c





  c 


  










  

c

 

‡Legal mandate-Sec 5 of FTDR Act 1992
‡Para 2.4 of FTP gives powers to O/o DGFT to lay down
procedures for import/export
‡FTDR 1992 replaced the earlier Act called Import and
Export (Control) Act 1947
‡Frame work for Development and Regulation of Foreign
Trade by facilitating imports into the country and taking
measures to increase export from India and any other
related matters
‡Under FTDR ,FTP is formulated and implemented
c
‡ IEC number mandatory for import/export
‡ License or authorization
‡ Search and seizure and penalties appellate provisions
‡ FTDR rules 1993
c

 

‡ Earlier yearly policies and then 3 year policy ,now 5 year
policy 2004-2009
‡ Preamble-primary objective of trade is not earning of
more foreign exchange but to generate greater economic
activity for an all around development of the country.
Based on this belief, FTP has laid down two major
objectives :
‡ To double India¶s percentage share of global merchandise trade within
the next five years.
‡ To Act as an effective instrument of economic growth by giving a
thrust to employment generation. Some of the areas under specific
thrust of the present FTP are agriculture, handicrafts, gems and
jewelry, handloom, leather and marine sector.
c

 

‡In 2004 our exports were around 63 billion USD and in
2007-2008 we have exceeded 155 billion USD (2 ½
times)
‡For 2008-09 projection was USD 400 billion (Total
merchandise trade) and USD 525 billion including
services
-Total trade in goods and services is around 50% of GDP.
-In 4 years 136 lakh new jobs were created
(source FTP 2004-09 foreword By Commerce Minister)
c


 
‡ All export and import is generally free without any control
of Government with some exceptions
‡ FTP released by office of DGFT normally has 3 important
publications:
± Foreign Trade Policy.
± Handbook of procedures
± ITC (HS) classification-items at 8 digit level-free restricted and
state enterprise
c


 



‡ IEC to be issued by DGFT offices (some exempt categories)
‡ IEC application with PAN no., banker certificate and
statutory declaration
‡ Application ± to DGFT offices
‡ RCMC if any export benefits are required
Ê


   

‡Export Promotion Capital Goods Scheme (EPCG).

‡Duty Exemption/remission Scheme (DES).
‡Export Oriented Unit Scheme (100% EOU Scheme).
‡Special Economic Zone (SEZ Scheme).
‡Status Holder Scheme.
Ê


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‡Import of Capital Goods (CG) at concessional basic

customs duty of only 3%
‡Export obligation equivalent to 8 times of duty saved on
import of CG. (5 times for agro, cottage and tiny sector
and 6 times for SSI)
‡Export obligation is required to be fulfilled within 8
years (extendable to 12 years)
 Ê   
 
‡Duty Exemption Schemes -import of inputs and raw
materials required for exports, are allowed duty free, for use
in the export production. AAS and DFIA
‡Duty Remission Scheme -remission of duty on the inputs
used in the export production after the exports DEPB and
DBK
‡AAS-called advance license earlier. permits duty free import
(basic custom duty, additional custom duty, education cess,
anti dumping duty and safe guard duty) on inputs after a/c for
wastages .
‡SION (any example)
c$% Ê
&
‡DFIA similar to AAS but with one major difference only i.e.
after E.O. is fulfilled authorization or material imported
against is transferable whereas in AAS it is with AU
condition.
‡DEPB- to neutralize the incidence of custom duty on the
imports contained in the export product
‡DEPB rates notified by DGFT
‡DEPB rate is expressed as a % age of FOB
‡DEPB credit used to pay basic and additional customs duty
(scheme up to may 2009)
‘ 
 
‡DBK- Draw back rate are fixed by the Customs Departments
on all India basis (New rates from 1/09/2008)-1300 products
‡Very popular scheme. DEPB and DBK compete with each
other. In DEPB it is credit and in DBK it is cash.
‡100% EOU scheme- provide duty free and control free
regime of export production without putting any restrictions
about location of the unit (many benefits like exemption from
IT,100% earnings in EEFC,50% sales in DTA)
‘ 
 
‡ SEZ scheme-under SEZ Act 2005
‡ basically a foreign territory within the country, as far as
different taxes and duties are concerned (lots of benefit)
‡ Status Scheme-Export House, Star Export House, Trading
House, Star Trading House and Premier Trading House ±
policy allows certain benefits
Ê
 $


   
‡ Export policy ±part of FTP-8 digit classification-free
,restricted and state enterprise-conditions on exports
‡ Imports-with WTO ±MFN and NT clauses
‡ Imports subject to all domestic laws like hazardous wastes
(Amendment) Rules 2003, Standards of Weights and
Measures, (Package Commodities) Rules 1977, standards
enforced by Bureau of Indian Standards (BIS) ±presently
68 items, Meat Food Products Order 1973, Prevention of
Food Adulteration Act (PFA Act) etc.
Ê$ c
‡All 34 offices are fully computerised and connected
‡EDI fully functional with custom offices
‡50,000 DEPB scrips and around 1,00,000 AA¶s issued
totally upon online filing of applications
‡Digital signature and EFT functioning for last 4 years
‡DEPB and AA and shipping bills online transferred
between DGFT and customs offices.
‡Linking with banks is at fairly advanced stage and with
that imports/exports can be paperless.
‘
‡ WTO came in existence in 1995
‡ Trade in open and transparent manner-4 pillars.
‡ Protection only through tariffs, continuous reduction in
tariffs, MFN and NT
‡ QR removal started
6   
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‡ Edible products of wild animals
‡ Other products of wild animals
‡ Feathers
‡ Ossein & bones
‡ Ivory powder
‡ Sinews & tendons
‡ Fats of bovine animals
‡ Fish liver oil (other than cod liver)
‡ Animal Enzymes (rennet)
‡ Tiger, cat & fur skins
‡ Worked ivory
‡ Domestic & wild birds
‡ Beef , unprocessed pig meat products

 


!

