Import and Export Control

Chapter No. 3 Page No. 42

International Finance
IMPORT / EXPORT CONTROL

IMPORTS OF GOODS

TODAY, PARTICULARLY THE IMPORT OF GOODS IS
NOT UNDER CONTROL UNDER GLOBALIZATION.
WHAT GOODS MAY BE IMPORTED, IN WHAT
QUANTITIES, BY WHOM AND HOW, HOW EXPORTS CAN
BE PROMOTED, WHAT INCENTIVES SHOULD BE
OFFERED TO EXPORTERS etc. ARE LOOKED AFTER BY
MINISTRY OF COMMERCE.
FINANCIAL ASPECTS i.e. RATE OF EXCHANGE,
METHODS OF PAYMENT, PERMITTED CURRENCIES,
REMITTANCES AGAINST IMPORTS, etc. ARE
CONTROLLED BY THE EXCHANGE CONTROL BY THE
RESERVE BANK OF INDIA.



IMPORT TRADE CONTROL

ADMINISTRATION:
DIRECTOR GENERAL OF FOREIGN TRADE (DGFT) AND ITS
REGIONAL OFFICES CONTROL OVER THE IMPORT OF
GOODS. THE RULES AND PROCEDURES OBSERVED BY THE
IMPORT CONTROL ARE CONTAINED IN THE HAND BOOK OF
IMPORT-EXPORT PROCEDURES.
OBJECTIVES:
o THE MOST ESSENTIAL GOODS SUCH AS RAW MATERIALS
SPARES etc ARE IMPORTED ON MERITS.
o FOREIGN EXCHANGE PAID OUT, AN EQUIVALENT VALUE
IN GOODS IS RECEIVED IN INDIA.
o THE PRICE OF THE IMPORTS IS PAID OUT IN A PERMITTED
METHOD OF PAYMENT.



IMPORT LICENCE

IMPORT LICENCES ARE ISSUED BY THE OFFICE OF
THE DIRECTOR GENERAL OF FOREIGN TRADE.
LICENCE CONTAINS:
A DESCRIPTION AND VALUE IN RUPEES OF THE
GOODS TO BE IMPORTED.
THE COUNTRY FROM WHICH IMPORT IS PERMITTED.
THE DATE UP TO WHICH THE LICENCE WILL REMAIN
VALID.
IT IS ISSUED IN DUPLICATE , FIRST COPY FOR
CUSTOMS PURPOSES AND THE SECOND FOR
EXCHANGE CONTROL PURPOSES.



IMPORT LICENCE
(EXCEPTION)

UNDER IMPORT POLICY CONTROL, THE IMPORT OF
SAMPLES IS ALLOWED WITHOUT AN IMPORT LICENCE
WHERE---

THE VALUE DOES NOT EXCEED RS. 50,000.
THE IMPORT IS MADE BY POST OR BY AIR FREIGHT.
THE IMPORTER IS A REGISTRED MANUFACTURER-
EXPORTER.



TYPES OF IMPORT LICENCE

IMPORT LICENCE MAY BE ISSUED ON
CASH BASIS OR ON DEFERRED PAYMENT BASIS.
A DEFERRED PAYMENT LICENCE IS ISSUED ON
CONDITION THAT THE PAYMENT AUTHORIZED UNDER
THE LICENCE WOULD BE SPREAD OVER A PERIOD OF
YEARS. FOR THE IMPORT OF CAPITAL GOODS IT IS AS
(CG) AND FOR IMPORT OF HEAVY ELECTRICAL PLANT AS
AN (HEP) LICENCE.
AS INCENTIVES FOR CERTAIN SPECIFIED EXPORTS TO
REGISTERED EXPORTERS SUCH LICENCES ARE KNOWN
AS REPLENISHMENT (REP) IMPORT LICENCE.
FOR THE IMPORT OF GOODS UNDER FOREIGN LOANS /
CREDITS.



