Presentation

on
Foreign Trade Policy 2004-09

Objective:# Facilitate sustained growth in exports

to attain a share of atleast 1.5% of global
merchandise trade.
# Present share - 0.67%
# Export target (2006-07)- 85 b $.
# Present Annual growth rate(CAGR) -11.9%

New Export Target

# Target- 1.5% of the International Trade
# CAGR Required- 15.18% (in US$ terms)
# Assumption- World Trade Growth @ 4.5%
(2003 rate)

 Objectives (Contd.)
# Facilitating high share of Indian Goods
and Services in the International market
# Act as Instrument of Economic Growth,
Employment Generation and Poverty
Alleviation
# Reflect the priorities for development of
the Indian Economy

STRATEGY TO ACHIEVE THE

OBJECTIVES
# Bring down transaction cost Simplified procedure,
Unshackling of controls, built-in transparency &
mutual trust;
# India to be a Global hub for Manufacturing, Trading
& Services;
# Special Focus area Initiatives;
# Facilitating Technological & Infra-structural upgradation;
# Neutralising incidence of all levies & duties on inputs
Duties & Levies should not be exported.

Thrust Sectors

# Agricultural
#
#
#
#
#

Handicrafts
Handlooms
Gems and Jewellery
Leather
Textile

Digital automation target

#All Export transactions would be

through EDI mode by 31st October,
2005;
# Digital Signature and EFT facility
operational

Indias Foreign Trade

Period $ Growth Rate
1999-2000

10.85

2000-2001

21.01

2001-2002

-1.65

2002-2003

20.34

2003-2004

17.26

Incorporating a legal entity

In India [ROC]

Proprietorship&
Partnership Concern
Trade Licence
[State Departments]

Permanent Acccount Number

[PAN by Income Tax Dept.]

Bank Certificate
[from the concerned Bank]

Importer-Exporter Code Number[DGFT]

EXPORTS

IMPORTS
Nature of Restriction
ITC[HS] Classification
Free List items
Prohibited

Negative List
Restricted

Canalized

ASIDE
SCHEME
Duty exemptions
Under Customs
Notif. 21/2002

Preexport

INFRASTRUCTURE
Related Sops
Additional incentives
Linked with Exports

CENTRAL
DUTY REFUND/
NEUTRALISATION/
EXEMPTION SCHEMES

TOWNS OF
EXPORT
EXCELLENCE

Misc.Incentives
Such as DFEC,
Target Plus, Addl.
weightage

Postexport

Export Incentives(DOC)
MDA Grant

Market Development
Initiatives

MAI Grant

CENTRAL DUTIES
CUSTOMS DUTYBasic, Addl(CVD), E.Cess,
Anti-dumping, Safeguard duties etc.
EXCISE DUTY--- Basic, Addl etc.
EXPORT CESS
CENTRAL SALES TAX
INCOME TAX
SERVICE TAX
OTHERS
ELECTRICITY DUTY, OCTROI, SALES TAX etc.

SCHEMES
# SEZ Scheme
# EOU/EHTP/STP/BTP Schemes
# EPIP Scheme
# Warehousing Scheme
# CCP
# DTA Schemes

DTA SCHEMES

Post-Export
Pre-Export

1. ADVANCE LIC.
2. EPCG

1.
2.
3.
4.
5.
6.

DFRC, 2. DEPB, 3.REP

DRAWBACKPhy & D.E.
TED Refund
Target Plus
DFEC for Service Sec
Vishesh Krishi Upaj Yojana

Physical (out of India/Supply to SEZ)

(Against Indian Rupees or Free foreign Exchange)
EXPORTS
Supply within the country(Deemed)
(In Indian Rupees or Free Foreign ExchangeEEFC)

Exporters:-- Physical Vs Merchant

ADVANCE LICENCE SCHEME

X----------Y--------Z

1. PHYSICAL EXPORT
-- Duty free import of Inputs, Fuel, Oil,
Energy, Catalyst etc.
-- +V.A.;AU condition; Norm fixed & No
Norm cases; Imports & Exports valid upto 24
months; Further extn allowed
-- Supply to SEZ units also covered;
-- E.O. discharge based on S/Bs & BRC
(Irrevocable L/C , Provision of Avalisation,

