A REPORT

ON
INDIAN EXPORTS
















SUBMITTED BY:

GROUP 7 SECTION C PGDM (2013-15)
PRACHI PANDE (13DM129)
PRANAV KESARI (13DM131)
PRATEEK MALL (13DM136)
PRIYA GARG (13DM139)
RACHIT KURANI (13DM143)
RITIKA MAHAJAN (13DM150)
SUBMITTED TO:

PROF. POOJA MISHRA
INTRODUCTION
India is looked upon as a country with immense resources available through its length and breadth. By the
time India gained Independence from the British in 1947, the economy was entirely geared to only trade.
There were hardly any manufacturing facilities to suffice the needs of the growing Indian population. The
past couple of decades in the history of Indian Trade have seen the country struggle to create manufacturing
capacities across the board to be self-sufficient. The government has been focusing on the same to enable
broad basing the development to move the economy from an underdeveloped status to being a developed
nation.
India today stands at an over a trillion economy. Darjeeling tea, Indian khadi cotton, Bombay Duck,
Kashmiri carpets, Indian spices and dry fruit are just a few of the famous gifts India has given to the world.
The economic levels have improved in the urban and semi-urban areas. With economic reforms,
globalization of the Indian economy has been the guiding factor in formulating the trade policies. The
reform measures introduced in the subsequent policies have focused on liberalization, openness and
transparency. They have provided an export friendly environment by simplifying the procedures for trade
facilitation.

Imports and Exports:
'Imports' means, bringing into India, of goods from a place outside India. In other words, it refers to the
goods which are produced abroad by foreign producers and are used in the domestic economy in order to
cater to the needs of the domestic consumers. India includes the territorial waters of India which extend upto
12 nautical miles into the sea to the coast of India.
'Exports' of goods means, taking goods out of India to a place outside India. It refers to the goods which are
produced domestically and are used to cater to the needs of the consumers in other countries. The country
which is purchasing the goods is known as the importing country and the country which is selling the goods
is known as the exporting country. The traders involved in such transactions are importers and exporters
respectively.
Net Exports, is the value of a country's total exports minus the value of its total imports. It is used to
calculate a country's aggregate expenditures, or GDP, in an open economy.
In India, exports and imports are regulated by the Foreign Trade (Development and Regulation) Act, 1992,
which replaced the Imports and Exports (Control) Act 1947, and gave the Government of India enormous
powers to control it. The salient features of the Act are as follows:-
It has empowered the Central Government to make provisions for development and regulation of
foreign trade by facilitating imports into, and augmenting exports from India and for all matters
connected therewith or incidental thereto.
The Central Government can prohibit, restrict and regulate exports and imports, in all or specified
cases as well as subject them to exemptions.
It authorizes the Central Government to formulate and announce an Export and Import (EXIM)
Policy and also amend the same from time to time, by notification in the Official Gazette.
It provides for the appointment of a Director General of Foreign Trade by the Central Government
for the purpose of the Act. He shall advise Central Government in formulating export and import
policy and implementing the policy.
Under the Act, every importer and exporter must obtain a 'Importer Exporter Code Number' (IEC)
from Director General of Foreign Trade or from the officer so authorised.
The Director General or any other officer so authorised can suspend or cancel a licence issued for
export or import of goods in accordance with the Act. But he does it after giving the licence holder a
reasonable opportunity of being heard.

Besides the Foreign Trade (Development and Regulation) Act, there are some other laws which control the
export and import of goods. These include:-
Tea Act,1953
Coffee Act, 1942
The Rubber Act, 1947
The Marine Products Export Development Authority Act, 1972
The Enemy Property Act, 1968
The Export (Quality Control and Inspection) Act, 1963
The Tobacco Board Act, 1975

INDIAN EXPORT OVER THE YEARS
Exports in India decreased to 27270.97 USD Million in October of 2013 from 27679.33 USD Million in
September of 2013. Exports in India is reported by the Ministry of Commerce and Industry, India. From
1957 until 2013, India Exports averaged 3703.0 USD Million reaching an all time high of 30849.7 USD
Million in March of 2013 and a record low of 59.0 USD Million in June of 1958. Indias main exports are
engineering goods (19 percent of total exports), gems and jewellery (15 percent), chemicals (13 percent),
agricultural products (9 percent) and textiles (9 percent). India is also one of Asias largest refined product
exporters with petroleum accounting for around 18 percent of total exports. Indias main export partners are
United Arab Emirates (12 percent of total exports) and United States (11 percent). Others include: China,
Singapore, Hong Kong and Netherlands.

EXPORT DATA OF INDIA FROM 2003 TO 2013

































FOREIGN TRADE PERFORMANCE OF INDIA

Indias Exports, Imports and Balance of Trade:
The global slowdown had its impact on the economy of almost all the countries, including India.
The trade deficit abruptly increased from 356448 crores in 2007-08 to 533681 crores in 2008-09, an increase
by almost 50 %. However, it was less by 2.9 % in 2009-10, to be increased again by 4.3 % in 2010-11. As
such Indias trade deficit stood at Rs. 518202 crores during 2009-10 with values of exports and imports at
Rs. 845534 crores and Rs. 1363736 crores respectively. However, as may be seen from Table 3.1 below that
the position was different in 2010-11 as the trade deficit had increased to Rs. 540545 crores with values of
exports and imports as Rs. 1142922 crores and Rs. 1683467 crores respectively.


Indias imports in 2010-11 was Rs. 1683467 crores compared to Rs. 1363736 crores in 2009-10,
resulting in a positive growth of import (23.45%), although it was negative growth ( 0.78%) during 2009-
10. Along with this positive growth in imports, the exports also grew significantly (35.17%) during 2010-11
compared to insignificant growth of 0.57% in 2009-10.


Indias Export performance:
Indias merchandise exports stood at Rs.1142922 crores in 2010-11 as compared to Rs.845534 crores
during 2009-10, resulting in a growth of 35.17% in 2010-11.The corresponding growth of 0.57% in 2009-10
indicating that there was more impact of global recess/slowdown on Indias economy in the initial year.

Major Export Destinations:
The most important destination of Indias exports was UAE during the year 2010-11. In fact UAE has
been the topmost export destination for the last three years with more than 13% share in each year. In terms
of value, Indias exports to UAE exceeded one lakh crores during these three years with Rs. 153866 crores
in 2010-11. Closely following UAE was USA, for which the exports value stood at Rs. 115212 in 2010-11
with percentage share more than 10% during last five (5) years. In fact USA was the topmost export
destination prior to UAE. The shares of export values to the total exports for both these countries were more
than 23 % in 2010-11 and the next highest share was that of China RP (6.47 %). However, in terms of
annual growth rates, the exports to these top two countries, i.e. UAE and USA are quite significant. The
exports to UAE grew by 35.75% in 2010-11 as compared to insignificant growth (2.83 %) in 2009-10. This
was because, in 2008-09, the growth was substantial (75.20%). The growth of exports to USA was 25.93 %
in 2010-11 although it was negative growth (4.19 %) in 2009-10 (Table 3.2A). The percentage shares of
exports in the total exports to these top two countries, i.e., UAE and USA, during the last five years from
2006-07 to 2010-11 are very contrasting. While the shares of exports to UAE were increasing over the years,
those of USA were decreasing during these years, as may be seen from Table 3.2A. From 2006-07 to 2007-
08, USA was the top destination country for exports and UAE was in the second position. But, from 2008-
09 to 2010-11, their positions have changed, thus UAE has replaced USA at the top. However, the third
positioned destination country, i.e., China RP was consistent in terms of shares (between 5 to 7 %) of
exports in the total exports during these years. In terms of shares of exports, the next two top destination
countries after UAE, USA, and China RP, are Hong Kong and Singapore. While the shares of exports to
Hong Kong during these years, i.e., from 2006-07 to 2010-11 were around 4%, those of exports to Singapore
were consistently decreasing. Among the top 20 Export destinations, the growth of exports in 2010-11 was
highest (83.41 %) for South Africa followed by Indonesia (77.51 %), Brazil (61.34%), Sri Lanka (55.13 %),
Belgium (48.38 %), etc.