IMPORTS WITHOUT LICENCE

IMPORT UNDER OGL: GOODS UNDER AN OPEN GENERAL
LICENCE (OGL) DOES NOT REQUIRE ANY IMPORT LICENCE.
PRIVATE IMPORTS: IMPORTS BY INDIVIDUALS OR
INSTITUTIONS FOR THEIR OWN USE OF CERTAIN ARTICLES
SPECIFIED UNDER THE IMPORT TRADE CONTROL ORDER /
NOTIFICATION AND THE C.I.F. VALUE DOES NOT EXCEED
THE PRESCRIBED VALUE.
POSTAL IMPORTS: BY INDIVIDUALS, INSTITUTIONS OR
HOSPITAL FOR THEIR OWN USE WHERE THE VALUE DOES
NOT EXCEED U.S. $ 5000.
IMPORTS INTO BONDS: GOODS TO BE EXPORTED ARE
SOME TIMES IMPORTED AND KEPT IN BONDS.
THROUGH REGISTERED COURIER: WHERE VALUE DOES
NOT EXCEED THE SPECIFIED LIMIT.



EVIDENCE OF IMPORT

THE IMPORTER SHOULD SUBMIT THE EXCHANGE CONTROL
COPIES OF THE BILLS OF ENTRY OR THE POSTAL /
COURIER WRAPPERS TO THE AUTHORIZED DEALER
THROUGH WHOM THE REMITTANCE HAS BEEN OR IS TO BE
MADE.
THE AUTHORIZED DEALER SHOULD ACKNOWLEDGE THE
RECEIPT OF THE EXCHANGE CONTROL COPIES.
THE INTERNAL INSPECTORS / AUDITORS SHOULD MAKE A
100 % VERIFICATION OF THE EXCHANGE CONTROL COPIES.
THE AUTHORIZED DEALER SHOULD FORWARD TO THE
RESERVE BANK A STATEMENT AT THE END OF EACH
CALENDAR QUARTER IN FORM BEF ALONG WITH THE
COPIES OF THE BILL OF ENTRY WITHIN 15 DAYS FROM THE
END OF THE QUARTER.



IMPORT OF GOLD, SILVER, JEWELLERY,
FOREIGN EXCHANGE, INDIAN CURRENCY

GOLD / SILVER: GOLD AND SILVER CAN BE IMPORTED UP
TO A CERTAIN QUANTITY BY PERSONS OF INDIAN
NATIONALITY OR ORIGIN, SUBJECT TO CONDITIONS AND
ON PAYMENT OF THE PRESCRIBED DUTY IN FOREIGN
EXCHANGE.

IMPORT OF PERSONAL JEWELLERY: PERSONAL
JEWELLERY MADE OF GOLD OR SILVER IS ALLOWED
UNDER THE CUSTOMS BAGGAGE RULES FREE OR ON
PAYMENT OF DUTY.

CONT…..



IMPORT OF GOLD, SILVER, JEWELLERY,
FOREIGN EXCHANGE, INDIAN CURRENCY

IMPORT OF SECURITIES: THERE ARE NO RESTRICTIONS
ON THE IMPORT INTO INDIA OF ANY SECURITIES
WHETHER INDIAN OR FOREIGN.
IMPORT OF INDIAN CURRENCY: THE IMPORT OF INDIAN
CURRENCY IS PERMITTED UNDER THE RESERVE BANK’S
NOTIFICATION NO. FERA 81/89 RB DATED. 9-8-89
SUBJECT TO CONDITIONS.
IMPORT OF FOREIGN EXCHANGE: THE RESERVE BANK
HAS PERMITTED THE IMPORT PROVIDED IT IS DECLARED
TO CUSTOMS AUTHORITIES ON ARRIVAL THE
PARTICULARS OF ALL SUCH FOREIGN CURRENCY
BROUGHT ON THE CURRENCY DECLARATION FORM CDF.



