The document provides an overview of India's Foreign Trade Policy. It discusses the objectives of promoting exports and diversifying India's export basket. Some key points include:
- The Foreign Trade Policy is formulated by the Directorate General of Foreign Trade for a five year period and provides the legal framework and incentives to boost exports.
- Major export promotion schemes under the policy include the Merchandise Exports from India Scheme (MEIS) and Service Exports from India Scheme (SEIS) which provide export incentives.
- The policy aims to increase India's exports to $900 billion by 2019-20 and raise India's share of world exports from 2% to 3.5%. It also aims to promote ease
5. Composition of Foreign
Trade
• Major Exports and Imports of India
o https://www.statista.com/statistics/263662/export-of-goods-from-india/
• Countries to which we export majorly
• Countries from which we import majorly
o http://pib.nic.in/newsite/PrintRelease.aspx?relid=161020
o http://stat.wto.org/CountryProfile/WSDBCountryPFView.aspx?Country=IN&Langu
age=F
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6. Indian Trade Statistics
• https://www.indiantradeportal.in/index.jsp?lang=0
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7. Trade Policy
• Trade policy refers to the complete framework of laws,
regulations, international agreements and negotiating
stances adopted by a government to achieve legally
binding market access for domestic firms
- Walter Goode – Dictionary of Trade Policy Terms
FTP provides framework for
• Rules and procedures for exports and imports
• Incentives for promoting exports
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8. Objectives of Foreign Trade
Policy
• Providing a stable and sustainable policy environment for
foreign trade in merchandise and services
• Expanding markets and integrating with major regions for
increasing demand for products
• Promoting diversification of India’s export basket by
helping various sectors of the Indian economy to gain global
competitiveness for promoting exports
• Reduce the trade imbalance and rationalize imports and
create favorable BoP position
• Regulate imports and exports
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9. Foreign Trade Policy (FTP)- India
• Ministry of Commerce and Industry
• FTP is prepared by (Directorate General of Foreign Trade)
DGFT, which is head quartered at New Delhi and supported
by 36 regional offices across India
• DGFT is the notified department to execute the FTP
• DGFT prescribes the forms and procedures (Handbook of
procedures)
• Foreign Trade (Development & Regulation) Act 1992 passed
by the Ministry of Commerce & Industry
• The Foreign Trade Policy 2015-20 is governed by The
Foreign Trade (Development and Regulation) Act, 1992.
• Formulated for a period of five years
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10. Laws Related to Foreign Trade
in India
• Foreign Trade (Development and Regulation) Act, 1992
• Foreign Trade (Regulation) Rules 1993 (DGFT)
• Foreign Trade (Exemption) Order 1993
• Foreign Exchange Management Act 1999 (RBI)
• Customs and Central Excise Duties Drawback Rules
1995 (Central Board)
11. Highlights of the FTP 2015-20
• There are 9 chapters in this policy
• Increase exports to $900 billion by 2019-20, from $466
billion in 2013-14
• Raise India's share in world exports from 2% to 3.5%.
• Merchandise Export from India Scheme (MEIS) and Service
Exports from India Scheme (SEIS) launched.
• Higher level of rewards under MEIS for export items with
High domestic content and value addition.
• Chapter-3 incentives extended to units located in SEZs.
• Export obligation under Export Promotion Capital Goods
(EPCG) scheme reduced to 75% to promote domestic
capital goods manufacturing.
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12. Highlights of the FTP 2015-20
• FTP to be aligned to Make in India, Digital India and Skills India
initiatives.
• Duty credit scrips made freely transferable and usable for
payment of custom duty, excise duty and service tax.
• Export promotion mission to take on board state Governments
• Unlike annual reviews, FTP will be reviewed after two-and-Half
years.
• Zero Defect products with a focus on quality and standards
• Lower tariff on inputs and raw material
• Develop trade infrastructure
• Higher level of support for export of defence, pharma, farm
produce and eco-friendly products.
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14. Foreign Trade Policy
• Legal Framework and Trade facilitation
• General Provisions of EXIM
• MEIS / SEIS scheme
• Duty exemption Scheme (Chapter 4 of FTP)
• EPCG Scheme
• EOU Schemes
• Deemed Exports
• Trade disputes
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15. Overview
• Simplification of multiple schemes to MEIS and SEIS.
• Shift from subsidy to incentive. The policy is a reflection of
gradual shift from incentive based to a reward based one.
• Emphasis on market diversification
• States to emphasis on the export infrastructure as they get
more autonomy in export promotion
• Emphasis on value-added products
• WTO obligations to phase out export subsidies
• Improving FTAs utilization in trade
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16. Overview
• FTP 2015-20 provides a framework for increasing exports of
goods and services as well as generation of employment
and increasing value addition in the country, in line with the
“Make in India”, “Digital India” and “Skill India” programs.
• To arrest the declining trends of exports.
• To encourage exports through a mix of measures including
rationalization and efforts for enhanced market access
across the world and diversification of export markets.
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17. Overview
• Employment creation in manufacturing and services
• Zero defect products with focus on quality and standards
• Stable agricultural trade policy encouraging import of raw
material where required export of processed products
• Focus on higher value addition and technology infusion
• Lower tariffs on inputs and raw materials
• Development of trade infrastructure and provision of
production and export incentives
• Policy review to happen once in 2.5 years instead of every
year
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18. Merchandise Exports from India Scheme (MEIS)
• MEIS is a major export promotion scheme, which seeks to
promote export of notified goods manufactured/produced in
India.
