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ROLE OF DGFT INFOREIGN TRADE POLICY

BY -SWATI SHARMA

ABHINEET KHARDRUPALI AGARWALTARUN CHAWLADINESH BEHERA

SIIB-AB (GROUP 6)2012-2014

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FOREIGN TRADE POLICY OREXIM POLICY

Exim Policy , also known as the Foreign Trade Policy is announced

every 5 years by Ministry of Commerce and Industry, Government ofIndia. It is updated every year on the 31st of March and all theamendments and improvements in the scheme are effective fromthe 1st of April.Exim policy deals in general provisions pertaining to exports and

imports, promotional measures, duty exemption schemes, exportpromotion schemes, special economic zone programs and otherdetails for different sectors.

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FOREIGN TRADE POLICY

It is the exchange of goods and servicesbetween nations. International trade enables anation to specialize in those goods it can

produce most cheaply and efficiently.Trade also enables a country to consume morethan it would be able to produce if it dependedonly on its own resources.Trade has always been the major force behindthe economic relations among nations.

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A Little Bit of History

Scenario pre 1991Requirement for licensesThe inspector rajBureaucratic controlsComplex legislations & manufacturerprotective policies

High import duties

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A Little Bit of History contdScenario post 1991

End of licensed raj A marked shift from protecting producers to benefitingconsumers.Process of global integration of Indian economycommencedMarkets opened up for import, simplification in rulesDrastic cut in import duties

Emergence of world wide production, broader access tofactors of production in a range of foreign destinationsOur merchandise exports till 1991 (in 44 years after independence)were US$ 17.86 b and in the last 20 years these have grown (in2010-11) to US$ 246 b

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Objectives of Foreign TradePolicy 2009-14

To arrest and reverse declining trend of exports is the main aimof the policy. This aim will be reviewed after two years.

To Double Indias exports of goods and services by 2014.

Simplification of the application procedure for availing variousbenefits

To set in motion the strategies and policy measures which catalysethe growth of exports

To encourage exports through a mix of measures includingfiscal incentives, institutional changes, procedural rationalization,and efforts for enhance market access across the world anddiversification of export markets.

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WHAT IS DGFT ?The Directorate General of Foreign Trade(DGFT) is an organization under the MINISTRYOF COMMERCE AND INDUSTRY of thegovernment of India. it was formed in 1991 afterthe liberalization.Its headquarter is in Delhi. It has four zonal offices inDelhi,Mumbai,Kolkata,Chennai.It has 35 regional offices in different cities all

over the country.

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History OF DGFT

Earlier it was known as Chief Controller ofImports & Exports (CCI&E) till 1991. Tillliberalization it worked as controller butafter liberalization there was a need of abody which not only controls import andexport but also to promote and take

forward those industries which are in direcondition and then it was termed asDGFT.

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FUNCTION ANDRESPONSIBILITY

To provide Importer Exporter Code Number (IEC) to Indian Exporter and Importers.

IEC is a 10 Digit unique code which is mandatory to all importers andexporters to operate business in India and enable company to acquirebenefit on import and export.

http://www.eximguru.com/iec-code/default.aspxhttp://www.eximguru.com/iec-code/default.aspxhttp://www.eximguru.com/iec-code/default.aspx

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Registration Procedure & Licensing Importer Exporter Code (IEC)

Obtaining the IEC number DGFT provide exporter a unique 10 digit IECcode number required for export or import. No

export allowed without IEC number. Application for IEC number to be submitted tothe nearest regional authority of DGFT.

Application form known as "Aayaat Niryaat

Form - ANF2A" can also be submitted online atthe DGFT web-site: http://dgft.gov.in.

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Registration Procedure & Licensing -Importer Exporter Code (IEC) (contd.)

Pre-requirements for IEC applicationPAN No. from IT authorities,a bank account in the name of your company with anycommercial bank authorized to deal in foreign exchange

Application to be accompanied by relevant documentsValidity & features of IEC number

Issued in a prescribed format

Valid for all braches/divisions/units/factories of thecompany as indicated on the IEC number

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DEPB means Duty Entitlement Pass Book to neutralise

the incidence of basic and special customs duty onimport content of export product. This is provided by way of grant of duty credit againstthe export product at specified rates. The DEPB Scheme

which was notified on 1/4/1997 consisted of (a) Post-export DEPB and (b) Pre-export DEPB. The pre-exportDEPB scheme was abolished w.e.f. 1/4/2000. Under the post-export DEPB, which is issued afterexports, the exporter is given a duty entitlement PassBook at a pre-determined credit on the FOB value. TheDEPB allows import of any items except the items whichare otherwise restricted for imports.