IMPORTS UNDER FOREIGN CURRENCY LOAN / CREDIT

ANY FOREIGN CURRENCY LOAN OR CREDIT, SUCH AS
BUYER’S CREDIT, SUPPLIER’S CREDIT, OR A LINE OF
CREDIT GRANTED BY A FIRM, COMPANY, LENDING
INSTITUTION OR BANK FOR FINANCING IMPORT OF
GOODS, TECHNOLOGY ETC, OR FOR ANY OTHER
PURPOSE OTHER THAN EXCEPTING CERTAIN
CATEGORIES REQUIRES PRIOR PERMISSION OF THE
GOVERNMENT OF INDIA AS WELL AS OF THE RESERVE
BANK.



ACQUISITION OF FOREIGN CURRENCY / EXCHANGE

a. RESERVE BANK PERMITS ANY PERSON TO ACQUIRE
FOREIGN EXCHANGE.
BY WAY OF SCHOLARSHIP OR STIPEND FROM A
CHARITABLE TRUST OR EDUCATIONAL INSTITUTION OR
FOUNDATION OR FROM A FOREIGN GOVERNMENT TO
ENABLE HIM TO UNDERGO A COURSE OF STUDY OR
TRAINING OR BOTH.
BY WAY OF INCOME FROM ASSETS HELD OR BY WAY OF
INHERITANCE, SETTLEMENT OR GIFT.
BY WAY OF REMUNERATION FOR SERVICES RENDERED
OR IN SETTLEMENT OF ANY LAWFUL OBLIGATION.
CONT….



ACQUISITION OF FOREIGN CURRENCY / EXCHANGE

b. THE PROVISION WILL NOT APPLY TO PERSONS OUTSIDE
INDIA IN RESPECT OF FOREIGN EXCHANGE EARNED BY
THEM BY WAY OF REMUNERATION FOR SERVICES
RENDERED OUTSIDE INDIA UNTIL THEY CEASE TO BE
RESIDENT OUTSIDE INDIA.

c. WHEN SUCH FOREIGN EXCHANGE IS BROUGHT OR SENT
TO INDIA THE PERSON BRINGING OR THE PERSON
RECEIVING IT, SHALL , BEFORE THE EXPIRY OF 7 DAYS
FROM THE DATE WHEN IT IS BROUGHT OR RECEIVED,
OFFER IT FOR SALE TO AN AUTHORIZED DEALER.



OPENING OF L / C

FOR CUSTOMERS ONLY: A LETTER OF CREDIT MAY BE
OPENED BY A BANKER ON BEHALF OF A CUSTOMER WHO
MAINTAINS AN ACCOUNT WITH HIM AND KNOWN TO BE
PARTICIPATING IN THE PARTICULAR TRADE.

FOR IMPORTS UNDER OGL: WHERE THE GOODS ARE
COVERED BY AN OPEN GENERAL LICENCE.

FOR IMPORTS UNDER LICENCE: WHERE THE GOODS ARE
TO BE IMPORTED AGAINST A SPECIFIC IMPORT LICENCE
ON PRODUCTION OF THE “FOR EXCHANGE CONTROL
PURPOSE” COPY OF THE IMPORT LICENCE.
CONT….



OPENING OF L/C

AMOUNT: A LETTER OF CREDIT FOR THE IMPORT OF
GOODS COVERED BY AN OGL MAY BE FOR ANY AMOUNT,
WHILE AN L/C FOR THE IMPORT OF GOODS AGAINST AN
IMPORT LICENCE MUST NOT BE FOR AN AMOUNT
EXCEEDING THE VALUE OF THE GOODS SPECIFIED IN THE
LICENCE.
PERIOD: FOR IMPORTS UNDER OGL, THE PERIOD OF THE
L/C MUST NOT BE LONGER THAN THE VALIDITY PERIOD
OF THE RELATIVE OGL. FOR L/C OPENED UNDER AN
IMPORT LICENCE, THE DATE OF EXPIRY MUST NOT BE
LATER THAN 75 DAYS.
PAYMENT: THE LETTER OF CREDIT MUST PROVIDE FOR
PAYMENT ONLY AGAINST THE DELIVERY OF SHIPPING
DOCUMENTS.
CONT….