Major Exports:
Table 3.3 gives the export values of major items during 2006-07 to 2010-11. The most important item
group exported by India in 2010-11 was Engineering goods with value of exports more than 2.27 lakh
crores and accounting for 19.84 % of Indias total exports. The export of engineering goods during this
period has increased by 46.97 %, as compared to 2009-10 when it was negative growth ( 16.13%) at
Rs.154320 crores. The main markets for these items are developed countries and emerging economies like
China. It is heartening to learn that Indias exports of these sophisticated manufactured items to major
economies have gone up substantially in recent years. This indicates the newly gained maturity of Indias
manufacturing base.

An obvious development in the field of exports is the recent surge in exports of petroleum products. The
share of this group in Indias export basket has gone up from 14.78 % in 2006-07 to as much as 17.41% in
2007-08, making it the second most important export item group. After 2007-08 it showed a decrease in
terms of its share in total exports to 14.68% in 2008-09 but recorded increases in 2009-10 (15.72 %) and
2010-11 (16.52%). In terms of export growth over the previous year, petroleum products recorded maximum
growth in 2010-11 (42.05%) and the second most growth in 20007-08 (35.11 %). In between the growths
were 8.06 % in 2008-09 and 7.70% in 2009-10. The major export destinations for this commodity include
some oil-producing countries like Iran, UAE and Indonesia. The countries like Singapore, Netherlands,
Brazil and Sri Lanka are other important buyers.

Gems and Jewellery is next important item in Indias export basket. Its share in total exports was
12.64% in 2006-07 but decreased to 12.16 % in 2007-08. However, it has recorded increases in the years
2008-09 (15.29%) and 2009-10 (16.27%). But it has declined in 2010-11 (16.14%). Gems and jewellery are
mainly exported to rich countries like USA, UK, Japan, Belgium and Switzerland, trading nations like Hong
Kong and Singapore, and also newly industrialised countries like Thailand. UAE is also an important
market.

Basic chemicals (Drug, Phrmcutes & Fine Chemls and other basic chemicals combined) is an area in
which India is consistently doing well as far as exports are concerned. In the recent years, basic chemicals
have replaced readymade garments from the fourth most important source of foreign exchange earner. In
2007-08, basic chemicals accounted for around 8.43 % of Indias total value of export. In the next two years
it remained at 8.55% and 8.85% in 2008-09 and 2009-10 respectively and thereafter it showed a marginal
decrease in 2010- 11(7.70 %).

Traditionally, India has had a comparative advantage in textiles. But the share of this item in Indias
total exports is gradually decreasing over the years. The share of this commodity in Indias total volume of
export has come down to 5.95 % in 2007-08 from 7.04 % in 2006-07. It had marginally increased to 5.98 %
and 6.01% in 2008-09 and 2009-10 respectively. Thereafter it declined again (4.63%) in 2010-11. However,
it still continues to be the fourth largest foreign exchange earner for the country when considered basic
chemicals separately from other basic chemicals. Indias main markets for this item group are the developed
western countries like USA, UK, Germany, France and Italy and also UAE.

There was a substantial jump in exports share (3.89%) of electronic goods and computer software in
2008-09 which is maintained steadily till 2010-11. In 2010-11, the share of electronic goods is 3.27% which
is seventh in the all commodity groups.

Indias iron ore export is another commodity group which had increased by leaps and bounds in the last few
years. Although there was increase in growth during 2007-08 (32.53%), a negative growth was recorded
again in 2008-09 (7.16 %). However, there was again positive growth by 30.57% in 2009-10, and negative
growth (24.50%) in 2010-11. The reason for these ups and down situation in exports of iron ore is assumed
to be largely on the slowdown in the demand from China. Indias main markets for iron ores are USA,
China, Belgium, Italy and Spain.

Cotton yarn/fabrics/made-ups handloom products etc., and Man-made yarns/fabrics/made-ups, etc.
accounted for 2.44 % and 1.71 % of Indias total exports in 2010-11. The percentage share of cotton
yarn/fabrics/made-ups handloom products etc. has decreased steadily over the years from 2006-07 to 2009-
10 (from 3.34 % to 2.22 %) but in 2010-11, it has recorded an increase in share (2.44%). The growth of
man-made yarns/fabrics/made-ups, etc. has shown a steady increase in absolute value terms from 2006-07 to
2010-11.










IMPORT PERFORMANCE

Major Import Sources:
Indias imports from top twenty countries, based on 2010-11 figures and covering more than 75% value
share of imports, during last five years (from 2006-07 to 2010-11) are presented in Table 3.4A. The table
also indicates the percentage share of these countries. It can be seen from the table that for the last five
years, Indias imports from the Peoples Republic of China remained consistently on top with the percentage
shares of imports is about 12% in 2010-11. The percentage share of import value from China was marginally
less than 10 % in the initial year (9.40 % in 2006-07), but it has consistently increased to more than 10%
thereafter for the next three years and in 2010-11, it is 11.77 %. This indicates the importance of Chinese
goods in Indian markets as the shares of imports from the next four major countries during 2010-11 are
much less the UAE has a share of 8.86 %, followed by Switzerland (6.70 %), Saudi Arab (5.52%), and
USA (5.43%). The UAE is the second major source of imports for the last two years. China, UAE,
Switzerland, Saudi Arab and USA remain at the top five countries for the last two years with combined
import shares of 38.28% and 34.34% respectively in 2010-11 and 2009-10. Switzerland was in the fifth
position in 2009-10, but has occupied the third position pushing Saudi Arab and USA into fourth and fifth
positions respectively. However, it is very significant and important that during the last two years, i.e. in
2009-10 and 2010-11, the composition of the top twenty countries remain the same although their relative
positions may not be the same during these two years. Another significant happening among these top
twenty countries is that Hong Kong which was in 19th position last year (2009-10) has moved to 13th
position in this year.



In absolute terms, imports from China has exceeded one lakh crores since 2007-08 and it is nearing two
lakhs crores now (Rs. 198079 crores in 2010-11) with 35.63 % growth over 2009-10 (Table 3.4B).

