FTP - 2

Foreign Trade Policy : 

Foreign Trade Policy 18 April 2010

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% : 

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) : 

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 : 

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 : 

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 : 

Digital automation target#All Export transactions would be through EDI mode by 31st October, 2005;# Digital Signature and EFT facility operational

India’s 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 : 

India’s 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

Indian Exports 2008-09 : 

Indian Exports 2008-09

Indian Imports 2008-09 : 

Indian Imports 2008-09

Incorporating a legal entity Proprietorship& In India [ROC] Partnership Concern Trade Licence [State Departments]Permanent Acccount Number Bank Certificate [PAN by Income Tax Dept.] [from the concerned Bank]   Importer-Exporter Code Number[DGFT]  EXPORTS IMPORTS Nature of Restriction [HS] Classification  Free List items Negative List Prohibited Restricted Canalized : 

Incorporating a legal entity Proprietorship& In India [ROC] Partnership Concern Trade Licence [State Departments]Permanent Acccount Number Bank Certificate [PAN by Income Tax Dept.] [from the concerned Bank]   Importer-Exporter Code Number[DGFT]  EXPORTS IMPORTS Nature of Restriction [HS] Classification  Free List items Negative List Prohibited Restricted Canalized

Export Incentives(DOC) : 

Export Incentives(DOC) CENTRAL DUTY REFUND/ NEUTRALISATION/ EXEMPTION SCHEMES Pre- export Post- export Market Development Initiatives INFRA- STRUCTURE Related Sops MDA Grant MAI Grant ASIDE SCHEME TOWNS OF EXPORT EXCELLENCE Additional incentives Linked with Exports Duty exemptions Under Customs Notif. 21/2002 Misc.Incentives Target Plus, Addl. weightage

CENTRAL DUTIES : 

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

SCHEMES : 

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

DTA SCHEMES : 

DTA SCHEMES Pre-Export Post-Export ADVANCE LIC. EPCG DFRC, 2. DEPB DRAWBACK—Phy & D.E. ED 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 Exchange—EEFC)Exporters:-- Physical Vs Merchant : 

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 Exchange—EEFC)Exporters:-- Physical Vs Merchant

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

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

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. 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 : 

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. 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 at concessional rate of 5% duty for pre-production, Production & Post production purposes related to export (Both Physical & deemed)-- E.O. 8 times the duty saved in 8 years; 12 Years;-- Special Dispensation for license with duty saved of Rs 100 crores or above, Agro units, SSI units, BIFR. -- EPCG licence for project import—Reduced E.O.-- Export of alternate product/services allowed-- Special package for agro units in the AEZ : 

EPCG Scheme--Import of capital goods at concessional rate of 5% duty for pre-production, Production & Post production purposes related to export (Both Physical & deemed)-- E.O. 8 times the duty saved in 8 years; 12 Years;-- Special Dispensation for license with duty saved of Rs 100 crores or above, Agro units, SSI units, BIFR. -- EPCG licence for project import—Reduced E.O.-- Export of alternate product/services allowed-- Special package for agro units in the AEZ

DFRC SCHEME--Post export scheme based on (Bill of Export) both against Physical & Deemed exports;--Min. 25% V.A, Certain sensitive items with technical specification allowed;--Freely transferable certificate; 24 months valid--Fuel allowed to be transferred to marketing agencies authorized by Ministry of P&NG--Facility of CENVAT credit or drawback--Only basic customs duty exemption at the time of imports : 

DFRC SCHEME--Post export scheme based on (Bill of Export) both against Physical & Deemed exports;--Min. 25% V.A, Certain sensitive items with technical specification allowed;--Freely transferable certificate; 24 months valid--Fuel allowed to be transferred to marketing agencies authorized by Ministry of P&NG--Facility of CENVAT credit or drawback--Only basic customs duty exemption at the time of imports

DEPB SCHEME-- Post export scheme based on (Bill of Export) -- Freely transferable unless specified;-- Supplies to SEZ units also eligible--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; : 

DEPB SCHEME-- Post export scheme based on (Bill of Export) -- Freely transferable unless specified;-- Supplies to SEZ units also eligible--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 allowed for the CVD paid/debited : 

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 allowed for the CVD paid/debited

SERVICE EXPORTS-- For 161 Tradable services ; New Export Promotion Council for Services-- Served 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: -- Any CAPITAL GOODS, Office Equipments, Furniture and consumables etc -- No Agricultural Product except food items and beverages for the Hotels and Restaurants : 

SERVICE EXPORTS-- For 161 Tradable services ; New Export Promotion Council for Services-- Served 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: -- Any CAPITAL GOODS, Office Equipments, Furniture and consumables etc -- No Agricultural Product except food items and beverages for the Hotels and Restaurants