OPENING OF L/C

UNDER AN f.o.b. CONTRACT FREIGHT PAID BY THE
EXPORTER IS RECOVERABLE AND THE SAME SHOULD BE
STIPULATED IN THE L/C.

WHERE AN L/C IS ESTABLISHED FOR THE IMPORT FOR
GOODS FROM TWO OR MORE COUNTRIES UNDER A
SPECIFIC LICENCE, THE AMOUNT OF CREDIT SHOULD BE
STATED SEPARATELY.

THE OPENING OF AN L/C FOR IMPORT INTO BOND FOR
EXPORTS REQUIRES THE PRIOR APPROVAL OF THE
RESERVE BANK.
CONT….



OPENING OF L/C

A LETTER OF CREDIT AGAINST AN IMPORT LICENCE
ISSUED FOR THE IMPORT OF GOODS UNDER A FOREIGN
LOAN / CREDIT MAY BE OPENED WITHOUT REFERENCE TO
THE RESERVE BANK.
MARGIN: THE MARGIN ACCEPTED AGAINST A LETTER OF
CREDIT MUST BE RETAINED IN RUPEE AND NOT
CONVERTED INTO ANY FOREIGN CURRENCY UNTIL THE
BILLS ARE DRAWN.
PURCHASE OF SHIP: IF THE L/C IS AGAINST THE PURCHASE
OF A SHIP FROM ABROAD THE BANKER SHOULD VERIFY
THAT THE PURCHASER HAS OBTAINED THE APPROVAL OF
THE MINISTRY OF TRANSPORT, GOVT. OF INDIA.


RESTRICTIONS

NO OPENING DURING GRACE PERIOD: NO L /C SHOULD BE
OPENED DURING THE GRACE PERIOD OF THE LICENCE.
REVOLUTION CREDIT: THE OPENING OF A REVOLVING
CREDIT FOR IMPORTS IS NOT PERMISSIBLE.
BENEFICIARY: AN L/C MAY BE OPENED ONLY IN FAVOUR OF
THE MANUFACTURER, SUPPLIER OR SHIPPER OF THE
GOODS OR IN FAVOUR OF AN OVERSEAS BUYING AGENT
OF THE IMPORTER PROVIDED THE RESERVE BANK’S
PERMISSION HAS ALREADY OBTAINED.
NO READY EXCHANGE : THE OPENING OF A “CASH”
LETTER OF CREDIT INVOLVING AN IMMEDIATE SALE OF
READY FOREIGN EXCHANGE AGAINST SHIPMENT TO BE
MADE AT A FUTURE DATE IS NOT PERMISSIBLE.
CONT….


RESTRICTIONS

UNDER CONTRACT WITH GOLD CLAUSE: A LETTER OF
CREDIT FOR THE IMPORT UNDER A CONTRACT
CONTAINING A “GOLD CLAUSE” FROM ANY COUNTRY IN
THE FORMER BILATERAL GROUP OTHER THAN ROMANIA,
POLAND AND CZECK AND SLOVAKIA , MAY BE OPENED
ONLY WITH THE PRIOR APPROVAL OF THE RESERVE BANK.
ON EXPIRY OF LICENCE: IF AN IMPORT LICENCE EXPIRES
BEFORE SHIPMENT IS MADE, THE LETTER OF CREDIT
SHOULD NOT BE EXTENDED UNTIL THE LICENCE IS
REVALIDATED.
ANOTHER’S GUARANTEE / MARGIN: NO CREDIT SHOULD BE
ESTABLISHED AGAINST AN IMPORT LICENCE, ON BEHALF
OF THE HOLDER OF THE LICENCE AGAINST A GUARANTEE
OFFERED OR MARGIN DEPOSITED BY A PERSON OTHER
THAN THE CUSTOMER IN WHOSE NAME THE CREDIT HAS
TO BE OPENED.



