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02- Kushal Bhagat03- Dipak Bhayani

Ministry of Commerce and IndustryThe Ministry of Commerce and Industry is the nodal authority for

formulating and implementing the foreign trade policy in matter related to Import. The Department of Commerce play a key role in matters related to multilateral and bilateral commercial relations, state trading, export promotion measures and development and regulation of certain import oriented industries and commodities.

There are two departments under the Ministry of Commerce and Industry. The first one is the Department of Commerce and the second is Department of Industrial Policy & Promotion. The department of Ministry of Commerce which is sometimes also termed as Department of Industrial Policy & Promotion was established in the year 1995, and in the year 2000 Department of Industrial Development was merged with it.

Ministry of Commerce and Industry has its offices in all the major cities. Its Delhi office is located at Udyog Bhavan, New Delhi – 110011 India

IMPORT Introduction

Starting an import business is a goal of more than thousands of merchants

and businessman. Like an export business, import business is also very profitable

business, if an importer proceeds with the right strategies. However, the long term

success and profitability of an import business greatly depends on the importer’s

knowledge and understanding about the international market and foreign market

analysis.

Today, importing goods from abroad has becomes a big business. Everything from

beverages to cars--and a staggering list of other products that one might have never

imagined has now become the part of the global import. Millions of products are

bought, sold, represented and distributed somewhere in the world on a daily basis.

Reasons for Import Availability: An individual or business man or an importer needs

to import because there are certain things that he can’t grow or manufacture in his home country. For example Bananas in Alaska, Mahogany Lumber in Maine and Ball Park franks in France.

Cachet: A lot of things, like caviar and champagne, pack more

cachet, more of an "image," if they're imported rather than home-grown. Think Scandinavian furniture, German beer, French perfume, Egyptian cotton. It all seems classier when it comes from distant place.

Price: Price factor is also an important reason for import of

products. Some products are cheaper when imported from foreign country. For example Korean toys, Taiwanese electronics and Mexican clothing, to rattle off a few, can often be manufactured or assembled in foreign factories for far less money than if they were made on the domestic country.

The required documents that an importer needs are:IT form: International trade transaction form for registration of

goods and services.Single Administrative Document: a declaration form for the import

of goods from the freedom of movement. Airway Bill/Bill of Lading: Shipping document issued by the airline

company or shipping company. Invoice and Certificate of Origin, if the goods come from

CARICOM. If one requires advice from the Ministry in question, he will have to

address that particular Ministry before submitting the documents to the Department of Import, Export and Foreign Currency Control.

 For goods bound by specific conditions, a certificate of the relevant authority (department of Food Inspection of the Bureau of Public Health, the Pharmaceutical Inspector and the Bureau for Registration of Medicines) may suffice.

Import in IndiaThe rising middle income groups of consumers in India and their

increasing levels on expenditure on various products has resulted

a faster rising demand of the Indian import business.

Major imports of India include cereals, edible oils, machineries,

fertilizers and petroleum products.

Total import from India estimated to be around US$187.9 billion.

India is also a bulk importer of edible oil, sugar, pulp and paper,

newsprint, crude rubber and Iron and steel.

Import Regulatory Body

In India, all the activities related to import are handled

by the Directorate General of Foreign Trade (DGFT), a

government organization that also controls the export

business in India. DGFT and all its regional offices work

under the Ministry Commerce and Industries,

Department of Commerce, Government of India.

All the procedure and policies in matter related to the

import is announced by the DGFT through its

notification, appendices and forms.

Example : Commerce ministry for 20% safeguard duty on soda ash

The Ministry of Commerce has recommended to the Ministry of Finance for

a 20 per cent safeguard duty on soda ash, a major ingredient for detergents,

to protect the domestic industry from cheaper imports from China.

Safeguard duty is a temporary protectionist measure, which is brought in for

a certain time-frame to avert any damage to the domestic industry from

cheap imports.

“CM have approved imposition of 20 per cent safeguard duty on soda ash

against cheap imports from China and waiting for the approval of the finance

ministry,” Commerce Secretary G K Pillai told reporters here at IIFT

convocation.