Although there was negative growth in total imports of India by 0.78 % during 2009-10 in comparison to the
previous two years (the annual growths were 20.44 % and 35.77 % respectively in 2007-08 and 2008-09), it
has again increased by 23.45 % during 2010-11 (Table 3.4B). Whereas the negative growth of import for
2009-10 was reflected in the imports from almost all major countries except Qatar (38.47 %), Indonesia
(33.36 %), Switzerland (31.36 %), Australia (16.17 %), Belgium (9.24 %) and South Africa (8.11 %) where
there were positive growths over the previous year, the situations are quite different in 2010-11.
Significantly, Hong Kong has performed highest annual growth of import to India during 2010-11 and this
has put Hong Kong to the 13th position against 19th position in 2009-10 among the top 20 major import
sources. In the same way, Switzerlands growth was very significant (62.84 %) in 2010-11, which has put it
in 3rd position replacing Saudi Arab which is now in 4th position.



Major Imports:
Table 3.6A and Table 3.6B present Indias import by principal commodity groups with their shares and
annual growths respectively during 2004-05 to 2010-11. From Table 3.6A, it is seen that the most important
item group imported by India is Petroleum, Crude & Products (28.65%), followed by Gold and silver
(11.50 %), Pearls, precious and semi-precious stones (9.36 %), Machinery, electrical & non-electrical
(7.49 %), electronic goods (7.19 %), etc. It is the imports of Petroleum, Crude & Products and the
increasing price of petroleum products globally that has changed the scenario of the imports and has put
countries such as UAE, Saudi Arabia, etc. into the top five countries and other countries like Iran, Indonesia,
Iraq, Kuwait, etc. into the top 20 countries over the
last five years.

As can be seen from Table 3.6A that although the petroleum import has been more than 30 % since 2006-07,
it came down slightly during 2010-11 with a share of 28.65 %. During 2004-05 and 2005-06 shares of
imports of POL were 26.76 % and 29.47 % respectively. Although the growth of POL import was negative
during 2009-10 (Table 3.7), it again increased during 2010-11.

Gold & Silver, the second most important item group after Petroleum, Crude & Products. It has a share
of 11.50 % to the total imports in 2010-11 whereas it was 10.30 % to the total imports in 2009-10 (Table
3.6A). After 2003-04, when the total value of Gold & Silver import was Rs. 31506 crores, it increased
substantially to Rs. 50098 crores in 2004-05, a growth of 59.01 %. However, after 2004-05, this item group
had a steady percentage shares of about 7 8% for next three years, i.e., for 2005-06, 2006-07 and 2007-08.
In 2008-09, the Gold & Silver import shoot up to Rs. 100467 crores value of import with an annual growth
of 39.67 % (Table 3.6B). The trend continued in 2009-10 also, but in 2010-11, the growth of Gold &
Silver import was slightly less (37.83 %) although it was Rs. 193562 crores in absolute value, thus
indicating that this commodity group is likely cross the 2 lakhs crores of import value next year.

The item group Pearls, precious & semi-precious stones, which was sharing 5.62 % of the total imports in
2009-10 and was the fifth in the commodity group, has made significant progress in import values at Rs.
157596 crores with a share of 9.36 % and with an annual growth of 105.53 % in 2010-11, thus recording the
second highest growth after Textile Yarn Fabric, etc. (Table 3.6B). Such growth was noticed in 2008-09
when the annual growth was recorded as 137.06 %. There was a steady decline of percentage shares of this
item group from 8.45 % in 2004- 05, 6.12 % in 2005-06, 4.03 % in 2006-07 to 3.17 % in 2007-08, but it
again increased to 5.54 % in 2008-09 and 5.62 % in 2009-10. However, the growth was only 0.72 % in
2009-10.

Machinery, electrical and non-electrical machinery comes fourth in terms of share and values of imports
are concerned. It contributes 7.49 % in the total merchandise imports with a value of Rs. 126162 crores
during 2010-11, a slight decrease in share compare to 2009-10 when its share was 7.93 % in the total
merchandise imports with a value of Rs. 108154 crores. Although the annual growth is recorded as 16.65 %
in 2010-11, there was a negative growth (6.58 %) of import of this commodity group in 2009-10. It can also
be seen that there is a steady decrease of imports of Machinery, electrical and non-electrical machinery
items over the last five years from 2005-06 to 2009-10 (Table 3.6B).

Electronic Goods is the fifth important item group. Its share of value to the total imports, although is
declining over the years but is steady between 7 8 % over the years. In 2010-11, it has import share of 7.19
%, slightly less than the previous year which was 7.29 %. Although, there was negative annual growth of
7.20 % in 2009-10, it has significantly positive annual growth of 21.72 % in 2010-11.

Besides these five major commodity groups with larger shares of imports, the commodity group that has
significant growth of import value in 2010-11 was Textile yarn Fabric, made-up articles with an annual
growth of 156.41 %, although there was negative growth ( 51.90 %) of this commodity group in 2009-10.
Other commodity groups which recorded significant positive growths in 2010-11 against negative growths
in 2009-10 are Newsprint (66.64 % in 2010-11 and 39.67 % in 2009-10), Sulphur & Unroasted Iron Pyrts
(61.14 % in 2010-11 and 76.28 % in 2009-10), Machine tools (30.82 % in 2010-11 and 24.24 % in 2009-
10), Non-ferrous metals (30.33 % in 2010-11 and 46.56% in 2009-10), etc. The commodity groups like
Artificial resins, plastic material etc. (32.22 % in 2010-11 and 30.74 % in 2009-10), and Project goods
(26.01 % in 2010-11 and 51.46 % in 2009-10) have recorded
high positive growths in both the years 2009-10 and 2010-11.








SHARE OF EXPORT SECTOR IN GDP
Exports have always played an important role in the economic development of most countries. This is
evident even in Indian case from the continuous upward movement of percentage share of merchandise
exports in the overall GDP of India from 13.9 percent in 2009-10 to 16.0 percent in 2010-11 and 17.7
percent in 2011-12. As per the WTO trade statistics Indias share in the total global merchandise exports has
been measured at 1.48% during 2010, 1.66% during 2011and 1.60% in 2012.

The difference between imports and exports is the measure of Trade Balance, which contributes to Current
Account Balance stability of a country. Macro Economic growth and stability of a country has a very close
correlation with Current Account Balance of that country. Hence, Government and policy makers keep a
close watch on Trade Balance and Current Account Balance. An aggressive product promotion strategy for
high value items that have a strong manufacturing base is the main focus of the overall growth strategy. The
core of the market strategy is to retain presence and market share in traditional markets, move up the value
chain in providing export products in the developed country markets; and open up new vistas, both in terms
of markets and new products in these new markets.
INDIAS GDP GROWTH RATE FROM 2003 TO 2013

Exports as Share of GDP


EXIM POLICY (FOREIGN TRADE POLICY)
Exim Policy or Foreign Trade Policy is a set of guidelines and instructions established by the DGFT in
matters related to the import and export of goods in India.
The Foreign Trade Policy of India is guided by the Export Import in known as in short EXIM Policy of the
Indian Government and is regulated by the Foreign Trade Development and Regulation Act, 1992.
DGFT (Directorate General of Foreign Trade) is the main governing body in matters related to Exim Policy.
Foreign Trade Act has replaced the earlier law known as the imports and Exports (Control) Act 1947.
The main objective of the Foreign Trade (Development and Regulation) Act is to provide the development
and regulation of foreign trade by facilitating imports into, and augmenting exports from India.