EXPORT CONTROL

THE EXPORT OF GOODS EXCEPT TO NEPAL AND
BHUTAN IS UNDER CONTROL.
THE MAIN PURPOSES OF CONTROL ARE:
1. TO PREVENT THE EXPORT OF THE GOODS WHICH ARE
ESSENTIAL FOR THE DEVELOPMENT AND OR
MAINTENANCE OF THE COUNTRY’S ECONOMY.
2. TO ENSURE THAT THE FULL VALUE OF THE EXPORTED
GOODS IS RECEIVED IN INDIA WITHIN THE TIME LIMIT
AND IN A PERMITTED METHOD OF PAYMENT.



EXPORT TRADE NOTICES

THE OFFICE OF THE DIRECTOR GENERAL OF FOREIGN
TRADE ISSUES EXPORT NOTICES:
PROHIBITING THE EXPORT OF CERTAIN COMMODITIES.
MAKING THE EXPORT OF CERTAIN COMMODITIES
SUBJECT TO LICENCE FROM THE EXPORT TRADE
CONTROL.
PRESCRIBING THE MINIMUM EXPORT PRICES FOR
SOME COMMODITIES AND / OR THE METHODS BY
WHICH PAYMENT FOR THE EXPORT OF SOME
COMMODITIES SHOULD BE RECEIVED.
REGULATING THE EXPORT.



EXPORT OF GOLD, etc.
GOLD / SECURITIES: THE EXPORT OF GOLD FROM INDIA
TO ANY DESTINATION, OR TAKING OR SENDING OF
SECURITIES TO ANY PLACE OUTSIDE INDIA, REQUIRES
RESERVE BANK’S PERMISSION.
CURRENCY NOTES / FOREIGN EXCHANGE: NO PERSON
CAN, EXCEPT WITH THE SPECIAL PERMISSION OF THE
RESERVE BANK TAKE OR SEND OUT OF INDIA ANY INDIAN
CURRENCY OR FOREIGN EXCHANGE OTHER THAN THE
FOREIGN EXCHANGE OBTAINED BY HIM FROM AN
AUTHORIZED AGENT.
THE RESERVE BANK PERMITS ANY PERSON RESIDENT IN
INDIA TO TAKE OR SEND OUT OF INDIA TO ANY COUNTRY
OTHER THAN NEPAL , CURRENCY NOTES UP TO RS. 5000
PER PERSON AT ANY TIME. CONT….



EXPORT OF GOLD, etc.

UNITS OF UTI: THE UNIT TRUST OF INDIA HAS BEEN
GRANTED GENERAL PERMISSION BY THE RESERVE
BANK TO EXPORT CERTIFICATES COVERING UNITS
PURCHASED BY NON-RESIDENT INVESTORS OUT OF
FOREIGN EXCHANGE REMITTANCES.

COMPUTER SOFTWARE: COMPUTER SOFTWARE MAY
BE EXPORTED EITHER IN PHYSICAL FORM OR
NON-PHYSICAL FORM.



PRESCRIBED PERIOD FOR REALIZATION FOR EXPORTS

THE PERIOD PRESCRIBED FOR REALIZATION OF THE
PROCEEDS OF EXPORTS TO ALL OTHER COUNTRIES IS
SIX MONTHS FROM THE DATE OF SHIPMENT. THE
RESERVE BANK MAY EXTEND THE SAID PERIOD OF
THREE TO SIX MONTHS.