Cont..The Directorate General of Safeguards, Customs and Central Excise

(DGS), which investigates problems pertaining to cheap imports, had

recommended the commerce ministry to slap the duty.

The application has been filed by Alkali Manufacturers Association of

India on behalf of companies like Tata Chemicals, Birla Sagar, Nirma Ltd

and Gujarat Heavy Chemicals.

The DGS has said that the share of imports from China in relation to

domestic production has increased from 0.44 per cent in 2005-06 to 2.59

per cent in April-September 2008-09.

“Therefore, the share of imports from China has increased sharply to

10.13 per cent,” DGS said in its notification.

EXPORT

In order to export, the necessary formalities must be observed.

The required documents that an exporter needs are:

IT form: International Trade Transaction form for registration of

goods and services.

The Single Administrative Document: a declaration form for the

export of goods from the freedom of movement.

 Airway Bill/Bill of Lading: shipping document issued by the airline

company or shipping company

 Invoice and Certificate of Origin, if the goods go to CARICOM.

Depending on the product, one may first have to report to a certain

authority. For example: for wood and wood products one must first report to

the Foundation for Forest Management and Production Control. However,

the Department of Import, Export and Foreign Currency Control remains the

authority that issues the license.

H-03 license: in case it concerns goods from the so-called Negative List

(Articles 2 and 3 of the Negative List) an H-03 license of the Department of

Import, Export and Foreign Currency Control will be required after the

relevant Ministry has issued a favorable advice with regard to the export.

The H-03 license must be submitted in triplicate, as follows: 1 copy for the

Department of Import, Export and Foreign Currency Control; 1 copy for the

applicant; 1 copy for customs.

Import / Export Restrictions under Customs lawUnder sub-section (d) of section 111 and sub-section (d) of Section 113,

any goods which are imported or attempted to be imported and exported

or attempted to be exported, contrary to any prohibition imposed by or

under the Customs Act or any other law for the time being in force shall

be liable to confiscation. Section 112 of the Customs Act provides for

penalty for improper importation and Section 114 of the Customs Act

provides for penalty for attempt to export goods improperly. In respect of

prohibited goods the Adjudicating Officer may impose penalty up to five

times the value of the goods. It is, therefore, absolutely necessary for the

trade to know what are the prohibitions or restrictions in force before they

contemplate to import or export any goods.

GENERAL PROVISIONS REGARDING IMPORTS AND EXPORTS

Exports and Imports free unless regulatedExports and Imports shall be free, except where regulated by FTP

or any other law in force.

Compliance with Laws Every exporter or importer shall comply with the provisions of FT

(D&R) Act, the Rules and Orders made there-under, FTP and terms and conditions of any Authorization granted to him. All imported goods shall also be subject to domestic Laws, Rules, Orders, Regulations, technical specifications, environmental and safety norms as applicable to domestically produced goods.

Restricted Goods  Any goods, export or import of which is restricted under ITC(HS)

may be exported or imported only in accordance with an Authorisation or in terms of a public notice issued in this regard.

Procedure DGFT may, specify procedure to be followed for an exporter or importer or by

any licensing or any other competent authority for purpose of implementing provisions of FT (D&R) Act, the Rules and the Orders made there under and FTP. Such procedures shall be published by means of a Public Notice, and may, in like manner, be amended from time to time.

Terms and Conditions of a license / Certificate / Permission Every Authorisation shall be valid for prescribed period of validity and shall

contain such terms and conditions as may be specified by RA which may include:

(a) Quantity, description and value of goods;(b) Actual User condition;(c) Export obligation;(d) Value addition to be achieved; and(e) Minimum export / import price.

Authorisation / License Certificate / Permission not a RightNo person may claim an Authorization as a right and DGFT / or RA shall have

power to refuse to grant or renew the same in accordance with provisions of FT (D&R) Act, Rules made there under and FTP.

PenaltyIf an Authorisation holder violates any condition of such Authorisation or

fails to fulfill export obligation, he shall be liable for action in accordance with FT (D&R) Act, the Rules and Orders made there under, FTP and any other law for time being in force.

