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International Trade Policy


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International Trade Policy

  2. 2. <ul><li>Presenting on the International trade policy </li></ul><ul><li>Mainly emphasize on “How to boost the exports?” </li></ul><ul><li>Have covered SEZ, Export oriented units and International Finance Service Center </li></ul>
  4. 4. What Is SEZ ? <ul><li>Demarcated land – Foreign territory - Trade operations </li></ul><ul><li>Growth engines – Boost manufacturing – Augment exports - Generate employment </li></ul>
  5. 5. Objective Of SEZ <ul><li>Boosting Export of Goods & Services </li></ul><ul><li>Earning Foreign Exchange </li></ul><ul><li>Attracting Foreign Investment </li></ul><ul><li>Generating Employment </li></ul><ul><li>Attracting latest technology into the country </li></ul><ul><li>Development of backward area </li></ul>
  6. 6. Incentives/Facilities at SEZ <ul><li>100% IT exemption for first 5 years & 50% exemption for next 5 years & thereafter 50% exemption for 5 years in case of reinvestment of profits. </li></ul><ul><li>Duty free imports/procurements of inputs, consumables, office or other capital goods. </li></ul><ul><li>Supplies by DTA to SEZ are physical export benefits. </li></ul><ul><li>Central Sales Tax exempted. </li></ul><ul><ul><ul><ul><ul><li>cont… </li></ul></ul></ul></ul></ul>
  7. 7. <ul><li>Positive NFE to be achieved over a period of five years </li></ul><ul><li>Trading units allowed to be set up in SEZ. </li></ul><ul><li>FDI of 100% permitted. </li></ul>
  8. 8. Development of SEZ in India <ul><li>Concept of SEZ introduced in EXIM policy (now FTP) announced on 31.03.00 </li></ul><ul><li>4 working EPZ converted to SEZ’s w.e.f 01.11.00 these are Kandla, SEEPZ, Kochi (Cochin- Kerala) & Surat. </li></ul><ul><li>Subsequently, EPZs at Chennai (Tamil Nadu), Falta (West Bengal), Noida (UP) & Vishakhapatnam (AP) were also converted into SEZ w.e.f 30.1.03 </li></ul>
  9. 9. Setting up of SEZ <ul><li>Liberal policy of Central Govt. </li></ul><ul><li>Set up in public, private, joint sector or by the Central Government or State Government, jointly or severally. </li></ul><ul><li>Proposals are considered by BOA. </li></ul><ul><li>Min 1000 hectares for Multi Product SEZ & 100 for sector specific, port or airport based SEZ. </li></ul><ul><li>For UT & Special category states 200 & 50 hectares respectively. </li></ul><ul><li>Max area of 5000 hectares. </li></ul>
  11. 11. Setting of EOU <ul><li>Setting up on an EOU involves formation of a business entity such as partnership firm or a Company registered under the Companies Act, 1956. </li></ul><ul><li>EOU units are setup under the Exim Policy and procedure formed by the Government of India, Ministry of Finance. Presently Exim Policy 2002-07 is in force.  </li></ul>
  12. 12. Eligibility <ul><li>Any entrepreneur for manufacturing of goods and rendering of services can set up an EOU. </li></ul><ul><li>Trading activity is not allowed in the EOU Scheme. </li></ul><ul><li>Required to achieve only positive Net Foreign Exchange (NFE) over a period of 5 years. </li></ul><ul><li>Sectors like agriculture, animal husbandry, aquaculture, floriculture, horticulture, pisciculture, viticulture, poultry or sericulture can be set up. </li></ul>
  13. 13. Procedure <ul><li>Application in a form prescribed is required to be made to concerned development commissioner of Special Economic Zone </li></ul><ul><li>Project Report including a write up on the background of the promoters establishing their credentials, experience and standing is required to be attached. </li></ul><ul><li>If the unit does not have an Import Export code (IEC), it needs to apply for it. </li></ul>
  14. 14. Green Card <ul><li>EOU unit is the most favoured unit in India. It gets a red carpet treatment in government departments. To recognize the EOU unit, a green card is issued to the unit. </li></ul>
  15. 15. Conversion of existing DTA unit into EOU: <ul><li>Conversion of an existing Domestic </li></ul><ul><li>Tariff Area (DTA) unit into an EOU may be permitted. For this purpose, the DTA unit may apply to the concerned DC, EPZ in the same manner as applicable to new units. </li></ul>
  16. 16. Entitlements/ benefits of EOU: <ul><li>No license required for import. </li></ul><ul><li>Exemption from Central Excise Duty in procurement of capital goods, raw - materials, consumables spares etc. from the domestic market. </li></ul><ul><li>Exemption from customs duty on import of capital goods, raw materials, consumables spares etc. </li></ul><ul><li>Reimbursement of Central Sales Tax (CST) paid on domestic purchase. </li></ul><ul><li>Supplies from DTA to EOUs treated as deemed exports. </li></ul><ul><li>EOU Units are entitled for Income Tax Exemption under section 10B of Income Tax Act. </li></ul>