Indian EXIM Policy contains various policy related decisions taken by the government in the sphere of
Foreign Trade, i.e., with respect to imports and exports from the country and more especially export
promotion measures, policies and procedures related thereto. Trade Policy is prepared and announced by the
Central Government (Ministry of Commerce). India's Export Import Policy also known as Foreign Trade
Policy, in general, aims at developing export potential, improving export performance, encouraging foreign
trade and creating favorable balance of payments position.

History of Exim Policy of India
In the year 1962, the Government of India appointed a special Exim Policy Committee to review the
government previous export import policies. The committee was later on approved by the Government of
India. Mr. V. P. Singh, the then Commerce Minister and announced the Exim Policy on the 12th of April,
1985.
Initially the EXIM Policy was introduced for the period of three years with main objective to boost the
export business in India.

Objectives of the Exim Policy
Government control import of non-essential items through the EXIM Policy. At the same time, all-out
efforts are made to promote exports. Thus, there are two aspects of Exim Policy; the import policy which is
concerned with regulation and management of imports and the export policy which is concerned with
exports not only promotion but also regulation. The main objective of the Government's EXIM Policy is to
promote exports to the maximum extent. Exports should be promoted in such a manner that the economy of
the country is not affected by unregulated exportable items specially needed within the country. Export
control is, therefore, exercised in respect of a limited number of items whose supply position demands that
their exports should be regulated in the larger interests of the country. In other words, the main objective of
the Exim Policy is:
To accelerate the economy from low level of economic activities to high level of economic activities
by making it a globally oriented vibrant economy and to derive maximum benefits from expanding
global market opportunities.
To stimulate sustained economic growth by providing access to essential raw materials,
intermediates, components,' consumables and capital goods required for augmenting production.
To enhance the techno local strength and efficiency of Indian agriculture, industry and services,
thereby, improving their competitiveness.
To generate new employment, opportunities and encourage the attainment of internationally accepted
standards of quality.
To provide quality consumer products at reasonable prices.

Governing Body of Exim Policy
The Government of India notifies the Exim Policy for a period of five years (1997-2002) under Section 5 of
the Foreign Trade (Development and Regulation Act), 1992. The current Export Import Policy covers the
period 2002-2007.
The Exim Policy is updated every year on the 31st of March and the modifications, improvements and new
schemes became effective from 1st April of every year.
All types of changes or modifications related to the EXIM Policy is normally announced by the Union
Minister of Commerce and Industry who co-ordinates with the Ministry of Finance, the Directorate General
of Foreign Trade and network of DGFT Regional Offices.

Different Exim Policies
1. Exim Policy 1992 -1997
In order to liberalize imports and boost exports, the Government of India for the first time introduced the
Indian Exim Policy on April I, 1992. In order to bring stability and continuity, the Export Import Policy was
made for the duration of 5 years. However, the Central Government reserves the right in public interest to
make any amendments to the trade Policy in exercise of the powers conferred by Section-5 of the Act. Such
amendment shall be made by means of a Notification published in the Gazette of India.
Export Import Policy is believed to be an important step towards the economic reforms of India.

2. Exim Policy 1997 -2002
With time the Exim Policy 1992-1997 became old, and a New Export Import Policy was need for the
smooth functioning of the Indian export import trade. Hence, the Government of India introduced a new
Exim Policy for the year 1997-2002. This policy has further simplified the procedures and educed the
interface between exporters and the Director General of Foreign Trade (DGFT) by reducing the number of
documents required for export by half. Import has been further liberalized and better efforts have been made
to promote Indian exports in international trade.
Objectives of the Exim Policy 1997 -2002:
The principal objectives of the Export Import Policy 1997 -2002 are as under:
To accelerate the economy from low level of economic activities to high level of economic activities
by making it a globally oriented vibrant economy and to derive maximum benefits from expanding
global market opportunities.
To motivate sustained economic growth by providing access to essential raw materials,
intermediates, components,' consumables and capital goods required for augmenting production.
To improve the technological strength and efficiency of Indian agriculture, industry and services,
thereby, improving their competitiveness.
To create new employment. Opportunities and encourage the attainment of internationally accepted
standards of quality.
To give quality consumer products at practical prices.
Highlights of the Exim Policy 1997-2002:
Period of the Exim Policy
This policy is valid for five years instead of three years as in the case of earlier policies. It is effective from
1st April 1997 to 31st March 2002.
Liberalization
A very important feature of the policy is liberalization.
It has substantially eliminated licensing, quantitative restrictions and other regulatory and discretionary
controls. All goods, except those coming under negative list, may be freely imported or exported.
Imports Liberalization
Of 542 items from the restricted list 150 items have been transferred to Special Import License (SIL) list and
remaining 392 items have been transferred to Open General License (OGL) List.
Export Promotion Capital Goods (EPCG) Scheme
The duty on imported capital goods under EPCG Scheme has been reduced from 15% to 10%.
Under the zero duty EPCG Scheme, the threshold limit has been reduced from 20 crore rupees to 5 crore
rupees for agricultural and allied Sectors
Advance License Scheme
Under Advance License Scheme, the period for export obligation has been extended from 12 months to 18
months.
A further extension for six months can be given on payment of 1 % of the value of unfulfilled exports.
Duty Entitlement Pass Book (DEPB) Scheme
Under the DEPB Scheme an exporter may apply for credit, as a specified percentage of FOB value of
exports, made in freely convertible currency.
Such credit can be can be utilized for import of raw materials, intermediates, components, parts, packaging
materials, etc. for export purpose.
Impact of Exim Policy 1997 2002
(a) Globalization of Indian Economy:
The Exim Policy 1997-02 proposed with an aim to prepare a framework for globalizations of Indian
economy. This is evident from the very first objective of the policy, which states. "To accelerate the
economy from low level of economic activities to- high level of economic activities by making it a globally
oriented vibrant economy and to derive maximum benefits from expanding global market opportunities."
(b) Impact on the Indian Industry:
In the EXIM policy 1997-02, a series of reform measures have been introduced in order to give boost to
India's industrial growth and generate employment opportunities in non-agricultural sector. These include
the reduction of duty from 15% to 10% under EPCG scheme that enables Indian firms to import capital
goods and is an important step in improving the quality and productivity of the Indian industry.
(c) Impact on Agriculture:
Many encouraging steps have been taken in the Exim Policy 1997-2002 in order to give a boost to Indian
agricultural sector. These steps includes provision of additional SIL of 1 % for export of agro products,
allowing EOUs and other units in EPZs in agriculture sectors to 50% of their output in the domestic tariff
area (DTA) on payment of duty.
(d) Impact on Foreign Investment.
In order to encourage foreign investment in India, the Exim Policy 1997-02 has permitted 100% foreign
equity participation in the case of 100% EOUs, and units set up in EPZs.
(e) Impact on Quality up gradation:
The SIL entitlement of exporters holding ISO 9000 certification has been increased from 2% to 5% of the
FOB value of exports, which has encouraged Indian industries to undertake research and development
programmers and upgrade the quality of their products.
(f) Impact on Self-Reliance:-
The Exim Policy 1997-2002 successfully fulfills one of the Indias long terms objective of Self-reliance. The
Exim Policy has achieved this by encouraging domestic sourcing of raw materials, in order to build up a
strong domestic production base. New incentives added in the Exim Policy have also added benefits to the
exporters.