 

Importer-Exporter Code (IEC) Number No export or import shall be made by any person without an IEC number

unless specifically exempted. An IEC number shall be granted on application by competent authority in accordance with procedure specified in HBP v1.

 

Trade with Neighboring Countries DGFT may issue instructions or frame schemes as may be required to

promote trade and strengthen economic ties with neighboring countries.

Import under Lease FinancingPermission of RA is not required for import of capital goods

under lease financing. 

 

Scrap/Waste in SEZ Any waste or scrap or remnant including any form of metallic waste & scrap

generated during manufacturing or processing activities of an SEZ Unit/ Developer/Codeveloper shall be allowed to be disposed in DTA freely subject to payment of applicable Customs Duty.

 

Import of Gifts Import of gifts shall be permitted where such goods are otherwise freely

importable under FTP. In other cases, a Customs Clearance Permit (CCP) shall be required from DGFT

Import on Export Freely exportable new or second hand capital goods, basis equipments,

components, parts and accessories, containers meant for packing of goods for exports, jigs, fixtures, dies and moulds may be imported for export without an Authorisation on execution of LUT / BG with Customs Authorities.

 

Re-import of goods repaired abroad Capital goods, equipments, components, parts and accessories, whether

imported or indigenous, except those restricted under ITC (HS) may be sent abroad for repairs, testing, quality improvement or up gradation or standardization of technology and re-imported without an Authorisation.

Free Exports All goods may be exported without any restriction except to extent such

exports are regulated by ITC (HS) or any other provision of FTP or any other law for time being in force. DGFT may, however, specify through a public notice such terms and conditions according to which any goods, not included in ITC (HS), may be exported without an Authorization.

 Export of Samples Export of samples and Free of charge goods shall be governed by provisions

given in HBP v1.

 Export of Passenger Bonafide personal baggage may be exported either along Baggage with

passenger or, if unaccompanied, within one year before or after passenger’s departure from India. However, items mentioned as restricted in ITC (HS) shall require an Authorisation. Government of India officials proceeding abroad on official postings shall, however, be permitted to carry along with their personal baggage, food items (free, restricted or prohibited) strictly for their personal consumption.

Export of GiftsGoods, including edible items, of value not exceeding Rs.5,00,000 /- in a

licensing year, may be exported as a gift. However, items mentioned as restricted for exports in ITC (HS) shall not be exported as a gift, without an Authorisation.

Export of Replacement Goods or parts thereof on being exported and found Goods defective /

damaged or otherwise unfit for use may be replaced free of charge by the exporter and such goods shall be allowed clearance by Customs authorities, provided that replacement goods are not mentioned as restricted items for exports in ITC (HS).

 Export of Repaired GoodsGoods or parts, except restricted under ITC (HS) thereof, on being

exported and found defective, damaged or otherwise unfit for use may be imported for repair and subsequent re-export. Such goods shall be allowed clearance without an Authorisation and in accordance with customs notification.

Realisation of Export ProceedsIf an exporter fails to realise export proceeds within time specified by RBI,

he shall, without prejudice to any liability or penalty under any law in force, be liable to action in accordance with provisions of FT (D&R) Act, Rules and Orders made there under and FTP.

Free movement of export goodsConsignments of items meant for exports shall not be withheld /

delayed for any reason by any agency of Central / State Government. In case of any doubt, authorities concerned may ask for an undertaking from exporter.

 

No seizure of Stock No seizure of stock shall be made by any agency so as to disrupt

manufacturing activity and delivery schedule of exports. In exceptional cases, concerned agency may seize the stock on basis of prima facie evidence. However, such seizure should be lifted within 7 days.

 Export Promotion Councils (EPC)

Basic objective of Export Promotion Councils (EPCs) is to promote and develop Indian exports. Each Council is responsible for promotion of a particular group of products, projects and services as given in HBP-v1.

Trade Facilitation through EDI InitiativesIt is endeavor of Government to work towards greater simplification, standardization and

harmonization of trade documents using international best practices. As a step in this direction, DGFT shall move towards an automated environment for electronic filing, retrieval and authentication of documents based on agreed protocols and message exchange with other community partners including Customs and Banks.

