the dollar business may 2015 issue

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Vol.2 Issue 05 May 2015

100 $5 RNI: APENG/2014/54643

FOREIGN TRADE . EXPORTS . IMPORTS

www.thedollarbusiness.com Vol.2 Issue 05 May 2015 100 $5

DOES INDIA’S NEW FOREIGN TRADE POLICY MEET EXPECTATIONS?

So new? So few?

SandstoneIt makes Rajasthan royal

Can the fortunes of India’s sandstone industry be reversed?

FTAsTemporary solutions

Do they bring anything to the table other than headlines?

Glues & AdhesivesFor sticky profits

Inadequate domestic production means big margins for importers

PRAVIR KUMARDirector General, DGFT,

Ministry of Commerce, GoID. K. SINGH

Additional Director General, DGFT, Ministry of Commerce, GoI

AMIT AGARWALVP & Country Head, Amazon India

M. S. UNNIKRISHNANMD & CEO, Thermax

PIERRE LIGNOTBusiness France Director,

Indian SubcontinentVINOD SHARMA

Chairman, ESC...AND MORE!

EXCLUSIVE INSIDE

28 THE DOLLAR BUSINESS II MAY 2015

COVER STORY FOREIGN TRADE POLICY 2015-2020



MAY 2015 II THE DOLLAR BUSINESS 29

India’s new Foreign Trade Policy is great in terms of simplifying the complex, but lacks innovation. Much planning would have gone into its preparation, but no page in the document reads out-of-the-box. It will ease doing business, but it probably won’t help initiating business. It treats both merchandise and services exports alike, but the treatment is nothing special. It has several provisions to boost domestic manufacturing, but none of them can be labelled a game changer. Bottom line – the new FTP, which was released this time on a day meant to celebrate practical jokes and hoaxes – after a delay of almost a year – is about incremental progress. But whether it can handhold India past the many wide waters is an open question.

The Dollar Business presents exclusive analyses of some highlights of the new Foreign Trade Policy

FOREIGN TRADE POLICY 2015-2020

MERCHANDISEEXPORTSFROM INDIASCHEME (MEIS)SERVICEEXPORTFROM INDIASCHEME (SEIS)DUTYREMISSIONANDEXCEMPTION

DEEMED EXPORTS/EOUs/BTPs/EHTPs/STPsEXPORT PROMOTION CAPITAL GOODS (EPCG)

So new? So few?



MAY 2015 II THE DOLLAR BUSINESS 31

“THE NEW FTP WAS WORTH THE WAIT OF A YEAR!”Some consider India’s new Foreign Trade Policy an inspiring manoeuvre. Others classify it as just incremental. Whatever popular opinion be, Pravir Kumar, feels that minus some miracles, the new policy has what it takes to make India an unsinkable titanic on the high, trading seas. And that nothing’s perfect. BY STEVEN PHILIP WARNER (EDITOR-IN-CHIEF, THE DOLLAR BUSINESS) & NEHA DEWAN

A TDB EXCLUSIVE: DGFT ON THE FOREIGN TRADE POLICY 2015-20

TDB: What stands out most distinc-tively about MEIS is the fact that it is a simplified combination of a few Chap-ter 3 schemes that offered unique duty credit scrips with varying conditions that existed in the earlier policy. Is it just as they say, “a simplified combina-tion of schemes”?DGFT: Most importantly, we have re-moved all the confusion and overlap-ping that existed in the previous Foreign Trade Policy. For example, in the previ-ous FTP, there were common products under Focus Product Scheme (FPS) and Vishesh Krishi and Gram Udyog Yojana (VKGUY). So there was a lot of overlap-ping. But the most fundamental change that has occurred in the new FTP is the change in usability of the scrips. Earlier, scrips were not usable across-the-board. For example, in the case of Agri-Infra-structure Incentive scrip, actual user condition existed and it was to be used for a very narrow list of items. Similarly, there were scrips which were transfer-able. Like SHIS. The scheme has ended but the scrips continue. In the earlier version of SHIS, the scrips were subject

to actual user condition with transfer-ability permitted only amongst status holders. So it was again not freely trans-ferable. What was happening was that in terms of revenues, if it was a Rs.100 scrip issued by the government, the govern-ment would definitely lose Rs.100. But the exporter who has actually worked hard and contributed to the exports and forex earnings of the country, he would only get a part, discounted value of the scrips given. Because if he has little use of the scrip, and sells it in the market, then he will not get the full value. Now, it is fully transferable and usable against cus-toms duty, excise duty, as well as service tax. So the scrips can be used against any of the three. Earlier people used to com-plainingly question that if they didn’t have any import requirement, what were they supposed to do with the scrips? So if a particular exporter has exported and earned a reward, and he has no import requirement then how does he use it. Now he can use it for excise duty and service tax payment. And if nothing, he can simply transfer and encash it. So the reward would fully go to the exporter. Moreover, now, not only the scrips are transferable, the goods procured using the scrips are also transferable. Earli-er that was also a constraint. We have cases like that and there are litigations going on in some cases regarding com-panies that desired to transfer goods after two years. The products imported were no longer usable after some time for some reason or the other – either

WE’VE REMOVED MUCH CONFUSION & OVERLAPPING THAT EXISTED IN THE PREVIOUS FOREIGN TRADE POLICY

Pravir KumarDirector General,

Directorate General of Foreign Trade (DGFT),

Ministry of Commerce & Industry, GoI

Exclusive Interview

the dollar business may 2015 issue

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