FOREIGN TRADE POLICY OF INDIA (2015-2020)
The Foreign Trade Policy lays down the ground rules and also modifies them for carrying out
the country’s exports and imports. Apart from prescribing general provisions relating to imports and
exports, it also provides special focus initiatives, duty exemption and remission schemes and
promotional measures to help exporters compete in the global marketplace.
There is not much difference between Foreign Trade Policy and EXIM Policy. They are
basically two names for the same policy. It was in 2004 that Commerce and Industry Minister Kamal
Nath decided it would be more appropriate to call the policy the foreign trade policy. He argued that
it was necessary for the policy to go beyond exports and imports and have an integrated approach to
the developmental requirements of India’s foreign trade.
Highlights of Foreign trade policy of India
1. Merchandise Exports from India Scheme (MEIS):
(a) Earlier there were 5 different schemes (Focus Product Scheme, Market Linked Focus Product
Scheme, Focus Market Scheme, Agri. Infrastructure Incentive Scrip, VKGUY) for rewarding
merchandise exports with different kinds of duty scrips with varying conditions (sector specific or
actual user only) attached to their use. Now all these schemes have been merged into a single scheme,
namely Merchandise Export from India Scheme (MEIS) and there would be no conditionality
attached to the scrips is s used under the scheme.
Rewards for export of notified goods to notified markets under ‘Merchandise Exports from India
Scheme (MEIS) shall be payable as percentage of realized FOB value (in free foreign exchange).
Service Exports from India Scheme (SEIS):
a) Served From India Scheme (SFIS) has been replaced with Service Exports from India
Scheme (SEIS). SEIS shall apply to ‘Service Providers located in India’ instead of ‘Indian
Service Providers’. Thus SEIS provides for rewards to all Service providers of notified
services, who are providing services from India, regardless of the constitution or profile of
the service provider.
2. Incentives (MEIS & SEIS) to be available for SEZs:
It is now proposed to extend Incentives (MEIS & SEIS) to units located in SEZs also.
3. Duty credit scrips to be freely transferable and usable for payment of custom duty, excise
duty and service tax:
All scrips issued under MEIS and SEIS and the goods imported against these scrips would be
fully transferable.
Scrips issued under Exports from India Schemes can be used for the following:-
Payment of customs duty for import of inputs / goods.
Payment of excise duty on domestic procurement of inputs or goods.
Payment of service tax on procurement of services.
4. Status Holders:
Business leaders who have excelled in international trade and have successfully contributed to
country’s foreign trade are proposed to be recognized as Status Holders and given special treatment
and privileges to facilitate their trade transactions, in order to reduce their transaction costs and time.
5. Boost to Make in India initiative.
1. Reduced Export Obligation (EO) for domestic procurement under EPCG scheme: Specific
Export Obligation under EPCG scheme, in case capital goods are procured from indigenous
manufacturers, which is currently 90% of the normal export obligation (6 times at the duty saved
amount) has been reduced to 75%, in order to promote domestic capital goods manufacturing
industry.
2. Higher level of rewards under MEIS for export items with high domestic content and value
addition.
It is proposed to give higher level of rewards to products with high domestic content and
value addition, as compared to products with high import content and less value addition.
3. Online filing of documents/ applications and Paperless trade in 24×7 environment:
(a) DGFT already provides facility of Online filing of various applications under FTP by the
exporters/ importers. However, certain documents like Certificates issued by Chartered Accountants/
Company Secretary / Cost Accountant etc. have to be filed in physical forms only. In order to move
further towards paperless processing of reward schemes, it has been decided to develop an online
procedure to upload digitally signed documents by Chartered Accountant / Company Secretary / Cost
Accountant. In the new system, it will be possible to upload online documents like annexure attached
to ANF 3B, ANF 3C and ANF 3D, which are at present signed by these signatories and submitted
physically.