Easing of Documentation RequirementPending finalisation of Single Common Document (SCD) for international trade,

Government Departments dealing with exports and imports will honour Authorisation issued by other Government departments based on verification of export documents Like shipping bill, bank realization certificate, Packing list, bill of lading etc. and will not insist upon fresh submission of these documents.

 

Exemption / Remission of Service Tax in DTAFor all goods and services which are exported from units in DTA and units in

EOU / EHTP / STP / BTP exemption / remission of service tax levied and related to exports, shall be allowed, as per prescribed procedure in HBP v1.

 

 Exemption from Service Tax on Services received abroadFor all goods and services exported from India, services received / rendered

abroad, where ever possible, shall be exempted from service tax.

MINISTRY OF COMMERCE AND INDUSTRY

(VANIJYA AUR UDYOG MANTRALAYA)

INTERNATIONAL TRADE

1. International Trade and Commercial Policy including

tariff and non-tariff barriers.

2. International Agencies connected with Trade Policy (e.g.

UNCTAD, ESCAP, ECA, ECLA, EEC, EFTA,

GATT/WTO, ITC and CFC).

3. International Commodity Agreements other than

agreements relating to wheat, sugar, jute and cotton.

4.  International Customs Tariff Bureau including residuary

work relating to Tariff Commission.

FOREIGN TRADE (GOODS & SERVICES)

5.  All matters relating to foreign trade.

6. Import and Export Trade Policy and Control excluding

matters relating to-

     (a)  import of features films;

    (b)  export of Indian films- both feature length and

shorts; and

(c) import and distribution of cine-film (unexposed)

and other goods required by the film industry.

STATE TRADING7. Policies of State Trading and performance of organizations established

for the purpose and including-

(a)The State Trading Corporation of India Limited and its subsidiaries excluding Handicrafts and Handlooms Export Corporation and Central Cottage Industries Corporation;  the Tea Trading Corporation of India Limited and the Spices Trading Corporation of India Limited;

(b)  Projects & Equipment Corporation of India Limited (PEC); 

(c)  India Trade Promotion Organisation and its subsidiaries;

(d)  Minerals and Metals Trading Corporation and its subsidiaries.

8.  Production, distribution (for domestic consumption and exports) and development of plantation crops, tea, coffee, rubber, spices, tobacco and cashew.

9. Processing and distribution for domestic consumption and exports of Instant Tea and Instant Coffee.

        

 

MANAGEMENT OF THE INDIAN TRADE SERVICES (ITS)

11. Cadre Management of the Indian Trade Service and all matter

pertaining to training, career planning and manpower planning for

the service.

12.  Cadre Management of Indian Supply Service and all matter

pertaining to training, career planning and manpower planning for

the Service.

13.   Cadre Management of Indian Inspection Service and all matter

pertaining to training, career planning and manpower planning for

the Service.

SPECIAL ECONOMIC ZONES

All matters relating to development,

operation and maintenance of special

economic zones and units in special economic

zones, including export and import policy,

fiscal regime, investment policy, other

economic policy and regulatory framework.

EXPORT PRODUCTS AND INDUSTRIES AND TRADE FACILITATION

Setting up of Export Processing Zones (EPZ)/Agricultural Export

Zones (AEZ) and 100% Export Oriented Units (EOUs).

17.  Gems and Jewellery.

18.  Matters relating to Export Promotion Board, Board of Trade and

International Trade Advisory Committee.

19.  Matters relating to concerned Export Promotion Councils/Export

Promotion Organisations.

20.  Indian Institute of Foreign Trade and Indian Institute of Packaging.

21. Indian Diamond Institute and Footwear Design and Development

Institute.

22.  Coordination for export infrastructure.

Cont..24. All organizations and institutions connected with the provision of

services relating to the export effort including-

(a)Export Credit and Export Insurance including Export Credit and

Guarantee Corporation Limited;  

(b)  Export Inspection Council; Standards including Quality Control;

(c)  Directorate General of Commercial Intelligence and Statistics;

(d)  Free Trade-Zones.

25. Projects and programmers for stimulating and assisting the export

efforts.