3. Exim Policy 2002 2007
The Exim Policy 2002 - 2007 deals with both the export and import of merchandise and services. It is worth
mentioning here that the Exim Policy: 1997 - 2002 had accorded a status of exporter to the business firm
exporting services with effect from1.4.1999. Such business firms are known as Service Providers.
Objectives of the Exim Policy: 2002 - 2007
The main objectives of the Export Import Policy 2002-2007 are as follows:
To encourage economic growth of India by providing supply of essential raw materials,
intermediates, components, consumables and capital goods required for augmenting production
and providing services.
To improve the technological strength and efficiency of Indian agriculture, industry and services,
thereby improving their competitive strength while generating new employment opportunities and
encourage the attainment of internationally accepted standards of quality; and
To provide consumers with good quality products and services at internationally competitive
prices while at the same time creating a level playing field for the domestic producers.

4. Exim Policy 2004-2009
The new Exim Policy 2004-2009 has the following main elements:
Preamble
Legal Framework
Special Focus Initiatives
Board Of Trade
General Provisions Regarding Imports And Exports
Promotional Measures
Duty Exemption / Remission Schemes
Export Promotion Capital Goods Scheme
Export Oriented Units (EOUs),Electronics Hardware Technology Parks (EHTPS), Software
Technology Parks (STPs) and Bio-Technology Parks (BTPs)
Special Economic Zones
Free Trade & Warehousing Zones
Deemed Exports
Permeable of Exim Policy 2004-2009:
It is a speech given by the Ministry of Commerce and Industries. The speech for the Exim Policy 2004-2009
was given by Kamal Nath, on 31ST AUGUST, 2004.
Legal Framework of Exim Policy 2004-2009
1.1 Preamble
The Preamble spells out the broad framework and is an integral part of the Foreign Trade Policy.
1.2 Duration
In exercise of the powers conferred under Section 5 of The Foreign Trade (Development and Regulation
Act), 1992 (No. 22 of 1992), the Central Government hereby notifies the Exim Policy for the period 2004-
2009 incorporating the Export Import Policy for the period 2002-2007, as modified. This Policy shall come
into force with effect from 1st September, 2004 and shall remain in force up to 31st March, 2009, unless as
otherwise specified.
1.3 Amendments
The Central Government reserves the right in public interest to make any amendments to this Policy in
exercise of the powers conferred by Section-5 of the Act. Such amendment shall be made by means of a
Notification published in the Gazette of India.
1.4 Transitional Arrangements
Notifications made or Public Notices issued or anything done under the previous Export / Import policies
and in force immediately before the commencement of this Policy shall, in so far as they are not inconsistent
with the provisions of this Policy, continue to be in force and shall be deemed to have been made, issued or
done under this Policy.
Licenses, certificates and permissions issued before the commencement of this Policy shall continue to be
valid for the purpose and duration for which such license; certificate or permission was issued unless
otherwise stipulated.
1.5 Free Export Import
In case an export or import that is permitted freely under Export Import Policy is subsequently subjected to
any restriction or regulation, such export or import will ordinarily be permitted notwithstanding such
restriction or regulation, unless otherwise stipulated, provided that the shipment of the export or import is
made within the original validity of an irrevocable letter of credit established before the date of imposition
of such restriction.

Special Focus Initiative of Exim Policy 2004-2009
With a view to doubling our percentage share of global trade within 5 years and expanding employment
opportunities, especially in semi urban and rural areas, certain special focus initiatives have been identified
for agriculture, handlooms, handicraft, gems & jewellery, leather and Marine sectors.
Government of India shall make concerted efforts to promote exports in these sectors by specific sectorial
strategies that shall be notified from time to time.

Board of Trade of Exim Policy 2004-2009
BOT has a clear and dynamic role in advising government on relevant issues connected with foreign trade.
To advise Government on Policy measures for preparation and implementation of both short and
long term plans for increasing exports in the light of emerging national and international economic
scenarios;
To review export performance of various sectors, identify constraints and suggest industry specific
measures to optimize export earnings;
To examine existing institutional framework for imports and exports and suggest practical measures
for further streamlining to achieve desired objectives;
To review policy instruments and procedures for imports and exports and suggest steps to rationalize
and channelize such schemes for optimum use;
To examine issues which are considered relevant for promotion of Indias foreign trade, and to
strengthen international competitiveness of Indian goods and services; and
To commission studies for furtherance of above objectives.

General Provisions Regarding Exports and Imports of Exim Policy 2004-2009
The Export Import Policy relating to the general provisions regarding exports and Imports is given in
Chapter-2 of the Exim Policy.
Countries of Imports/Exports - Unless otherwise specifically provided, import/ export will be valid from/to
any country. However, import/exports of arms and related material from/to Iraq shall be prohibited.
The above provisions shall, however, be subject to all conditionality, or requirement of license, or
permission, as may be required under Schedule II of ITC (HS).


Promotional Measures of Exim Policy 2004-2009
The Government of India has set up several institutions whose main functions are to help an exporter in his
work. It would be advisable for an exporter to acquaint him with these institutions and the nature of help that
they can provide so that he can initially contact them and have a clear picture of what help he can expect of
the organized sources in his export effort. Some of these institution are as follows.
i. Export Promotion Councils
Commodity Boards
Marine Products Export Development Authority
ii. Agricultural & Processed Food Products Export Development Authority
Indian Institute of Foreign Trade
India Trade Promotion Organization (ITPO)
National Centre for Trade Information (NCTI)
Export Credit Guarantee Corporation (ECGC)
Export-Import Bank
Export Inspection Council
Indian Council of Arbitration
Federation of Indian Export
Organizations
Department of Commercial Intelligence and Statistics
Directorate General of Shipping
Freight Investigation Bureau



Duty Exemption / Remission Schemes of Exim Policy 2004-2009
The Duty Exemption Scheme enables import of inputs required for export production. It includes the
following exemptions-
Duty Drawback: -
The Duty Drawback Scheme is administered by the Directorate of Drawback, Ministry of Finance.
Under Duty Drawback scheme, an exporter is entitled to claim
Indian Customs Duty paid on the imported goods and
Central Excise Duty paid on indigenous raw materials or components.
Excise Duty Refund: - Excise Duty is a tax imposed by the Central Government on goods manufactured in
India. Excise duty is collected at source, i.e., before removal of goods from the factory premises. Export
goods are totally exempted from central excise duty.
Octroi Exemption: - Octroi is a duty paid on manufactured goods, when they enter the municipal limits of a
city or a town. However, export goods are exempted from Octroi.
The Duty Remission Scheme enables post export replenishment/ remission of duty on inputs used in the
export product.