(b) Henceforth, hardcopies of applications and specified documents would not be required to
be submitted to RA, saving paper as well as cost and time for the exporters. To start with,
applications under Chapter 3 & 4 of FTP are being covered (which account for nearly 70% of total
applications in DGFT). Applications 8 under Chapter-5 would be taken up in the next phase. (c) As a
measure of ease of doing business, landing documents of export consignment as proofs for notified
market can be digitally uploaded in the following manner:-
(i) Any exporter may upload the scanned copy of Bill of Entry under his digital signature.
(ii) Status holders falling in the category of Three Star, Four Star or Five Star Export House
may upload scanned copies of documents.
4. Online inter-ministerial consultations:
It is proposed to have online inter –ministerial consultations for approval of export of
SCOMET items, Norms fixation, Import Authorizations, Export Authorization, in a phased manner,
with the objective to reduce time for approval. As a result, there would not be any need to submit
hard copies of documents for these purposes by the exporters.
5. Simplification of procedures/processes, digitisation and e-governance:
(a) Under EPCG scheme, obtaining and submitting a certificate from an independent
Chartered Engineer, confirming the use of spares, tools, refractory and catalysts imported for final
redemption of EPCG authorizations has been dispensed with.
(b) At present, the EPCG Authorisation holders are required to maintain records for 3 years
after redemption of Authorisations. Now the EPCG Authorization Holders shall be required to
maintain records for a period of two years only. Government’s endeavour is to gradually phase out
this requirement as the relevant records such as Shipping Bills, e- BRC are likely to be available in
electronic mode which can be archived and retrieved whenever required.
(c) Exporter Importer Profile: Facility has been created to upload documents in
Exporter/Importer Profile. There will be no need to submit copies of permanent records/ documents
(e.g. IEC, Manufacturing license, RCMC, PAN etc.) repeatedly with each application, once uploaded.
(d) Communication with Exporters/Importers: Certain information, like mobile number, email
address etc. has been added as mandatory fields, in IEC data base. This information once
provided by exporters.
The Foreign Trade Policy lays down the ground rules and also modifies them for carrying out
the country’s exports and imports. Apart from prescribing general provisions relating to imports and
exports, it also provides special focus initiatives, duty exemption and remission schemes and
promotional measures to help exporters compete in the global marketplace.
There is not much difference between Foreign Trade Policy and EXIM Policy. They are
basically two names for the same policy. It was in 2004 that Commerce and Industry Minister Kamal
Nath decided it would be more appropriate to call the policy the foreign trade policy. He argued that
it was necessary for the policy to go beyond exports and imports and have an integrated approach to
the developmental requirements of India’s foreign trade.
Highlights of Foreign trade policy of India
1. Merchandise Exports from India Scheme (MEIS):
(a) Earlier there were 5 different schemes (Focus Product Scheme, Market Linked Focus Product
Scheme, Focus Market Scheme, Agri. Infrastructure Incentive Scrip, VKGUY) for rewarding
merchandise exports with different kinds of duty scrips with varying conditions (sector specific or
actual user only) attached to their use. Now all these schemes have been merged into a single scheme,
namely Merchandise Export from India Scheme (MEIS) and there would be no conditionality
attached to the scrips is s used under the scheme.
Rewards for export of notified goods to notified markets under ‘Merchandise Exports from India
Scheme (MEIS) shall be payable as percentage of realized FOB value (in free foreign exchange).
Service Exports from India Scheme (SEIS):
a) Served From India Scheme (SFIS) has been replaced with Service Exports from India
Scheme (SEIS). SEIS shall apply to ‘Service Providers located in India’ instead of ‘Indian
Service Providers’. Thus SEIS provides for rewards to all Service providers of notified
services, who are providing services from India, regardless of the constitution or profile of
the service provider.
2. Incentives (MEIS & SEIS) to be available for SEZs:
It is now proposed to extend Incentives (MEIS & SEIS) to units located in SEZs also.