EXPORTS MADE BY A UNIT SITUATED IN A SPECIAL
ECONOMIC ZONE, THE EXPORT PROCEEDS SHALL BE
REALIZED AND REPATRIATED WITHIN 12 MONTHS
FROM THE DATE OF EXPORT.

CONT….




IN CASE, WHERE AN EXPORTER HAS NOT BEEN
ABLE TO REALIZE PROCEEDS OF A SHIPMENT MADE
WITHIN THE PRESCRIBED PERIOD AND EXPECTS TO
REALIZE IF EXTENSION IS ALLOWED, NECESSARY
APPLICATION IN FORM ETX SHOULD BE MADE TO RBI
THROUGH HIS BANKERS.

CONT….




EXPORT PROCEEDS ARE EXPECTED TO BE REALIZED AS
PER THE ORIGINAL CONTRACTED TERMS BUT IF THE
EXPORT BILL IS NOT REALIZED WITHIN THE ORIGINAL
CONTRACTED TERMS, IT WILL BE TERMED AS OVERDUE
EXPORT BILL AND IS SUBJECTED TO CRYSTALLIZATION
AS PER FEDAI REGULATIONS.

THE PERIOD OF REALIZATION FOR EXPORTS UNDER
DEFERRED PAYMENTS ARRANGEMENT MAY BE
EXTENDED BY THE RESERVE BANK TO - 2 YEARS IN CASE
OF CONSUMER DURABLES, 11 YEARS IN CASE OF
CAPITAL AND PRODUCER GOODS AND12 YEARS IN CASE
OF TURNKEY PROJECTS.



EXEMPTED CATEGORIES

DECLARATION ON A PRESCRIBED FORM REGARDING
THE REALIZATION OF THE VALUE OF EXPORTS IS NOT
NECESSARY.
TRADE SAMPLES OF GOODS AND PUBLICITY.
PERSONAL EFFECTS OF TRAVELERS.
SHIP’S STORES TRANSSHIPMENT CARGO AND GOODS
UNDER CENTRAL GOVT.ORDER FOR DEFENCE
REQUIREMENTS.
GOODS EXPORTED UNDER ORDER OF MILITARY,
NAVAL AND AIR FORCE. CONT….



EXEMPTED CATEGORIES

GOODS OR SOFTWARE ACCOMPANIED BY A DECLARATION
THAT THE VALUE DOES NOT EXCEED RS. 25,000.
GOODS IMPORTED FREE OF COST ON RE-EXPORT BASIS.
AIRCRAFT OR AIRCRAFT ENGINES AND SPARE PARTS FOR
OVERHAULING AND /OR REPAIRS WITHIN A PERIOD OF
6 MONTHS FROM THE DATE OF THEIR EXPORT.
GOODS NOT EXCEEDING US $ 1000 OR ITS EQUIVALENT IN
VALUE PER TRANSACTION EXPORTED TO MYANMAR
UNDER BARTER TRADE AGREEMENT BETWEEN THE
CENTRAL GOVT. AND THE GOVT. OF MYANMAR.
CONT….



EXEMPTED CATEGORIES

FOLLOWING GOODS WHICH ARE PERMITTED TO BE
RE-EXPORTED:
IMPORTED GOODS FOUND TO BE DEFECTIVE.
GOODS IMPORTED FROM FOREIGN SUPPLIERS /
COLLABORATION ON LOAN BASIS.
GOODS IMPORTED FOUND SURPLUS AFTER PRODUCTION
OPERATIONS.
REPLACEMENT GOODS EXPORTED FREE OF CHARGE IN
ACCORDANCE WITH THE PROVISION OF EXIM POLICY.
GOODS SENT FOR TESTING OUTSIDE INDIA.
DEFECTIVE GOODS SENT FOR REPAIRS OUTSIDE INDIA.
EXPORTS PERMITTED BY THE RESERVE BANK .