• Currently it covers 7,914 tariff lines.
• MEIS replaces five different schemes – Focus product
scheme, focus market scheme, agri-infra incentive scrip,
Vishesh Krishi and Gram Udyog Yojana
• MEIS incentives are available at 2, 3 and 5 per cent of the
free on board (FOB) value of exports.
• The incentives are issued as duty scrips that can be used for
payment of a number of duties/taxes including the
customs/excise duty/service tax.
• https://www.dgft.gov.in/CP/?opt=meis
20. Service Exports from India Scheme (SEIS)
• A scheme designed to provide rewards to
exporters to offset infrastructural inefficiencies
and associated costs.
• Service exports extend to sectors such as
telecom, entertainment, logistics, accounting
and healthcare over and above ITES.
• The rate of reward under SEIS would be
based on net foreign exchange earned
21. Export Promotion Capital
Goods (EPCG) scheme
EPCG scheme allows import of capital goods including spares
for pre production, production and post production at zero
customs duty subject to an export obligation of 6 times of duty
saved on capital goods imported under EPCG scheme, to be
fulfilled in 6 years reckoned from Authorization issue date.
https://www.indiantradeportal.in/vs.jsp?lang=0&id=0,55,286
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22. Duty Credit Scrips
• It is a pass that allows the holder to import commodities by
not paying a specified amount in import duties.
• It is given to the exporter on attaining a certain amount of
exports
• Following are the main features of duty credit scrip:
o They are issued to exporters.
o The scrip allows duty deduction (non-payment of taxes) of a specified
amount in the scrip.
o The scrip value or tax reduction is expressed as a percentage of
export turnover of the exporter.
o The scrip value usually varies between 3 per cent to 5 per cent under
Foreign Trade Policy 2015.
Source: http://www.indianeconomy.net/splclassroom/16/what-is-duty-
credit-scrip/#sthash.gOthKAYu.dpuf
23. Duty credit scrips
Duty credit scrips to be freely transferable and usable for
payment of custom duty, excise duty and service tax. (a)
All scrips issued under MEIS and SEIS and the goods
imported against these scrips would be fully transferable.
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24. Deemed Exports
"Deemed Exports" refers to those transactions in which the goods
supplied do not leave the country and the payment for such supplies
is received either in Indian rupees or in free foreign exchange.
Supply of goods to
1. Export Oriented Units (EOU).
2. Special Economic Zones (SEZ)
3. Software Technology Parks (STP)
4. Electronic Hardware Technology Parks (EHTP)
5. Bio-technology parks (BTP)
6. Projects financed by multilateral or bilateral agencies/funds as
notified by the Department of Economic Affairs
Etc.
Source: http://dgftcom.nic.in/
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25. Categories of Goods
• Freely Traded Goods (95% of goods)
• Restricted Goods
(4% of goods)
• Canalized Goods
• Prohibited Goods (1% of goods)
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26. Freely Traded Goods
• These goods require any specific trade permissions
though they have to comply with norms and rules
applied to similar goods that are domestically produced
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27. Restricted Goods
• These goods can be exported or imported only with a
licence, in accordance with regulations governing in
this behalf.
• Certain items which cannot be freely traded because of
reasons such as security and can be imported against
permission in accordance with the procedure
prescribed.
• E.g. fire arms, certain fruits and vegetables, certain
animal products
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28. Canalized Goods
• The exclusive privilege of trade is granted by State
Trading Enterprises (STEs) for such items. Private
individuals are not allowed to trade in these items
• E.g. petroleum products, bulk agricultural products
such as vegetable oils, pharmaceutical products
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29. Prohibited Goods
• Banned for trade
• These items cannot be imported or exported
E.g. Antiques, narcotic drugs, exotic birds, wood
and wood products such as logs, timber, pulp,
charcoal etc.
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Forms – ANF – Aayat Niryat Forms
Specific provisions prevail over general provisions
DGFT is governing and facilitating trade
Trade infrastructure - Setting up and up-gradation of infrastructure projects with overwhelming export linkages like the Border Haats, Land customs stations, quality testing and certification labs, cold chains, trade promotion centres, dry ports, export warehousing and packaging, SEZs and ports/airports cargo terminuses. First mile connectivity projects related to export logistics will also be considered
Trade Infrastructure Export Scheme ( launched in 2017)
https://commerce.gov.in/press-releases/launch-of-trade-infrastructure-for-export-scheme-ties/
Trade facilitation agreement -
(WTO) - https://www.tfafacility.org/trade-facilitation-agreement-enters-force
(OECD) - https://www.oecd.org/trade/topics/trade-facilitation/
To check on the site
Compare your country: trade facilitation
Trade facilitation policy simulator
Free on Board - In international shipping, for example, “FOB [name of originating port]” means that the seller (consignor) is responsible for transportation of the goods to the port of shipment and the cost of loading. The buyer (consignee) pays the costs of ocean freight, insurance, unloading, and transportation from the arrival port to the final destination. The seller passes the risk to the buyer when the goods are loaded at the originating port.
Metals & Minerals Trading Corporation of India (MMTC), State Trading Corporation of India (STC), Project & Equipment Corporation of India (PEC)