  17. 17. Cont… <ul><li>Exchange earners foreign currency (EEFC) Account - Facility to retain 100% foreign exchange proceeds in EEFC Account. </li></ul><ul><li>Facility to realize and repatriate export proceeds within six months - Further extension in time period can be granted by RBI and their authorized dealers. </li></ul><ul><li>Exemption from industrial licensing requirement for items reserved for SSI sector. </li></ul><ul><li>Profits allowed to be repatriated freely. </li></ul><ul><li>Conversion of existing Domestic Tariff Area (DTA) unit into an EOU permitted. </li></ul>
  18. 18. Difference SEZ and EOU <ul><li>SEZ </li></ul><ul><li>Located within the specified zones </li></ul><ul><li>No such limit for SEZ </li></ul><ul><li>Goods can be sold in DTA with applicable tax </li></ul><ul><li>SEZ schemes are under control of Ministry of Commerce, Government of India </li></ul><ul><li>Trading activity is allow in SEZ </li></ul><ul><li>EO U </li></ul><ul><li>EOU unit can be set up at any of over </li></ul><ul><li>Minimum investment Rs 100 lakhs in P&M </li></ul><ul><li>All final production should be exported </li></ul><ul><li>EOU is stated in of Export and Import Policy </li></ul><ul><li>Trading activity is not allow in EOU </li></ul>
  20. 20. Role Of IFCs <ul><li>Ability to ‘balance through time the savings and investments of individual entrepreneurs and to transfer financial capital from savers to investors’. </li></ul><ul><li>Perform a medium of exchange function and an interspatial store-of-value function </li></ul>
  21. 21. What Is DIFC <ul><li>Promoted as a world-class onshore financial centre </li></ul><ul><li>The first step taken to establish the DIFC was the amendment of Article 121 of the Constitution of the United Arab Emirates </li></ul><ul><li>Law No. 8 of 2004 : Federal Law regarding the Financial Free Zones in the United Arab Emirates. Which allowed for the establish ment by Federal Decree of a Financial Free Zone in any Emirate of the United Arab Emirates. </li></ul>
  22. 22. DIFC focuses on the following financial services sectors: <ul><li>Banking Services : DIFC offers a wholesale platform for investment in banks and financial intermediaries and to take advantage of the numerous associated opportunities in the region. </li></ul><ul><li>Capital Markets : The Dubai International Financial Exchange (“DIFX”) provides a liquid and transparent market. </li></ul>
  23. 23. Continue … <ul><li>Asset Management & Fund Registration : The DIFC offers a highly attractive opportunity for asset management firms and private banks to gather and manage the growing pool of assets closer to their client base. </li></ul><ul><li>Insurance and Reinsurance: DIFC has set out to create a global reinsurance hub to foster the development of a thriving insurance market by attracting global insurance and reinsurance companies, brokers, captives and other service providers. </li></ul>
  24. 24. Other Financial Services are: <ul><li>Islamic Finance </li></ul><ul><li>Business Processing Operations </li></ul><ul><li>Ancillary Service Providers </li></ul><ul><li>Accepting deposits   </li></ul><ul><li>Providing Credit </li></ul><ul><li>Providing money services </li></ul><ul><li>Arranging credit or deals in Investments </li></ul>
  25. 25. What does the DIFC offer? <ul><li>100 percent foreign ownership. </li></ul><ul><li>Zero percent tax rate on income and profits. </li></ul><ul><li>Freedom to repatriate capital and profits without restrictions. </li></ul><ul><li>An extensive tax treaty network for UAE incorporated entities. </li></ul><ul><li>Internationally accepted laws and regulatory processes. </li></ul>
  26. 26. Procedure for setting up in DIFC <ul><li>  Financial Institutions are required to provide: </li></ul><ul><li>A business plan; </li></ul><ul><li>2. Names of key staff, major shareholders (above 5%) and controllers, as well as confirmations as to their fitness and propriety to conduct the Institution’s business. </li></ul><ul><li>3. The organizational structure of the proposed institution </li></ul><ul><li>4. Information on operating systems and controls   </li></ul>
  27. 27. Continue … <ul><li>5. The Institution’s compliance system and internal audit functions.  </li></ul><ul><li>6. Anti money laundering procedures and controls; and </li></ul><ul><li>7. The financial position and regulatory history of the applicant institution. </li></ul>
  28. 28. Capital Requirements for Authorised firms <ul><li>An Authorised Firm must have, at all times, capital resources of at least the amount of its capital requirement; </li></ul><ul><li>An Authorised Firm must have systems and controls enabling it to determine and monitor its capital requirement; and   </li></ul><ul><li>An Authorised Firm may be required to calculate a Credit Risk Capital Requirement and a Market Risk Capital Requirement. </li></ul>
  29. 29. Presentation By: <ul><ul><li>GROUP - 9 </li></ul></ul><ul><ul><li>AKSHITA PACHAURI </li></ul></ul><ul><ul><li>ADITYA BHUTANI </li></ul></ul><ul><ul><li>GAUTAM JAJU </li></ul></ul><ul><ul><li>RONAK JAIN </li></ul></ul><ul><ul><li>TANESH KOTHARI </li></ul></ul>