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ITC HS CODE- Indian Trade Clarification basedon Harmonized System of Coding was adopted in Indiafor import-export operations. Indian custom uses aneight digit ITC-HS Codes to suit the national traderequirements .Governing Body of ITC (HS) Code - Anychanges or formulation or addition of new codes in ITC-HS Codes are carried out by DGFT Commoditydescription, weeding out of defunct codes, addition ofnew codes, change of product description etc., are takenup periodically as a part of the ongoing process towardsperfection

http://www.eximguru.com/exim/indian-customs/default.aspxhttp://www.eximguru.com/hs-codes/dgft-2007.aspxhttp://www.eximguru.com/hs-codes/default.aspxhttp://www.eximguru.com/hs-codes/default.aspxhttp://www.eximguru.com/hs-codes/default.aspxhttp://www.eximguru.com/hs-codes/default.aspxhttp://www.eximguru.com/hs-codes/default.aspxhttp://www.eximguru.com/hs-codes/dgft-2007.aspxhttp://www.eximguru.com/hs-codes/dgft-2007.aspxhttp://www.eximguru.com/hs-codes/dgft-2007.aspxhttp://www.eximguru.com/exim/indian-customs/default.aspx

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Setting standard input-output norms isalso controlled by the DGFT.To promote trade with neighbouringcountries.DGFT perform its functions in coordinationwith state governments and all the otherdepartments of Ministry of Commerce andIndustry, Government of India.

cont

http://www.eximguru.com/ionorms-sion/default.aspxhttp://www.eximguru.com/ionorms-sion/default.aspxhttp://www.eximguru.com/ionorms-sion/default.aspxhttp://www.eximguru.com/ionorms-sion/default.aspx

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DGFT permits or regulate Transit ofGoods from India or to countries adjacentto India in accordance with the bilateraltreaties between India and other countries.It keeps track on illegal activities likesmuggling etc.DGFT has important role to issuenotification, public notices, circular andforeign laws.

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SCHEMES OF DGFT

Technological Up gradation- To aidtechnological up gradation of our export sector.Scheme will be available for engineering & electronicproducts, basic chemicals & pharmaceuticals, apparels& textiles, plastics, handicrafts, chemicals & alliedproducts and leather & leather products

EPCG Scheme Relaxations-The Expor t PromotionCapital Goods (EPCG) scheme was one of the several

export-promotion initiatives launched by the governmentin the early '90s. The basic purpose of the scheme wasto allow exporters to import machinery and equipment ataffordable prices so that they can produce qualityproducts for the export market.

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The import duty on capital goods like all other items

was high during that period, inflating the cost of capitalgoods nearly 50%, so the government allowed exportersto import capital goods at only 25% import duty. For waiverof the remaining portion of import duty, exporters weresupposed to undertake an 'export obligation' (a promise toexport) which was worked out on the basis of the dutyconcession obtained.

Agriculture Sector -To reduce transaction andhandling costs, a single window system to facilitateexport of perishable agricultural produce has beenintroduced. The system will involve creation of multi-functional nodal agencies to be accredited by APEDA.

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Tea- Minimum value addition under advanceauthorisation scheme for export of tea has beenreduced from the existing 100% to 50%. DTA sale limitof instant tea by EOU units has been increased from theexisting 30% to 50%. Export of tea has been coveredunder VKGUY Scheme benefits .EOUs-EOUs have been allowed to sell products

manufactured by them in DTA upto a limit of 90%instead of existing75%, without changing the criteria of similar goods, within the overall entitlement of 50% forDTA

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FTP 2004-09

Changes Brought about in India as perFTP of 2009:In the last five years our exports witnessed robust growthto reach a level of US$ 168 billion in 2008-09 from US$63 billion in 2003-04. Our share of global merchandisetrade was 0.83% in 2003; it rose to 1.45% in 2008 asper WTO estimates. Our share of global commercialservices export was 1.4% in 2003; it rose to 2.8% in

2008. Indias total share in goods and services tradewas 0.92% in 2003; it increased to 1.64% in 2008. Onthe employment front, studies have suggested thatnearly 14 million jobs were created directly or indirectly

as a result of augmented exports in the last five years.

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FTP 2009-14The short term objective of our policy is to arrest andreverse the declining trend of exports and to provideadditional support especially to those sectors which havebeen hit badly by recession in the developed world. Wewould like to set a policy objective of achieving anannual export growth of 15% with an annual exporttarget of US$ 200 billion by March 2011. In theremaining three years of this Foreign Trade Policy i.e.

upto 2014, the country should be able to come back onthe high export growth path of around 25% per annum.By 2014, we expect to double Indias exports of goodsand services. The long term policy objective for theGovernment is to double Indias share in global trade by2020

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What is Govt doing for thesame:

In order to meet these objectives, the Government wouldfollow a mix of policy measures including fiscalincentives, institutional changes, proceduralrationalization, enhanced market access across theworld and diversification of export markets. Improvementin infrastructure related to exports; bringing downtransaction costs, and providing full refund of all indirecttaxes and viilevies, would be the three pillars, which will

support us to achieve this target. Endeavour will bemade to see that the Goods and Services Tax rebates allindirect taxes and levies on exports.

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BIBLIOGRAPHY.

www.dgft.orgFTP 2009-2014, GOI

www.answers.comwww. commerce .nic.in/

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THANK YOU