FOREIGN TRADE POLICY IN INDIA 2009-2014

GROUP MEMBERS

2604 ASHWIN 2609 JOELLA 2611 RICHARD DALVI 2615 LIRON 2620 JOYICE 2623 DELNA 2548 TINA

INTRODUCTION

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.

FOREIGN TRADE POLICY

Long term objective of the FTP is to promote exports and increase India’s competitiveness globally, leading to employment generation particularly in the labor-intensive sectors

Objective common to both the old and new policies is to double India’s exports within 5 years

WHERE DOES INDIA STAND GLOBALLY?

RANKING

COUNTRY EXPORTS (trillions)

DATE OF INFO

1 CHINA $2,210,000,000,000

2013 est

2 UNITED STATES

$ 1,575,000,000,000

2013 est

3 GERMANY $ 1,493,000,000,000

2013 est

4 UK $ 813,200,000,000 2013 est

5 JAPAN $ 697,000,000,000 2013 est

6 FRANCE $ 578,600,000,000 2013 est

7 SOUTH KOREA

$ 557,300,000,000 2013 est

8 NETHERLANDS

$ 551,000,000,000 2013 est

9 RUSSIA $ 515,000,000,000 2013 est

10 ITALY $ 474,000,000,000 2013 est

17 INDIA $ 313,200,000,000 2013 est

HISTORY

Earlier this policy known as  Export Import (EXIM) Policy.

Union Commerce Ministry, GOI announces integrated FTP every five year.

updated every year on the 31st of March and the modifications, improvements and new schemes becomes effective from April  month of each year

Foreign Trade Policy announced on 27th August 2009 for the period 2009-2014

Foreign Trade Policy 2009-14

Short Term Objectives: arrest and reverse the declining trend of exports. provide support to those sectors which have been hit badly by

recession.

Medium term Policy Objectives : achieve an Annual Export growth of 15% by March 2013. achieve Annual Export growth of around 25% by 2014.

Long Term Objective : doubling India’s share in Global Trade by 2020.

FOREIGN TRADE POLICY 2009-14 HIGHLIGHTS

ANNOUNCEMENTS FOR FPS, FMS, MLFPS

26 New markets added under focus market scheme (FMS) Incentives under FMS raised from 2.5% to 3% Incentives available under FPS raised from 1.25% to 2% MLFPS expanded by inclusion of products like

pharmaceuticals , textile fabrics, rubber products, glass products, auto components , etc

AGRICULTURAL SECTOR a single window system to facilitate export of

perishable agricultural produce has been introduced.GEMS AND JEWELLERY planned to establish “Diamond Bourses” import of  cut & polished diamonds on consignment basis of personal carriage upto US $ 5 million value units in

case of participation in overseas exhibition

LEATHER SECTOR 

re-port of unsold imported rawhides and skins and semi finished leather

Enhancement of FPS rate to 2 %  TEA SECTOR DTA (Domestic Tariff Area) sale limit of instant tea by EOU

units increased from 30% to 50%. Export of tea has been included under VKGUY Scheme benefits.

AUTOMOBILE SECTOR

India has become one leading manufacturers of cars.

To boost exports of automobile sector , FTP has allowed free import of reference fuels upto a maximum 5kl per annum, which are not manufactured in India.

STATUS HOLDERS

Large export organisations can become export houses and trading houses.

ELIGIBILITY Merchant and manufacturers exporters. Export oriented units. Units located in SEZ, agri export zones. Units located in electronic hardware technology parks

software tech parks.

STATUS HOLDER EXPORT PERFORMANCE(F.O.B. BASIS) ₹ (crores)

1 export house 20 crores

2 star export house 100 crores

3 trading house 500 crores

4 star trading house 2,500 crores

5 premier trading house 7,500 crores

STATUS CATEGORY

1.INCENTIVE SCRIP FOR IMPORT OF CAPITAL GOODS:

Status holders of specified sectors shall be eligible for status holder incentive scrip @ 1% on the FOB. The specified sectors are:

Basic chemicals (excluding pharma products) Engineering sector (excluding iron & steel) Leather sector (excluding finished leather) Textiles and jute Handicrafts & plastics

2.FOREIGN EXCHANGE RETENTION:

The status holders are allowed to retain 100% of foreign exchange earned in exchange earners foreign currency(EEFC) account.

3.EXEMPTION FROM NEGOTIATION OF DOCUMENTS THROUGH BANK:Exemption from compulsory negotiation of documents through banks. This will enable the status to dispatch the documents directly to the importers.

4.CUSTOM CLEARANCE ON SELF-DECLARATION:

Customs clearances for imports and exports on self-declaration basis. This means the customs need not verify the export and import documents of the status holders.

5.LONGER CREDIT PERIOD :

The status holders can realize foreign exchange proceeds within a period of 360 days instead of the normal 180 days.

6.EXEMPTION FROM FURNISHING BANK GUARANTEE:Exempted from furnishing bank guarantee for claiming incentives in respect of various schemes under FTP. i.e the exporters can get incentives without providing a bank guarantee.

7.AGRI-INFRASTRUCTURE SCRIP BENEFITS:

Under agri-infrastructure incentive the exporters of agricultural items can import capital goods without payment of customs duty, subject to certain conditions.

Exports of Principal Commodities

India's Exports to Principal Regions

References

http://www.eximkey.com http://www.eximinfo.com http://www.eximbankindia.in/ http://dgft.gov.in http://finmin.nic.in/