FOREIGN TRADE POLICY IN INDIA

PRESENTED BY-Akanksha Jain

Arshia KhanNitesh Kundnani

INTRODUCTION Trade between two or more nations is called foreign trade or

international trade

Foreign trade is also known as external trade.

Foreign trade transactions are classified under three categories:

Import Trade Export Trade Net Exports (E-I)

FOREIGN TRADE POLICY Foreign trade policies are government actions, especially

tariffs, import quotas, and export subsidies, designed to increase net exports by promoting exports or restricting imports.

Long term objective of the FTP is to promote exports and increase India’s competitiveness globally.

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

HISTORY The Government of India, Ministry of Commerce and Industry announced

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

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

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

The Export Import Policy (EXIM Policy) or Foreign Trade Policy is 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 2009-14Short 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.

ANNOUNCEMENTS FOR FPS, FMS, MLFPS Focus Product Scheme (FPS) - to promote export of

products which have high export intensity / employment potential.

Focus Market Scheme (FMS) -to offset high freight cost and other externalities to select international markets with a view to enhance India’s export competitiveness in these countries.

Market Linked Focus Product Scheme (MLFPS) -To incentivise export of products that have high employment intensity in rural and semi urban areas

26 new markets added in this scheme. Incentives under FMS raised from 2.5 % to

3 %

Incentive available under Focus Product Scheme (FPS) raised from 1.25% to 2%.

Extra products included in the scope of benefits under FPS

Market Linked Focus Product Scheme (MLFPS) expanded by inclusion of products like pharmaceuticals, textile fabrics, rubber products, glass products,auto components, motor cars, bicycle and its parts.etc. (However , benefits to these products will be provided, if exports are made to 13 identified markets (Algeria, Egypt, Kenya, Nigeria,South Africa, Tanzania, Brazil, Mexico, Ukraine, Vietnam, Cambodia, Australia and New Zealand).

A common simplified application form has been introduced to apply for the benefits under FPS, FMS, MLFPS and VKGUY.

Towns of Export Excellence (TEE)The following cities have been recognized as towns of export

excellence (TEE) Handicrafts : Jaipur, Srinagar and Anantnag Leather Products : Kanpur,Dewas and Ambur Horticultural Products: Malihabad

E.P.C.G. SCHEME - The Export Promotion Capital Goods scheme is export-promotion initiative launched by the government to allow exporters to import machinery and equipment at affordable prices so that they can produce quality products for the export market) 

To aid technological upgradation of export sector, EPCG Scheme at Zero Duty has been introduced.

Relaxations - More flexible  No restriction on second hand imported goods

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

GEMS ANS JEWELLERY

Agro Exports

• Introduction of a single window system to facilitate export of perishable agricultural produce with an aim to reduce transaction and handling cost.

• This system will involve creation of multi-functional nodal agencies. These agencies will be accredited by APEDA.

Marine sector

Fisheries exempted from maintenance of average EO under EPCG Scheme (along with 7 sectors) however Fishing Trawlers, boats, ships and other similar items shall not be allowed for this exemption.

Additional flexibility under Target Plus Scheme (TPS) / Duty Free Certificate of Entitlement (DFCE) Scheme for the marine sector.

LEATHER SECTOR  re-port of unsold imported rawhides and skins and semi finished leather Enhancement of FPS rate to 2 %  

TEA Minimum value addition for export reduced from 100% to50%

PHARMACEUTICALS SECTOR  Export obligation period increased to 36 months. extensively covered under MLFPS for countries in Africa & Latin America -some

countries in Oceania

HANDLOOM SECTOR  requirement of  “Handloom Mark” for availing benefits has been removed.

Easy Import of samples: Number of sample pieces has been increased from the

existing 15 to 50. This will facilitate the the duty free import of samples by exporters.

  Convertibility of Shipping Bills Greater flexibility has been permitted to allow

conversion of Shipping Bills from one Export Promotion scheme to other scheme. Customs shall now permit this conversion within three months, instead of the present limited period of only one month.

Scheme for Export Oriented Units:EOUs have been allowed to sell products manufactured by them in DTA

(Domestic Tariff Area) upto a limit of 90% instead of existing 75%. (This means that instead of 75% these units can sell up to 90 % of their products in the domestic markets)

Easy Import of samples:Number of sample pieces has been increased from the existing 15 to 50.

This will facilitate the the duty free import of samples by exporters.   Convertibility of Shipping Bills Greater flexibility has been permitted to allow conversion of Shipping

Bills from one Export Promotion scheme to other scheme. Customs shall now permit this conversion within three months, instead of the present limited period of only one month.

Reduction in Transaction Costs: Dispatch of imported goods directly from the Port to the site has been allowed. No fee shall now be charged for grant of incentives under the Schemes in Chapter 3

of FTP.

Announcements for Sports Weapon:Licenses for the import of sports weapon will be issued now by Regional Authorities

provided a NOC (No Objection Certificate) is issued by Ministry of Sports & Youth Affairs. (Earlier DGFT Headquarters had to be approached for this)

Announcements for Medical DevicesTo solve the problem of medical device industry, the procedure for issue of Free Sale

Certificate has been simplified and the validity of the Certificate has been increased from 1 year to 2 years.

Announcements for Automobile IndustryThose Automobile industries which have their R&D establishment will be allowed free

import of reference fuels (petrol and diesel), upto a maximum of 5 KL per annum, which are not manufactured in India. Simplification in EPCG for automobile industry

Duty Credit Scrips Earlier the payment of customs duty for Export

Obligation (EO) shortfall under Advance Authorisation , DFIA or EPCG Authorisation was allowed in cash only. Now this payment can be done in the way of debit of Duty Credit scrips.

  Import of Restricted Items Restricted Items can be imported now (as

replenishment) against transferred DFIAs (Duty Free Import Authorisations) as the present DFRC (Duty Free Replenishment Card) scheme.

India’s trade with USA and UK

THANK YOU!