DEPB: Duty Entitlement Pass Book
Rate is basically an export incentive scheme. The objective of DEPB Scheme is to neutralize the incidence
of basic custom duty on the import content of the exported products.

DFRC
Under the Duty Free Replenishment Certificate (DFRC) schemes, import incentives are given to the
exporter for the import of inputs used in the manufacture of goods without payment of basic customs duty.
Duty Free Replenishment Certificate (DFRC) shall be available for exports only up to 30.04.2006 and from
01.05.2006 this scheme is being replaced by the Duty Free Import Authorization (DFIA).

Duty Free Import Authorization, DFIA:
Effective from 1st May, 2006, Duty Free Import Authorization or DFIA in short is issued to allow duty free
import of inputs which are used in the manufacture of the export product (making normal allowance for
wastage), and fuel, energy, catalyst etc. which are consumed or utilized in the course of their use to obtain
the export product. Duty Free Import Authorization is issued on the basis of inputs and export items given
under Standard Input and Output Norms (SION).

Export Oriented Units (EOUs), Electronics Hardware Technology Parks (EHTPs), Software
Technology Parks (STPs) and Bio-Technology Parks (BTPs) of Exim Policy 2004-2009
The Export Import Policies relating to Export Oriented Units (EOUs) Electronics Hardware Technology
Parks (EHTPs), Software Technology Parks (STPs) and Bio-technology parks (BTPs) Scheme is given in
Chapter 6 of the Foreign Trade Policy. Software Technology Park (STP)/Electronics Hardware Technology
Park (EHTP) complexes can be set up by the Central Government, State Government, Public or Private
Sector Undertakings.

Export Promotion Capital Goods Scheme (EPCG) of Exim Policy 2004-2009
Export Promotion Capital Goods Scheme (EPCG) enable exporters to import machinery and other capital
goods for export production at concessional or no customs duties at all. This facility is subject to export
obligation, i.e., the exporter is required to guarantee exports of certain minimum value, which is in multiple
of total value of capital goods imported.
Capital goods imported under EPCG Scheme are subject to actual user condition and the same cannot be
transferred /sold till the fulfillment of export obligation specified in the licence. In order to ensure that the
capital goods imported under EPCG Scheme, the licence holder is required to produce certificate from the
jurisdictional Central Excise Authority (CEA) or Chartered Engineer (CE) confirming installation of such
capital goods in the declared premises.

Special Economic Zone (SEZ)
A Special Economic Zone in short SEZ is a geographically distributed area or zones where the economic
laws are more liberal as compared to other parts of the country. SEZs are proposed to be specially delineated
duty free enclaves for the purpose of trade, operations, duty and tariffs. SEZs are self-contained and
integrated having their own infrastructure and support services.
The area under 'SEZ' covers a broad range of zone types, including Export Processing Zones (EPZ), Free
Zones (FZ), Industrial Estates (IE), Free Trade Zones (FTZ), Free Ports, Urban Enterprise Zones and others.
In Indian, at present there are eight functional Special Economic Zones located at Santa Cruz (Maharashtra),
Cochin (Kerala), Kandla and Surat (Gujarat), Chennai (Tamil Nadu), Visakhapatnam (Andhra Pradesh),
Falta (West Bengal) and Noida (Uttar Pradesh) in India. Further a Special Economic Zone at Indore
(Madhya Pradesh) is also ready for operation.

Free Trade & Warehousing Zones of Exim Policy 2004-2009
Free Trade & Warehousing Zones (FTWZ) shall be a special category of Special Economic Zones with a
focus on trading and warehousing. The concept of FTWZ is new and has been recently introduced in the
five-year foreign trade policy 2004-09. Its main objective is to provide infrastructure for growth of the
economy and foreign trade. Free Trade & Warehousing Zones (FTWZ) plays an important role in achieving
global standard warehousing facilities as free trade zones. Free Trade & Warehousing Zones is a widely
accepted model with a history of providing Substantial encouragement to foreign trade and warehousing
activity.

Deemed Exports under the Exim Policy 2004-2009
Deemed Export is a special type of transaction in the Indian Exim policy in which the payment is received
before the goods are delivered. The payment can be done in Indian Rupees or in Foreign Exchange. As the
deemed export is also a source of foreign exchange, so the Government of India has given the benefit duty
free import of inputs.

5. New Foreign Trade Policy 2009-2014

The Honble Union Commerce & Industry Minister Mr. Anand Sharma announced the new Foreign Trade
Policy 2009 - 2014 in New Delhi on 27
th
August, 2009.Mr.Jyothiraditya Madhavrao Scindia, Minister of
State for Commerce; Dr. Rahul Khullar, Commerce Secretary, Ministry of Commerce & Industry and other
dignitaries were present on the occasion.

Various Suggestions of the Federation have been considered in the New Foreign Trade Policy like -
Continuation of DEPB scheme; Enhancement ofincentives underpromotional schemes; Benefits to Status
Holders; Zero duty EPCG Scheme;Rationalization of additional export obligation under EPCG; Additional
markets under focus market scheme; Additional products under Focus Product Scheme; Transferability of
Duty Scrip under Para 3.8.6 of FTP; Flexibility in import of items against Duty Credit Scrips issued under
earstwhile in Target Plus/DFCE Schemes; Removal of Handloom Mark under Focus Product Scheme;
Issues relating to transaction costs; Tangible benefits to town of export excellence; MDA Scheme;
Technology Fund, etc.

Highlights of the New Foreign Trade Policy are as under:-

Higher Support for Market and Product Diversification

Incentive schemes under Chapter 3 have been expanded by way of addition of new products and
markets.

26 new markets have been added under Focus Market Scheme. These include 16 new markets in
Latin America and 10 in Asia-Oceania.

The incentive available under Focus Market Scheme (FMS) has been raised from 2.5% to 3%.

The incentive available under Focus Product Scheme (FPS) has been raised from 1.25% to 2%.

A large number of products from various sectors have been included for benefits under FPS. These
include, Engineering products (agricultural machinery, parts of trailers, sewing machines, hand tools,
garden tools, musical instruments, clocks and watches, railway locomotives etc.), Plastic (value
added products), Jute and Sisal products, Technical Textiles, Green Technology products (wind
mills, wind turbines, electric operated vehicles etc.), Project goods, vegetable textiles and certain
Electronic items.

Market Linked Focus Product Scheme (MLFPS) has been greatly expanded by inclusion of products
classified under as many as 153 ITC (HS) Codes at 4 digit level. Some major products include;
Pharmaceuticals, Synthetic textile fabrics, value added rubber products, value added plastic goods,
textile made ups, knitted and crocheted fabrics, glass products, certain iron and steel products and
certain articles of aluminum among others. Benefits to these products will be provided, if exports are
made to 13 identified markets (Algeria, Egypt, Kenya, Nigeria, South Africa, Tanzania, Brazil,
Mexico, Ukraine, Vietnam, Cambodia, Australia and New Zealand).

MLFPS benefits also extended for export to additional new markets for certain products. These
products include auto components, motor cars, bicycle and its parts, and apparels among others.

A common simplified application form has been introduced for taking benefits under FPS, FMS,
MLFPS and VKGUY.