2. Advance Licence (Intermediate Supply)

-- For supplies to Advance licence for physical
exports; Alternatively direct Physical Exports
also allowed
-- Duty free import of Inputs, Fuel, Oil,Energy,

Catalyst etc.
-- +V.A.;AU condition; Norm fixed & No Norm
cases; Imports & Exports valid upto 24 months;
Further extn allowed
-- E.O. discharge based on S/Bs & Bank certificate

3. Advance Licence (Deemed Export)

-- For supplies within India under various
projects, supplies to EOU/EHTP/STP/BTP
-- Duty free import of Inputs, Fuel, Oil,
Energy, Catalyst etc.
-- +V.A.;AU condition; Norm fixed & No Norm
cases; Imports & Exports valid upto 24 months
or co-terminus with the project; Extn allowed
-- E.O. discharge based on S/Bs & Bank certificate
(Irrevocable inland L/C, Provision of Avalisation,
co-acceptance also available)
-- Anti-dumping & Safeguard duty not exempted
except supplies to EOU/EHTP/STP/BTP

EPCG Scheme
--Import of capital goods with AU condition at
concessional rate of 5% duty for pre-production,
Production & Post production purposes related to
export (Both Physical & deemed);Import of Car
-- E.O. 8 times the duty saved in 8 years; 12 Years;
-- E.O. monitoring in two blocks only
-- Special Dispensation for licence with duty saved of
Rs 100 crores or above, Agro units, SSI units, BIFR.
E.O. period 12 years and varied /reduced E.O.
-- EPCG licence for project importReduced E.O.

DFRC SCHEME
--Post export scheme based on S/B (Bill of Export)
and BRC; Both against Phy. & Deemed exports;
--Min. 25% V.A., SION based, Certain sensitive
items with technical specification allowed;
--Freely transferable certificate; However DFRC
with AU condition also available;24 months valid;
--Fuel allowed to be transferred to marketing
agencies authorised by Ministry of P&NG;
--Facility of CENVAT credit or drawback
--Only basic customs duty exemption at the time of

4.DEPB SCHEME
--Post export scheme based on S/B (Bill of Export)
and BRC; Freely transferable unless specified;
-- Supplies to SEZ units also elligible
--Based on basic customs duty on inputs
--Filing of application and late cut
--CENVAT credit or drawback available;
--Any item including CG (freely importable) allowed
for import;
--Valid for 24 months;

TARGET PLUS SCHEME

--- For Star Export Houses;
-- Duty credit based on Incremental exports(fob value in
free foreign exchange) subject to a minimum export
turnover of Rs 10 crores in the previous year;
-- Entitlement:
1. >20% & <25%
5%
>=25% & <100%
10%
>=100%
15%(Based on max. 100%growth)
2. Restrictions on export turnover calculation
3. Imports allowed
-- CENVAT credit or DBK allowed for the CVD
paid/debited

SERVICE EXPORTS
-- For 161 Tradable services
-- New Export Promotion Council for Services
-- DFEC for Serve from India Scheme
1. Eligibility:
-- Min.FFE of Rs 10 Lakhs in the preceding or current
financial year (Exception Rs 5 Lakhs for individuals)
-- Categories of exports excluded for entitlement
2. Entitlement:
Hotels of one star & above
5%
Stand alone Restaurants
20%
All other service providers
10%
3. Imports allowed:

VISHESH KRISHI UPAJ YOJANA

--A new scheme christened as the Vishesh Krishi Upaj Yojana to
boost exports of specified agricultural products.
1. Duty credit entitlement of 5% of FOB value of Exports.
2. Exports of fruits, vegetables, flowers, minor forest
produce and their value added variants
3. Freely transferable
4. Imports of inputs and capital goods permitted.
5.CENVAT credit or DBK allowed for the CVD

--Import of capital goods shall be permitted duty free under the

EPCG Scheme
--Units in Agri Export Zones (AEZ) shall be exempt from BG under

STATUS CERTIFICATES
--One star to Five Star Export House
-- Double weightage for certain categories
-- Special Privileges

THANKS