2. GENESIS OF ANNUAL FTP SUPPLEMENT
Fast changing Global economic scenario necessitate evaluation of
Foreign Trade Policy at regular intervals and to take initiatives for
framing apposite transformational course of action considering
required Strategic realignment basis assessment of the varying
Global economic scenario.
The annual supplement endeavors to incorporate additional policy
initiatives and to simplify procedures of the existing schemes for greater
efficiencies and efficacy thereby facilitating persistent enhancement of
India’s share in International trade.
3. Worth of Exports 80 billion dollars against Target of 74 billion dollars
in the FY 2004-05. Growth rate of nearly 24%.
Export target revised to 92 billion dollars for the FY 2005-06.
Target Export by 2008-09 150 billion dollars.
Worth of Imports 105 billion dollars in the FY 2004-05.
Fuel oil import accounted for 29 billion dollars. Growth rate of nearly 34%
Total Trade deficit on merchandise goods 25 billion dollars for
FY 2004-05. Excluding Fuel oil Imports Trade Surplus of 5 billion dollars.
Estimated Service Exports 30 billion dollars.
OUTLINE ON INDIA’s SHARE IN WORLD TRADE
4. EXPORT CESS
Proposal to abolish cess on export of all agricultural (wheat, soya meals
etc.) and plantation commodities levied under these Acts. Consultations
with other Ministries to abolish cess on other commodites (iron ore etc.)
administered by them under the different Commodity Board Acts
MAJOR INITIATIVES
{Respective cess acts requires instant amendment for implementation}
5. EPCG SCHEME
Firms fulfilling 75% or more of their export obligation in half the original
obligation period, shall be freed from the balance export obligation.
EPCG Scheme extended for import of capital goods required by retailers.
For Agro & SSI units, export obligations reduced to 6 times of duty saved
fullfilment period to 12 year in place of normal export obligations of 8
times of duty saved and 8 years fullfilment period
Submission of Chartered Engineer Certificate permitted for all units
Importing capital goods and spares in lieu of submission of installation
certificates issued by Central Excise Authorities
Facility of clubbing license further liberalized by permitting clubbing
of licenses issued under same customs notification
MAJOR INITIATIVES
6. SERVICE EXPORTS
Goods Imported under “served from india” scheme allowed to be
Transferred within Group companies with actual user condition
Self declaration permitted in lieu of Chartered Accountants’ certificate
to the effect that duty benefit availed under the “served from india”
Scheme have been passed to consumer.
MAJOR INITIATIVES
7. DUTY EXEMPTION - ADVANCE LICENSE
Advance License for physical exports, intermediate supplies and deemed
Exports merged into single category
Annual Annual License extended to all categories of exporters instead of
status holders. Limit of obtaining Annual Advance License enhanced
to 300% of FOB value of export from earlier 200%
Transfer of Duty free material imported under Advance License from one
Unit to another unit of the same company allowed with intimation instead
of obtaining permission from jurisdictional Central Excise Authority.
Removal of requirement of Advance Release order for supplies to
EOU/EHTP/STP/BTP units with permission of direct debit of the Advance
license by the Bond officer of respective units
MAJOR INITIATIVES
8. DUTY REMISSION - DFRC & DEPB
DEPB Scheme continued with no changes in scheme except that
DEPB benefits now also available for supply of goods to SEZs for the
period 01-04-2003 to 11-05-2004.
Provisions for 95% re-credit on account of rejected items imported under
DFRC permitted in line with Advance License scheme
MAJOR INITIATIVES
9. EOU
De-bonding procedure for EOU simplified. Self assessment procedure
to be in place for compliances
Capital Goods will be allowed to be transferred to other units with
Intimation to both Excise & development commissioner
EOU permitted to claim IT exemption in respect of export proceeds
realised within a period of 12 months from date of export
MAJOR INITIATIVES
10. ASSORTED INITIATIVES & OTHER PROCEDURAL SIMPLIFICATION
EDI Linkage of all community trade partners like DGFT, Customs, banks
Export Promotion councils etc. to facilitate web based filing, retrieval and
verification of documents.
A fast rack mechanism for clearances, examination, testing, quarantine,
packaging etc. to be set up to facilitate import/export of perishable cargo.
Trade data to be made available enabling users to make commercial
decisions
DGFT offices to provide facilitation to exporters in regard to
developments in WTO and International Trade Arena
MAJOR INITIATIVES
11. Benefits of “Vishesh Krishi Upaj Yojana” extended to exports of poultry
and dairy products
Duty free credit certificates in split form permitted making utilization
easier.
Duty free import of specialized inputs/chemicals and flavoring oils
as per a defined list shall be allowed to the extent of 1% of FOB value of
exports of preceding financial year
Duty free imports of Gems & Jewelry samples enhanced to 3 lac from
1 lakh in a F.Y. or 0.25% of average of last 3 year export turnover of
Gems and Jewelry item whichever is lower.
Exporters of plain/studded/precious metal jewelry will be allowed to
import plain/studded/precious metal jewelry for the purpose of exports
MAJOR INITIATIVES
ASSORTED INITIATIVES & OTHER PROCEDURAL SIMPLIFICATION
12. SURVEILLANCE 1
This supplement is primarily directed towards relaxing conditions of
earlier schemes and to iron out jagged procedures exporters and
importers were encountering with bureaucracy. Abolishment of cess on
export of commodities will be real booster for agri exporters in particular.
Much awaited substitute to DEPB scheme has been kept
in abeyance, possibly for another 6 to 12 months. This again will be a
great soother to trade. Eventually, considering international trade
commitments, direct subsidies at the least needs neutralization.
Nevertheless, ministry has done a good job to grant further time to trade
to gear up for exporting goods and services with their efficiencies rather
than making subsidy as only pedestal.
13. SURVEILLANCE 2
Ministry’s commitment to resolving all outstanding problems and
disputes pertaining to the past policy periods as regards condoning
delays, regularizing breaches in bonafide cases, resolving
entitlements disputes, granting extensions for utilization of
licences etc. needs to be applauded. This move has been successful
and trade has been benefited largely.
14. Initiatives to create structure in order to combat contradicting trade stand
of developed economies are still not visible. Developed Economies are
freely using Non Tariff barriers and taking shelter under Sanitary and
Phytosanitary regulations to restrict free trade to their advantage. Tariffs
and Quotas may be of little consequence in coming time. Resisting and
structuring to fight against economic war guns viz., NTBs and SPS of
developed economies is the greatest challenge which Indian traders are
going to face in future. Partnering with trade associations, industry and
specialized professionals to create skeleton for catering above in time
will be decisive for positive balance of trade on revenue account.
SURVEILLANCE 3
15. Last but not the least issue of another prime importance is significance of
PTAs and RTAs on Indian economy. Trade is baffled on agreement with
Sri Lanka and Nepal in particular. In many sectors, these agreements
instead of benefiting Indian economy is rather proving detrimental.
Though RTAs and PTAs should benefit Indian foreign trade economy,
however, considering negative in quite a few sectors, its time Ministry
conduct appraisal on impact of these agreements at brisk pace before
couple industries fall into sector of beyond recovery.
SURVEILLANCE 4