Higher allocation for Market Development Assistance (MDA) and Market Access Initiative (MAI)
schemes is being provided.

Technological Up Gradation

To aid technological up gradation of our export sector, EPCG Scheme at Zero Duty has been
introduced. This Scheme will be available for engineering & electronic products, basic chemicals &
pharmaceuticals, apparels & textiles, plastics, handicrafts, chemicals & allied products and leather &
leather products (subject to exclusions of current beneficiaries under Technological Up gradation
Fund Schemes (TUFS), administered by Ministry of Textiles and beneficiaries of Status Holder
Incentive Scheme in that particular year). The scheme shall be in operation till 31.3.2011.

Jaipur, Srinagar and Anantnag have been recognized as Towns of Export Excellence for
handicrafts; Kanpur, Dewas and Ambur have been recognized as Towns of Export Excellence for
leather products; and Malihabad for horticultural products.





EPCG Scheme Relaxations

To increase the life of existing plant and machinery, export obligation on import of spares, moulds
etc. under EPCG Scheme has been reduced to 50% of the normal specific export obligation.

Taking into account the decline in exports, the facility of Re-fixation of Annual Average Export
Obligation for a particular financial year in which there is decline in exports from the country, has
been extended for the 5 year Policy period 2009-14.

Support for Green products and products from North East

Focus Product Scheme benefit extended for export of green products; and for exports of some
products originating from the North East.


Status Holders

To accelerate exports and encourage technological up gradation, additional Duty Credit Scrips shall
be given to Status Holders @ 1% of the FOB value of past exports. The duty credit scrips can be
used for procurement of capital goods with Actual User condition. This facility shall be available for
sectors of leather (excluding finished leather), textiles and jute, handicrafts, engineering (excluding
Iron & steel & non-ferrous metals in primary and intermediate form, automobiles & two wheelers,
nuclear reactors & parts, and ships, boats and floating structures), plastics and basic chemicals
(excluding pharmaceuticals products) [subject to exclusions of current beneficiaries under
Technological Up gradation Fund Schemes (TUFS)]. This facility shall be available up to 31.3.2011.

Transferability for the Duty Credit scrips being issued to Status Holders under paragraph 3.8.6 of
FTP under VKGUY Scheme has been permitted. This is subject to the condition that transfer would
be only to Status Holders and Scrips would be utilized for the procurement of Cold Chain
equipment(s) only.

Stability/ continuity of the Foreign Trade Policy

To impart stability to the Policy regime, Duty Entitlement Passbook (DEPB) Scheme is extended
beyond 31-12-2009 till 31.12.2010.

Interest subvention of 2% for pre-shipment credit for 7 specified sectors has been extended till
31.3.2010 in the Budget 2009-10.

Income Tax exemption to 100% EOUs and to STPI units under Section 10B and 10A of Income Tax
Act, has been extended for the financial year 2010-11 in the Budget 2009-10.

The adjustment assistance scheme initiated in December, 2008 to provide enhanced ECGC cover at
95%, to the adversely affected sectors, is continued till March, 2010.

Marine sector

Fisheries have been included in the sectors which are exempted from maintenance of average EO
under EPCG Scheme, subject to the condition that Fishing Trawlers, boats, ships and other similar
items shall not be allowed to be imported under this provision. This would provide a fillip to the
marine sector which has been affected by the present downturn in exports.

Additional flexibility under Target Plus Scheme (TPS) /Duty Free Certificate of Entitlement (DFCE)
Scheme for Status Holders has been given to Marine sector.


Gems & Jewelry Sector

To neutralize duty incidence on gold Jewelry exports, it has now been decided to allow Duty
Drawback on such exports.

In an endeavor to make India a diamond international trading hub, it is planned to establish
Diamond Bourse (s).

A new facility to allow import on consignment basis of cut & polished diamonds for the purpose of
grading/certification purposes has been introduced.

To promote export of Gems & Jewelry products, the value limits of personal carriage have been
increased from US$ 2 million to US$ 5 million in case of participation in overseas exhibitions. The
limit in case of personal carriage, as samples, for export promotion tours, has also been increased
from US$ 0.1 million to US$ 1 million.

Agriculture Sector

To reduce transaction and handling costs, a single window system to facilitate export of perishable
agricultural produce has been introduced. The system will involve creation of multi-functional nodal
agencies to be accredited by APEDA.

Leather Sector

Leather sector shall be allowed re-export of unsold imported raw hides and skins and semi-finished
leather from public bonded ware houses, subject to payment of 50% of the applicable export duty.

Enhancement of FPS rate to 2%, would also significantly benefit the leather sector.

Tea

Minimum value addition under advance authorization scheme for export of tea has been reduced
from the existing 100% to 50%.

DTA sale limit of instant tea by EOU units has been increased from the existing 30% to 50%.

Export of tea has been covered under VKGUY Scheme benefits.

Pharmaceutical Sector

Export Obligation Period for advance authorizations issued with 6-APA as input has been increased
from the existing 6 months to 36 months, as is available for other products.

Pharmaceuticals sector extensively covered under MLFPS for countries in Africa and Latin America;
some countries in Oceania and Far East.

Handloom Sector

To simplify claims under FPS, requirement of Handloom Mark for availing benefits under FPS has
been removed.




EOUs

EOUs have been allowed to sell products manufactured by them in DTA to a limit of 90% instead of
existing 75%, without changing the criteria of similar goods, within the overall entitlement of 50%
for DTA sale.

To provide clarity to the customs field formations, DOR shall issue a clarification to enable
procurement of spares beyond 5% by granite sector EOUs.

EOUs will now be allowed to procure finished goods for consolidation along with their
manufactured goods, subject to certain safeguards.

During this period of downturn, Board of Approvals (BOA) to consider, extension of block period by
one year for calculation of Net Foreign Exchange earning of EOUs.

EOUs will now be allowed CENVAT Credit facility for the component of SAD and Education Cess
on DTA sale.

Thrust to Value Added Manufacturing

To encourage Value Added Manufactured export, a minimum 15% value addition on imported inputs
under Advance Authorization Scheme has now been prescribed.

Coverage of Project Exports and a large number of manufactured goods under FPS and MLFPS.

DEPB

DEPB rate shall also include factoring of custom duty component on fuel where fuel is allowed as a
consumable in Standard Input-Output Norms.

Flexibility provided to exporters

Payment of customs duty for Export Obligation (EO) shortfall under Advance Authorization / DFIA
/ EPCG Authorization has been allowed by way of debit of Duty Credit scrips. Earlier the payment
was allowed in cash only.

Import of restricted items, as replenishment, shall now be allowed against transferred DFIAs, in line
with the erstwhile DFRC scheme.

Time limit of 60 days for re-import of exported gems and jewelry items, for participation in
exhibitions has been extended to 90 days in case of USA.

Transit loss claims received from private approved insurance companies in India will now be
allowed for the purpose of EO fulfillment under Export Promotion schemes. At present, the facility
has been limited to public sector general insurance companies only.

Waiver of Incentives Recovery, On RBI Specific Write off

In cases, where RBI specifically writes off the export proceeds realization, the incentives under the
FTP shall now not be recovered from the exporters subject to certain conditions.