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 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 -- Import of inputs such as pesticides shall be permitted under the Advance License -- Capital goods imported under EPCG permitted to be installed anywhere in AEZ : 

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 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 -- Import of inputs such as pesticides shall be permitted under the Advance License -- Capital goods imported under EPCG permitted to be installed anywhere in AEZ

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

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

Laws to note : 

Laws to note The foreign trade ( development and regulation ) Act The Foreign Trade Policy 2004-09 The FEMA 2000 RBI Regulations The Customs Act The Central excise Act

Export inspection : 

Export inspection IPQC– In process quality control ISI, AGMARK Fumigation ISO- 9000 & ISO – 14000 EIA SA- 8000 Global compact

Reading FTP : 

Reading FTP The policy The handbook of procedures The ITC- HSN classification Export licenses Import licenses OGL State Trading

EOU : 

EOU Minimum investment of INR 10 million 300 warehousing districts as location Nearly 3000 units in existence New or conversion from DTA Manufacturing & services covered Trading units are not permitted

EOU contd----- : 

EOU contd----- Can subcontract part of production to DTA Can sell upto 50% of production in DTA Can sell to other EOU/ BTP/ EHTP/STP/SEZ and count against EO Exempt from state trading and SSI reservation restrictions 100% EEFC retention

SEZ : 

SEZ Exclusive geography Duty free enclave Sales to DTA permitted Special concessions for promoters Positive EO is required Customs duty, excise duty, service tax and VAT & CST are exempt on supplies to SEZ units

High Tech products promotion scheme : 

High Tech products promotion scheme Appendix 37E goods Duty free scrip equal to 10% incremental export growth Ceiling of INR 150 million Some exports not counted Scrip freely transferable

Focus products scheme : 

Focus products scheme Goods notified in appendix 37D Some exports not counted Duty credit scrip equal to 1.25% of FOB value of exports for each year Scrip transferable

Focus markets scheme : 

Focus markets scheme Notified as per Appendix 37C Duty credit scrip of 2.5% on the FOB value of exports achieved Certain exports not allowed Scrip transferable

Served from India scheme : 

Served from India scheme To promote served from India image Appendix 10 Minimum previous year exports of INR1 million 10% duty credit scrip Scrip transferable within corporate group and not otherwise

Status Holders under the FTP : 

Status Holders under the FTP Export House Rs 20 crores Star export House Rs 100 crores Trading House Rs 500 crores Star Trading House Rs 2500 crores Premier Trading House Rs 10000 crores Benefits allowed to status holders

Excise export concessions : 

Excise export concessions Export without payment of duty Export under claim for duty Procurement of excisable goods for export production without payment of duty Drawback Concessional notifications

WTO/ GATT : 

WTO/ GATT International Treaty Governing Principles MFN Non discrimination National treatment Reduction of tariffs Elimination of Non tariff barriers

Free Trade Agreements : 

Free Trade Agreements NAFTA EU MECOSUR ASEAN SAFTA Indian agreements with Sri Lanka, Thailand and Singapore Implications of FTAs

Importance of Ports in International Trade : 

Importance of Ports in International Trade 70% of international trade is over the seas For India, it is 90% Trade through Air is comparatively very expensive and cannot become a common preference, and is unsuited for heavy, large cargo Many coastal states possess a number of ports

Ports in India : 

Ports in India India has 12 major ports and more than 180 lesser ones India has a coastline of nearly 6000 KMs All ports of India together handled 519 million tons of cargo during the fiscal year ended March 2008 Growth rate of 12% New deep sea ports at Mundra, Pipavav, Vizhinjam, Krishnapatnam, Kakainada, Orissa

Problems of Indian Ports : 

Problems of Indian Ports Limited land area Industries located in hinterland Low channel draft Too many players Inadequate deployment of skill and technology Lack of coordinated approach

Requirements of modern World class port : 

Requirements of modern World class port Skill – Intensive Technology driven, minimal paper work Port is the best when its an industrial complex by itself Quay cranes Crane productivity Fully automated terminals with good quay length

Port stake-holders in India : 

Port stake-holders in India Customs Port Trusts Port Health Organization Plant Quarantine Immigration Terminal operator Vessel operating agent Steamer agent, Mainline operator Container operating agent Stevedore CHA, Exporter, Importer Transport operators Security agencies, External players Core parties Service Agencies

Ports : 

Ports Steamer agent / Mainline operator Container operating agent ( NVOCC, VOCC ) Stevedore CHA / Exporters / Importers Transport operators Security agencies / External players

A comparison : 

A comparison

Dwell time at Indian ports : 

Dwell time at Indian ports