EXCHANGE CONTROL REGULATIONS VIS-À-VIS
NEPAL AND BHUTAN

a) FOR TRANSACTIONS IN INDIAN RUPEES THE UNDER
NOTED PERSONS, FIRMS, COMPANIES RESIDENTS IN
NEPAL OR BHUTAN ARE TREATED AS RESIDENTS IN
INDIA.
b) RUPEE ACCOUNTS THE AUTHORIZED DEALER IN INDIA
OF PERSONS, FIRMS COMPANIES etc ARE REGARDED
AS RESIDENTS ACCOUNTS.
c) EXPORT OF GOODS FROM INDIA TO NEPAL OR
BHUTAN IS NOT SUBJECT TO DECLARATION IN GR / PP
FORM.
CONT…



NEPAL AND BHUTAN

d) RUPEE TRANSFERS FROM ACCOUNTS IN INDIA OF INDIAN,
NEPALESE OR BHUTANESE RESIDENTS IN NEPAL OR
BHUTAN AS WELL AS INDIAN, NEPALESE OR BHUTANESE
FIRMS, COMPANIES FUNCTIONING IN THESE COUNTRIES
AGAINST EXPORTS TO THESE COUNTRIES FROM INDIA CAN
BE MADE FREELY.
e) PAYMENTS BETWEEN NEPAL AND INDIA ARE NOT ELIGIBLE
FOR SETTLEMENT THROUGH ASIAN CLEARING UNION.
f) PAYMENTS FROM INDIA TO SUPPLIERS IN THIRD
COUNTRIES AGAINST IMPORTS INTO NEPAL OR BHUTAN
ARE NOT PERMITTED.
CONT….



NEPAL AND BHUTAN

g) FREIGHT ON EXPORTS FROM NEPAL OR BHUTAN TO
FOREIGN COUNTRIES THROUGH AN INDIAN PORT MAY BE
FREELY RECEIVED IN INDIAN RUPEES WHERE SHIPMENT IS
MADE BY AN INDIAN, NEPALESE OR BHUTANESE CARRIER,
AND FREIGHT ON IMPORTS FROM COUNTRIES OUTSIDE
INDIA IF PAYABLE AT DESTINATION AT AN INDIAN PORT.
h) PAYMENTS OF CLAIMS AGAINST INSURANCE POLICIES,
MARINE OR NON-MARINE MAY BE MADE IN INDIAN RUPEES
TO INDIANS, NEPALESE, BHUTANESE RESIDENTS IN NEPAL
OR BHUTAN. PAYMENT IN FOREIGN CURRENCY TOWARDS
CLAIMS UNDER INSURANCE POLICIES IS NOT PERMISSIBLE
WITHOUT APPROVAL OF THE RESERVE BANK.
CONT….



NEPAL AND BHUTAN

i) NEPALESE NATIONALS RESIDENTS BUT NOT
PERMANENTLY RESIDENT IN INDIA ARE NOT ELIGIBLE FOR
THE BENEFIT OF BASIC TRAVEL QUOTA.
j) EXCHANGE CONTROL IN NEPAL DOES NOT PERMIT
TRANSIT PASSENGERS AND FOREIGN TOURISTS TO TAKE
INTO NEPAL RUPEE INSTRUMENTS ISSUED TO SUCH
PERSONS SHOULD BE ENDORSED ‘NOT VALID FOR
NEGOTIATION IN NEPAL’.
k) ANY PERSON CAN BRING WITH HIM FROM NEPAL
CURRENCY NOTES OF THE GOVT. OF INDIA OF
DENOMINATION NOT ABOVE RS. 100.
CONT….



