPCG scheme.

ELECTRONICS AND IT HARDWARE MANUFACTURING INDUSTRIES

•Export of electronic goods to be incentivized under Focus Product Scheme.•Electronics Sector included for benefits under SHIS schemes.

GREEN PRODUCTS AND TECHNOLOGIES

•Focus would be on items relating to transportation, solar and wind power generation and other products as may be notified, which will be incentivized under Reward Schemes.

INCENTIVES FOR EXPORTS FROM THE NORTH EASTERN REGION.

•Notified products of this region would be incentivized under Reward Schemes.

Special Focus Initiatives

Export and Trading Houses

Merchant as well as Manufacturer Exporters, ServiceProviders, Export Oriented Units (EOUs) and Units located in Special Economic Zones (SEZs), Agri Export Zones (AEZs), Electronic Hardware Technology Parks (EHTPs), Software Technology Parks (STPs) and Bio-Technology Parks (BTPs) shall be eligible for status and avail various privileges.

SPECIAL ECONOMIC ZONES

•Developed to enhance foreign investments and promote exports from the country.•Geographic regions where economic laws related to export and import are more liberal as compared to rest parts of the country.•No license required for import made in SEZ units.•Exemption from central sales tax on the sale or purchase of goods and exemption from payment of service tax. • Kandla, Gujarat Multi product Mumbai, Maharashtra Electronics and Gems and Jewellery, Noida ,Cochin Special Economic Zone Cochin, Falta Special Economic Zone ,Visakhapatnam SEZ.•There are 114 SEZs in India.•Growth of 121.4% is achieved in 2009-10

Deemed Exports

• What are Deemed Exports?• Categories of Supply• Benefits for Deemed Exports• Benefits to the Supplier• Eligibility for refund of terminal excise duty / drawback• Supplies to be made by the main / subcontractor