Simplification of Procedures

To facilitate duty free import of samples by exporters, number of samples/pieces has been increased
from the existing 15 to 50. Customs clearance of such samples shall be based on declarations given
by the importers with regard to the limit of value and quantity of samples.

To allow exemption for up to two stages from payment of excise duty in lieu of refund, in case of
supply to an advance authorization holder (against invalidation letter) by the domestic intermediate
manufacturer. It would allow exemption for supplies made to a manufacturer, if such manufacturer in
turn supplies the products to an ultimate exporter. At present, exemption is allowed up to one stage
only.

Greater flexibility has been permitted to allow conversion of Shipping Bills from one Export
Promotion scheme to other scheme. Customs shall now permit this conversion within three months,
instead of the present limited period of only one month.

To reduce transaction costs, dispatch of imported goods directly from the Port to the site has been
allowed under Advance Authorization scheme for deemed supplies. At present, the duty free
imported goods could be taken only to the manufacturing unit of the authorization holder or its
supporting manufacturer.

Disposal of manufacturing wastes / scrap will now be allowed after payment of applicable excise
duty, even before fulfilment of export obligation under Advance Authorization and EPCG Scheme.


Regional Authorities have now been authorized to issue licenses for import of sports weapons by
renowned shooters, on the basis of NOC from the Ministry of Sports & Youth Affairs. Now there
will be no need to approach DGFT (HQ.) in such cases.

The procedure for issue of Free Sale Certificate has been simplified and the validity of the Certificate
has been increased from 1 year to 2 years. This will solve the problems faced by the medical devices
industry.

Automobile industry, having their own R&D establishment, would be allowed free import of
reference fuels (petrol and diesel), to a maximum of 5 KL per annum, which are not manufactured in
India.

Acceding to the demand of trade & industry, the application and redemption forms under EPCG
scheme have been simplified.


Reduction of Transaction Costs

No fee shall now be charged for grant of incentives under the Schemes in Chapter 3 of FTP. Further,
for all other Authorizations/ license applications, maximum applicable fee is being reduced to Rs.
100,000 from the existing Rs 1,50,000 (for manual applications) and Rs. 50,000 from the existing
Rs.75,000 (for EDI applications).

To further EDI initiatives, Export Promotion Councils/Commodity Boards have been advised to
issue RCMC through a web based online system. It is expected that issuance of RCMC would
become EDI enabled before the end of 2009.

Electronic Message Exchange between Customs and DGFT in respect of incentive schemes under
Chapter 3 will become operational by 31.12.2009. This will obviate the need for verification of
scrips by Customs facilitating faster clearances.

For EDI ports, with effect from December 09, double verification of shipping bills by customs for
any of the DGFT schemes shall be dispensed with.

In cases, where the earlier authorization has been cancelled and a new authorization has been issued
in lieu of the earlier authorization, application fee paid already for the cancelled authorization will
now be adjusted against the application fee for the new authorization subject to payment of minimum
fee of Rs. 200.

An Inter-Ministerial Committee will be formed to redress/resolve problems/issues of exporters.

An updated compilation of Standard Input Output Norms (SION) and ITC (HS) Classification of
Export and Import Items has been published.

Directorate of Trade Remedy Measures

To enable support to Indian industry and exporters, especially the MSMEs, in availing their rights
through trade remedy instruments, a Directorate of Trade Remedy Measures shall be set up.


BODIES THAT GOVERN EXPORTS AND IMPORTS IN INDIA
1. Department of Commerce :
The Department of Commerce is associated with the regulation, development and promotion of
Indias international trade and commerce through formulation of appropriate international trade &
commercial policy and implementation of the various provisions thereof.
The basic role of the Department is to facilitate the creation of an enabling
environment and infrastructure for accelerated growth of international trade. The Department
formulates, implements and monitors the Foreign Trade Policy (FTP) which provides the basic
framework of policy and strategy to be followed for promoting exports and trade.
The Department is also entrusted with the responsibilities relating to
I. Multilateral and bilateral commercial relations
II. Special Economic Zones
III. State trading
IV. Export promotion and trade facilitation
V. Development and regulation of certain export oriented industries and commodities.

2. Commodity Boards:
There are five statutory Commodity Boards under the Department of Commerce. These Boards are
responsible for production, development and export of tea, coffee, rubber, spices and tobacco.

3. Marine Products Export Development Authority:
The Marine Products Export Development Authority was set up as a Statutory Body in 1972 under
an Act of Parliament (No.13 of 1972). The Authority, with its headquarters at Kochi and field
offices in all the Maritime States of India is responsible for development of the marine industry with
special focus on marine exports. Besides, it has Trade Promotion Offices at Tokyo (Japan) and New
York (USA).



4. Agricultural and processed Food Products Export Development Authority:
The Agricultural and Processed Food Products Export Development Authority (APEDA) was
established in 1986 as a Statutory Body under an Act of Parliament. The Authority, with its
headquarters at New Delhi and five Regional Offices at Guwahati, Hyderabad, Kolkata, Bangalore
& Mumbai and is entrusted with the task of promoting agricultural exports, including the export of
processed foods in value added form. APEDA has also been entrusted with monitoring of export of
14 agricultural and processed food product groups listed in the Schedule to the APEDA Act.

5. Export Inspection Council:
The Export Inspection Council was set up as a Statutory Body on 1st January, 1964 under Section 3
of the Export (Quality Control and Inspection) Act, 1963 to ensure sound development of export
trade of India through quality control and inspection and for matters connected therewith. The
Council is an advisory body to the Central Government, with its office located at New Delhi.

6. State Trading Corporation of India Limited:
STC was set up on 18th May, 1956, primarily with a view to undertake trade with East European
Countries and to supplement the efforts of private trade and industry in developing exports from the
country. STC has played an important role in countrys economy by arranging imports of essential
items of mass consumption (such as wheat, pulses, sugar, etc.) into India and developing exports of a
large number of items from India.

7. MMTC Limited:
The MMTC Limited (Minerals and Metals Trading Corporation) was created in 1963 as an
individual entity on separation from State Trading Corporation of India Ltd. primarily to deal in
exports of minerals and ores and imports of non-ferrous metals. In 1970, MMTC took over imports
of fertilizer raw materials and finished fertilizers. Over the years import and exports of various other
items like steel, diamonds, bullion, etc. were progressively added to the portfolio of the company.

8. PEC Limited:
The PEC Ltd (Project and Equipment Corporation of India) was carved out of the STC in 1971-72 to
take over the canalized business of STCs railway equipment division, to diversify into turn-key
projects especially outside India and to aid & assist in promotion of exports of Indian engineering
equipment. From 27th March, 1991, PEC became an independent company directly owned by
Government of India. The main functions of PEC Ltd. includes export of projects, engineering
equipment and manufactured goods, defense equipment & stores; import of industrial raw materials,
bullion and agro commodities; consolidation of existing lines of business and simultaneously
developing new products and new markets; diversification in export of non-engineering items eg.
Coal & coke, iron ore, edible oils, steel scraps, etc.; and structuring counter trade/ special trading
arrangements for further exports.