‡ Live Animals & Fish
‡ Animal Products
‡ Edible offal
‡ Meat of bovine animals
‡ Turtle eggs, birds nest
‡ Worked tortoise shell, pearl, bone, coral
‡ Stuffed animals, birds
‡ Plant Products
‡ Fresh & chilled potatoes
‡ Seeds of spice plants, fruits & peas
‡ Fresh ginger
‡ Cereals & oilseeds of seed quality
‡ Poppy & Opium
‡ Sandalwood
Ê$


‡ Cereals
‡ Wheat
‡ Rye
‡ Oats
‡ maize
‡ Copra/ Coconut
‡ Petroleum oils
‡ Boiling point spirits
‡ Natural gasolene liquid
‡ Superior kerosene oil (SKO)
‡ Aviation turbine fuel (ATF)
‡ Urea
 



Scheme India¶s export share

Advance Authorisation 15%

DEPB 30%

Duty Drawback Around 30%

EOU/ EHTP/ SEZ 18%

%!(
‡ Prohibited subsidies
‡ Contingent upon export performance
‡ Contingent upon the use of domestic over imported goods.
‡ Exception: Exemption or remission of duty on the inputs
(which are physically incorporated or Oil, fuel, energy,
catalyst) used in the export production permitted.
c

 
 
 
‡ Advance Authorisation:
‡ compatible and defensible since it exempts duty on
inputs used in export production
‡ DFRC:
‡ Problem with transferability but can be argued from
the angle of remission
‡ DEPB:
‡ Major issue is of non proof of use of imported inputs
in export production (is a notional remission)
c

 
 
 
‡ EPCG:
‡ Capital goods are not considered as inputs
‡ Duty concession is contingent on export performance
‡ The new scheme has no nexus and permits export of
alternate goods
‘ 

 
( 
‡ Increase in customs duty within bound rates
‡ Anti-dumping/Anti-subsidy/safeguard measures
etc.
‡ NPM/ NTMs
‡ Standards

 Ê  
) 
‡ With recession looming large, increasingly nations turning
to economic nationalism
‡ Economic Nationalism ± the urge to keep jobs and capital
at home, closing economy so as to protect the interests of
the nation
‡ Potential to push the world into depression( Reed smoot
and Hawley¶s protectionist policies in 1930¶s pushed
America further into depression)
‡ Threat to International trade & globalized economy
promoted by WTO
 Ê  ) 
*


$
 

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‡ May impose restriction on availability and access to

foreign finance sources (as grip of nationalism is tightest in
banking)
± In France & Britain, politicians demanding that banks
given bailout packages must lend at homeordomestic
borrowers
‡ May impose restrictions on access to offshore labour
market and affect outsourcing
± Britain demand for ³ British Jobs for British workers´
± France : 1 million workers stayed away from work on
29th Jan demanding jobs be provided only to domestic
workers
± US has imposed restrictions on hiring on HB1 Visa,
Britain has also imposed similar restrictions
 Ê  ) 
*


$
 

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‡ May severely affect foreign trade

± µ Buy American µ - Demand for use of American materials only in
public works in the $ 800 billion stimulus package- likely to affect
emerging countries
± World trade likely to shrink for the first time since 1982
± Net private sector capital flows to the emerging markets likely to
fall to $165 billion from a prak of $929 billion in 2007
± IMF says world growth to grind at a virtual halt
± World growth is projected to fall to just ½ percent in 2009(when measured
in terms of purchasing power parity). , its lowest rate in 60 years (source
IMF µs Update to its 
   
  released on January 28 )
± World bank estimates puts it to 0.9%
± Global growth is projected to rebound in 2010 to 3.0 percent
!  
‡ The Foreign Trade policy especially of developing countries have
undergone drastic changes since WTO came into existence
‡ Opening of world trade and end to tariffs and barriers
‡ Foreign Trade increased by leaps n bounds especially of India & China
‡ Integration of world markets has led the world economy bear the
brunt of the US Recession
‡ Rise of Economic Nationalism may threaten the world with depression
‡ Need for stronger international policy response to the crisis
‡ Banking sector must be unclogged to get economies moving again
‡ What is required is co-ordination among nations(Foreign Trade Policy
responses) , forbearance(embracing of open markets even if some
foreigners will benefit) and greater role of multilateral organizations.
$
'

‡ www.nic.in/eximpol -official website of DGFT

‡ www.commin.nic.in ±official website of Ministry of
Commerce
‡ www.ieport.com ±a comprehensive website giving
everything new on imports and exports. All notifications/
PNs/clarifications etc by DGFT/CBEC/RBI and latest news
about foreign trade are available at this site
  —