3. Duty credit scrips to be freely transferable and usable for payment of custom duty, excise
duty and service tax:
All scrips issued under MEIS and SEIS and the goods imported against these scrips would be
fully transferable.
Scrips issued under Exports from India Schemes can be used for the following:-
Payment of customs duty for import of inputs / goods.
Payment of excise duty on domestic procurement of inputs or goods.
Payment of service tax on procurement of services.
4. Status Holders:
Business leaders who have excelled in international trade and have successfully contributed to
country’s foreign trade are proposed to be recognized as Status Holders and given special treatment
and privileges to facilitate their trade transactions, in order to reduce their transaction costs and time.
5. Boost to Make in India initiative.
1. Reduced Export Obligation (EO) for domestic procurement under EPCG scheme: Specific
Export Obligation under EPCG scheme, in case capital goods are procured from indigenous
manufacturers, which is currently 90% of the normal export obligation (6 times at the duty saved
amount) has been reduced to 75%, in order to promote domestic capital goods manufacturing
industry.
2. Higher level of rewards under MEIS for export items with high domestic content and value
addition.
It is proposed to give higher level of rewards to products with high domestic content and
value addition, as compared to products with high import content and less value addition.
3. Online filing of documents/ applications and Paperless trade in 24×7 environment:
(a) DGFT already provides facility of Online filing of various applications under FTP by the
exporters/ importers. However, certain documents like Certificates issued by Chartered Accountants/
Company Secretary / Cost Accountant etc. have to be filed in physical forms only. In order to move
further towards paperless processing of reward schemes, it has been decided to develop an online
procedure to upload digitally signed documents by Chartered Accountant / Company Secretary / Cost
Accountant. In the new system, it will be possible to upload online documents like annexure attached
to ANF 3B, ANF 3C and ANF 3D, which are at present signed by these signatories and submitted
physically.
(b) Henceforth, hardcopies of applications and specified documents would not be required to
be submitted to RA, saving paper as well as cost and time for the exporters. To start with,
applications under Chapter 3 & 4 of FTP are being covered (which account for nearly 70% of total
applications in DGFT). Applications 8 under Chapter-5 would be taken up in the next phase. (c) As a
measure of ease of doing business, landing documents of export consignment as proofs for notified
market can be digitally uploaded in the following manner:-
(i) Any exporter may upload the scanned copy of Bill of Entry under his digital signature.
(ii) Status holders falling in the category of Three Star, Four Star or Five Star Export House
may upload scanned copies of documents.
4. Online inter-ministerial consultations:
It is proposed to have online inter –ministerial consultations for approval of export of
SCOMET items, Norms fixation, Import Authorizations, Export Authorization, in a phased manner,
with the objective to reduce time for approval. As a result, there would not be any need to submit
hard copies of documents for these purposes by the exporters.
5. Simplification of procedures/processes, digitisation and e-governance:
(a) Under EPCG scheme, obtaining and submitting a certificate from an independent
Chartered Engineer, confirming the use of spares, tools, refractory and catalysts imported for final
redemption of EPCG authorizations has been dispensed with.
(b) At present, the EPCG Authorisation holders are required to maintain records for 3 years
after redemption of Authorisations. Now the EPCG Authorization Holders shall be required to
maintain records for a period of two years only. Government’s endeavour is to gradually phase out
this requirement as the relevant records such as Shipping Bills, e- BRC are likely to be available in
electronic mode which can be archived and retrieved whenever required.
(c) Exporter Importer Profile: Facility has been created to upload documents in
Exporter/Importer Profile. There will be no need to submit copies of permanent records/ documents
(e.g. IEC, Manufacturing license, RCMC, PAN etc.) repeatedly with each application, once uploaded.
(d) Communication with Exporters/Importers: Certain information, like mobile number, email
address etc. has been added as mandatory fields, in IEC data base. This information once
provided by exporters.
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