Foreign Trade Policy Highlights

For the first time, the government terminated the five-year Exim Policy, 2002-07 and replaced it with Foreign Trade Policy (FTP) for a term of five-year starting the fiscal year on the 31st August 2004. It takes an integrated view of the overall development of the country's foreign trade.

Strategy

The objective of Foreign Trade Policy is of two-fold:

• To make India's percentage share of global merchandisre trade double by 2009; and
• To act as an effective instrument of economic growth by giving a thrust to employment generation, especially in semi-urban and rural areas.

The key strategies are of FTP are:

• Unshackling of controls;
• Creating an atmosphere of trust and transparency;
• Simplifying the procedures and bringing down transaction costs;
• Adopting the fundamental principle that duties and levies should not be exported;
• Special Focus Initiatives

Those sectors which have significant export prospects abreast of potential for employment generation in the semi-urban and rural areas have been identified as the thrust sectors. For these areas, special sectoral strategies have been prepared.

Further, from time to time, sectoral initiatives in other sectors will be announced. Currently Special Focus Initiatives have been prepared for the agriculture, gems & jewellery, and leather & footwear sectors.

Package for Agriculture

The Special Focus Initiative for Agriculture are as follows:

A new scheme, Vishesh Krishi Upaj Yojana is introduced to boost exports of fruits, vegetables, flowers, minor forest produce and the value added products of these.

Duty free import of capital goods under EPCG scheme.

The import of seeds, bulbs, tubers and planting material has been liberalised.

Gems & Jewellery

The consumables for metals other than gold and platinum is allowed to be imported duty free up to 2% of FOB value of exports.

Duty free re-import entitlement for rejected jewellery is allowed up to 2% of FOB value of exports.
The import of gold of 18 carat and above shall be allowed under replenishment scheme.

Leather and Footwear

For leather industry, duty free entitlements of import trimmings, embellishments and footwear components is increased to 3% of FOB value of exports.

For specified items for leather sector, duty free import increased to 5% of FOB value of exports. The machinery and equipment for effluent treatment plants for the leather industry shall be exempt from customs duty.


Export Promotion Schemes

Target Plus :
Target Plus, a new scheme is introduced to accelerate growth of exports.

Exportes having achieved a quantum growth in exports will be entitled to a duty free credit based on incremental exports, substantially higher than the general actual export target fixed.

Based on the tiered approach, rewards will be granted. For the incremental growth of more than 20%, 25% and 100%, the duty free credits will be 5%, 10% and 15% of FOB value of incremental exports.

Vishesh Krishi Upaj Yojana :
One more new scheme, Vishesh Krishi Upaj Yojana (Special agricultural produce scheme) is introduced to boost exports of fruits, vegetables, flowers, minor forest produce and their value added products. The export of the mentioned products shall qualify for duty free credit entitlement equivalent to 5% of FOB value of exports. The entitlement is transferable freely and can be used for import of a variety of inputs and goods.

'Served from India' Scheme :
To accelerate growth in export of services in order to create a powerful and unique 'Served from India' brand which will be instantly recognised and respected the world over.

Individual service providers earning foreign exchange of at least Rs. 5 lakh, and Rs. 10 lakh for other service providers will be eligible for a duty credit entitlement of 10% of total foreign exchange earned by them.

For stand-alone restaurants and for hotels, the entitlement shall be 20% and 5% respectively.

Hotels and restaurants may use their duty credit entitlement for import of food items and alcoholic beverages.

Import of Second-Hand Capital Goods

The imports of second-hand capital goods to be permitted without any age restrictions.

The minimum depreciated value for plant and machinery is to be re-located.

Common Facilities Centre

Government to promote the establishment of the common facility centres for the use by home-based service providers, especially in the fields of engineering & architectural design, multi-media operations, software developers etc., in State and District-level towns, to draw in a vast multitude of home-based professionals into the services export arena.

Quality Policy
DGFT shall be a business-driven, transparent, corporate oriented organization.

Exporters can file digitally signed applications and use Electronic Fund Transfer Mechanism for paying application fees.

All the DGFT offices shall be connected via a central server making the application processing faster. DGFT HQ has obtained ISO 9000 certification.