NEPAL AND BHUTAN

l) OBLIGATION TO SURRENDER FOREIGN CURRENCY ON
ARRIVING IN INDIA TO AN AUTHORIZED AGENT IS NOT
APPLICABLE TO CURRENCIES OF NEPAL AND BHUTAN.
m) SETTING UP OF JOINT VENTURES IN NEPAL BY RESIDENTS
IN INDIA REQUIRES APPROVAL OF THE RESERVE BANK
INCASE ANY REMITTANCE OF FOREIGN EXCHANGE OR
EXPORT OF GOODS ARE INVOLVED.
n) ISSUE AND TRANSFER OF INDIAN RUPEE SHARES AND
SECURITIES TO RESIDENTS OF FIRMS IN NEPAL REQUIRES
PERMISSION FROM RESERVE BANK.

CONT….



NEPAL AND BHUTAN

o) INDIAN NATIONALS RESIDENT IN INDIA AND FIRM/
COMPANIES REGISTERED / INCORPORATED IN INDIA ARE
REQUIRED TO OBTAIN PERMISSION OF THE RESERVE BANK
TO ACQUIRE, HOLD, TRANSFER OR DISPOSE BY SALE,
MORTGAGE, LEASE FOR A PERIOD EXCEEDING 5 YEARS,
GIFT, SETTLEMENT OR OTHERWISE, ANY IMMOVABLE
PROPERTY SITUATED IN NEPAL OR VICE VERSA EVEN
THOUGH THE TRANSACTION IS SETTLED IN INDIAN RUPEES.



THE 2002-2007 EXIM POLICY

THE LIBERALIZED EXPORT-IMPORT (EXIM) POLICY THOUGH
IT SUPERSEDES THE PREVIOUS 1992-97 POLICY, IS
VIRTUALLY AN EXTENSION OF THE SAME. THE PREVIOUS
POLICY FOCUSED ON LIBERALIZATION, OPENNESS,
TRANSPARENCY AND GLOBALIZATION AND PROVIDED
INCENTIVES FOR GROWTH OF EXPORTS AND SIMPLIFIED
PROCEDURES.

THE MOST IMPORTANT FEATURES OF THE POLICY IS THAT
AS MANY AS 542 ITEMS (18% OF TOTAL) HAVE BEEN
REMOVED FROM RESTRICTED LIST OF WHICH 392 HAVE
BEEN PLACED ON THE FREE LIST AND OTHER 150 ITEMS
ON SPECIAL IMPORT LICENCE (SIL) LIST AND 60 ITEM HAVE
BEEN TRANSFERRED FROM SIL TO FREE LIST.



(NOTE WORTHY IMPROVEMENTS)

THE DUTY PAYABLE ON IMPORT OF CAPITAL GOODS
UNDER THE EXPORT PROMOTION CAPITAL GOODS (EPCG)
SCHEME HAS BEEN REDUCED FROM 15% TO 10%.
THE BENEFIT OF THE EPCG SCHEME HAS BEEN EXTENDED
TO SERVICES INDUSTRIES.
THE THRESHOLD LEVEL UNDER THE ZERO –DUTY IMPORT
SCHEME HAS BEEN REDUCED FROM RS. 20 CRORES TO RS.
5 CRORES FOR AGRICULTURE AND ALLIED SECTORS.
PROVISION HAS BEEN MADE FOR GIVING DOUBLE
WEIGHTAGE TO AGRO EXPORTS.



(NOTE WORTHY IMPROVEMENTS)

DOMESTIC SALES FOR EOUs AND EPZs IN AGRICULTURE
AND ALLIED SECTORS HAVE BEEN LIBERALIZED SO THAT
THE UNITS CAN SELL 50% OF THE PRODUCTION.
AGENCIES FOR STOCKING GOLD TO FACILITATE EXPORTS
HAS BEEN INCREASED.
THE SOFTWARE SECTOR HAS BEEN GIVEN A BOOST.
THE INITIAL VALIDITY PERIOD OF DUTY-FREE LICENCE AND
EXPORT OBLIGATION IS BEING EXTENDED FROM 12
MONTHS TO 18 MONTHS WITH PROVISION FOR A FURTHER
EXTENSION OF THE EXPORT OBLIGATION PERIOD BY
6 MONTHS.

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