FOREIGN TRADE POLICY

OF INDIA

SHITANSH NIGAM
JL14PGDM051

OVERVIEW
INTRODUCTION
NEED OF FOREIGN TRADE
OBJECTIVES
OBJECTIVES OF CURRENT
POLICY
FEATURES OF POLICY
CONCLUSION

INTRODUCTION
It is also known as the EXIM policy.
Directorate General of Foreign Trade (DGFT) comes under the
Central ministry of Commerce and Industry.
It is announced for a term of five years.
Modifications are done on yearly basis.
New schemes are also announced on yearly basis.

INTRODUCTION
It is a set of guidelines and instructions established by the DGFT in
matters related to the import and export of goods.
It takes integrated view of the overall development of Indias
foreign trade and goes beyond the traditional focus on pure exports.
It lays the guidelines to help the traders trade efficiently and
make the maximum.
Currently 2009-2014 FTP is followed.

NEED OF FOREIGN TRADE???

Helps to increase the revenue of the nation.
Provides us with foreign reserve.
Helps in the economic development of a country.
Helps to increase the market of a product.
Increase in efficiency and productivity.
Easy access to new technological innovations.

NEED OF FOREIGN TRADE???

Division of labor and specialization.
Optimum allocation and utilization of resources.
Equality of prices.
Availability of multiple choices.
Raises standard of living of the people.

OBJECTIVES
To accelerate the economy from low level of economic activities to high
level of economic activities.

Derive maximum benefits from expanding global market opportunities.

To stimulate sustained economic growth by providing access to essential

raw materials, intermediates, components, consumables and capital
goods required for augmenting production.

OBJECTIVES
Improving competitiveness and efficiency of Indian agriculture, industry
and services.
Encourage the attainment of internationally accepted standards of quality.
To generate new employment.
To provide quality consumer products at reasonable prices.

FOREIGN TRADE POLICY

(2009-2014)

OBJECTIVES

To arrest and reverse declining trend of exports is the main aim of the
policy.
To Double Indias exports of goods and services by 2014.
Simplification of the application procedure for availing various benefits.
To set in motion the strategies and policy measures which catalyse the
growth of exports
To double Indias share in global merchandise trade by 2020 as a long
term aim of this policy.
To encourage exports through a mix of measures including fiscal
incentives, institutional changes, procedural rationalisation and
efforts for enhance market access across the world and diversification
of export markets

FEATURES

Incentive available under FMS raised from 2.5% to 3%.

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

Widens scope for products to be included for benefits under FPS.

Additional engineering products, plastic and some electronics get a look in.

Higher allocation for Market Development Assistance (MDA) and Market

Access Initiative (MAI).

To aid technological upgradation of export sector, EPCG Scheme at Zero

Duty has been introduced.

Jaipur, Srinagar and Anantnag have been recognised asTowns of

Export Excellence for handicrafts; Kanpur, Dewas and Ambur for
leather products; and Malihabad for horticultural products.

Export obligation on import of spares, moulds etc. under EPCG

Scheme has been reduced by 50%.

Focus Product Scheme benefit extended for export of green

products and some products from the North East Status Holders

To impart stability to the Policy regime, Duty Entitlement Passbook

(DEPB) Scheme is extended beyond 31-12-2009 till 31.12.2010.

Interest subvention of 2% for pre-shipment credit for 7 specified

sectors has been extended till 31.3.2010 in the Budget 2009-10.

TECHNOLOGY UPGRADATION

EPCG Scheme at Zero Duty has been introduced for engineering &
electronic products, basic chemicals & pharmaceuticals, apparels &
textiles, plastics, handicrafts, chemicals & allied products and leather
& leather products.

SUPPORT FOR GREEN PRODUCTS

Focus Product Scheme benefit extended for export of green products,

and for exports of some products originating from the North East.

LEATHER SECTOR

Re-exporting of unsold imported hides and skins and semi-finished leather

have been from public bonded warehouses, on payment of 50% export
duty.

Gems and Jewellery

The manpower centered Gems and Jewellery sector will probably

get a bigger boost from this Foreign Trade Policy.

The government has declared duty draw backs on gold Jewellery

exports, in case the yellow metal has been imported independently
by Jewellery makers.

This stimulating move will inspire Jewellery exporters to import

more raw materials like gold and then export it after valueaddition.

To establish India on the global map as a diamond trading hub a

plan to set up a Diamond Bourses is on the cards. The first one has
already been set up in Mumbai.

TEA
Minimum value addition under advance authorisation scheme for
export of tea has been reduced from the existing 100% to 50%.
DTA sale limit of instant tea by EOU units has been increased from the
existing 30% to 50%.
Export of tea has been covered under VKGUY Scheme benefits.

SIMPLIFICATION OF PROCEDURES

To facilitate duty free import of samples by exporters, number of

samples/pieces has been increased from the existing 15 to 50.
Greater flexibility has been permitted to allow conversion of Shipping
Bills from one Export Promotion scheme to other scheme.
To reduce transaction costs, dispatch of imported goods directly from
the Port to the site has been allowed under Advance Authorisation
scheme for deemed supplies.
Regional Authorities have now been authorised to issue licences for
import of sports weapons by renowned shooters.

FLEXIBILITY PROVIDED TO EXPORTERS

Payment of customs duty for Export Obligation (EO) shortfall under

Advance Authorisation / DFIA / EPCG Authorisation has been allowed
by way of debit of Duty Credit scrips. Earlier the payment was allowed
in cash only.
Time limit of 60 days for re-import of exported gems and jewellery
items, for participation in exhibitions has been extended to 90 days in
case of USA.
Transit loss claims received from private approved insurance
companies in India will now be allowed for the purpose of EO
fulfillment under Export Promotion schemes. At present, the facility
has been limited to public sector general insurance companies only.

HANDLOOM SECTOR

To simplify claims under FPS, requirement of Handloom Mark for

availing benefits under FPS has been removed.

CONCLUSION

After the implementation foreign trade policy , the import and export
among foreign countries have increased and have become more secured.

Setting up of EPZ and SEZ have also increased foreign investors .

Trading Housing have given a platform to both manufacturers and

consumers to freely and easily trade between different countries.

Simplification of procedures and incentives given to exporters/importers

have acted in a good way but more needs to be done in this field.

Thus in conclusion we can say that India is trying to be more liberal in its
foreign trade policy and it will prove to be beneficial for us in future.