So what is the Exim Policy all about?

. The policy is usually announced by the Union Minister of Commerce and Industry who coordinates with the Ministry of Finance, the Directorate General of Foreign Trade and its network of regional offices. Whom does it apply to? The regulations and restrictions apply to those involved in commercial trade through the export and import of items. This becomes particularly important in a country like India, where the import and export of items does play a crucial role not just in balancing budgetary targets, but also from an economy developmental viewpoint. Exports in India are finally witnessing an upward trend at an estimated growth rate of 20 per cent in the last few months. This is an encouraging and heartening sign of things to come and the government's efforts should now be focussed to increase and sustain this recent upswing in Indian exports. By announcing a separate policy what is the government attempting to achieve? The main aim is to accelerate the country's transition to a vibrant economy and a leading global player with a view to derive maximum benefits from any expanding global market opportunity. Thus providing access to essential raw materials, intermediates, components, consumable items and capital goods required to aid manufacture/production of items to boost economic growth will be encouraged. Attention will also be paid towards improving the state of various key sectors like agriculture, industry and manufacturing sectors, making them competitive strength and generating new employment opportunities. This is done with the final aim to provide the Indian consumer with good quality products at reasonable prices. All this sounds fine on paper. But then haven't things gone awry with India's policies over the years? That has less to do with policies and more with prevailing circumstances. There have been several factors responsible for the previously disheartening performance of Indian exports. Over the past two years, large developed economies have witnessed a general slowdown in the manufacturing, trade and consumer-spending front. Over the years, non-tariff barriers have also come up through the developed nations due to environmental concerns, technical and non-technical standards and the spurt of regional

groupings. This has made it difficult for countries outside the group to penetrate and compete on an equal footing. We cannot, however, blame the performance on global factors alone. Our exports share of approximately 0.7 per cent as a percentage of global trade is due to internal problems rather than external factors. Some of these factors include high interest on export credit, uncertainty in export policy and infrastructure constraints. Paradoxically, these very low exports helped India beat the economic recession facing the entire world as it was less dependent on external factors. What were the import restrictions? The Exim Policy prohibits import of certain categories of products, provides for conditional import of certain items while a majority of goods are now freely importable. A process called canalisation exists for some categories - which means these can be imported only by designated agencies. What is the canalised list? A number of items like urea are canalised. This means they can be imported only by designated agencies like MMTC and STC, the government's trading arms. An item like gold, in bulk, can be imported only by specified banks like SBI and some foreign banks or designated agencies. Earlier, items like sugar, edible oil, wheat and rice used to be imported by the government through canalising agencies to meet domestic demand. However, ongoing liberalisation has led to many of these items becoming freely importable. The items which are freely importable fall under the open general licence category. The OGL is also called the free list of imports - which means anybody is allowed to bring in items listed under this category. There are various kinds of restrictions on imports. The banned or prohibited list contains sensitive items like explosives which are banned for security reasons. Then there are items which are banned for environment and pollution-related aspects. Several items like wildlife and its related products are not permitted to be imported following international agreements. These items can only be imported for specific purpose with prior permission. So which are the items which can be imported? There are a large number of non-sensitive items - mostly consumer goods - which are currently allowed only if the importer gets a licence. This would relate to food and beverages products which hotels can import with a specific licence.

What are the current export promotion schemes? The government had devised a number of schemes to provide incentives to exporters and encourage them to compete in the global market. Allowing them to import raw materials free of any duty ensured this. Advance licence, Export Promotion Capital Goods (EPCG) scheme, SIL and the duty exemption pass book (DEPB) are among the incentive schemes. These schemes were attractive when the customs duty levels were high, but these are losing their importance in view of the continuous reduction in import duty. What is the SIL product? There are products which could be imported against an instrument called SIL (Special Import Licence). This was awarded to exporters on the basis of their annual turnover. Exporters sell SIL in the market for a premium to improve their profits. This category has been reduced substantially in the past few years as more items have moved to the OGL category. Over the past year, the SIL list has virtually ceased to exist, leaving only the prohibited list in the negative list category. The prohibited list would thus consist of sensitive items like arms and ammunition, toxic waste and environmentally sensitive items. In earlier years, since the items on the SIL list were not freely importable, one had to buy SIL and surrender it to the Directorate General of Foreign Trade (DGFT) to get permission to import these items. The focus will be to lower transaction costs for players and make exports more competitive. The forthcoming Exim Policy is set to continue with the existing system of canalising procurement of petrol and diesel through state trading companies. This means that if any multinational such as Shell sets up a retail outlet and imports products from its Singapore refinery for retailing though these outlets, they would require to canalise it through an Indian trading company like Indian Oil Corporation. Media reports say that the finance ministry is expected to provide some benefits to suppliers. This would include tax breaks (possibly in the form of a service tax exemption) to all suppliers who send goods from the domestic tariff area (DTA) to the special economic zone (SEZ). From a procedural point of view, a small committee may be set up to address procedural delays and provide a conducive environment for hardware manufacturing. The ministry of commerce and industry in the previous Exim Policy had discussed this issue.

So what will be the focus in coming years? The Exim policies in coming years will focus on the need to allow exporters to concentrate on the manufacture and marketing of their products globally with very few discretionary controls and procedural delays. The policy should enable the industry to enhance its competitiveness in the global markets and achieve its full potential in the areas of its strength

Exim Policy 2010 - 2011 New

Highlights of the Annual Supplement 2010-11 to the Foreign Trade Policy 2009-14

Additional benefit of 2% bonus, over and above the existing benefits of 256 new products added under FPS (at 8 digit level), which shall be Tea and CSNL Cardinol included for benefits under VKGUY @ 5% of FOB Zero duty EPCG scheme, introduced in August 2009 and valid for only two Duty Entitlement Passbook (DEPB) scheme has been extended beyond Concessional Export Credit: Interest subvention of 2% for pre-shipment

5% / 2% under Focus Product Scheme, allowed for about 135 existing products. entitled for benefits @ 2% of FOB value of exports to all markets. value of exports. years upto 31.3.2011, has been extended by one more year till 31.3.2012. 31.12.2010 till 30.06.2011. credit for export sectors namely, Handloom, Handicraft, Carpet and SMEs for all export sectors.

Exporters shall now have the flexibility to get a high value EPCG Clarification on the availability of 4% SAD refund benefit. Facility of a data preparation module for Advance Authorization and

authorisation by filing their EPCG application on Annual basis.

Export Promotion Capital Good (EPCG) has been provided on an offline mode.

Finished Leather export shall be entitled for Duty Credit Scrip @ 2% Duty free import of specified trimmings, embellishments etc. shall be Readymade Garment sector granted enhanced support under MLFPS for a

under FPS. available on Handloom made-ups exports @ 5% of FOB value of exports. period of further 6 months

Export Import Policy or better known as Exim Policy or Foreign Trade Policy is a set of guidelines and instructions related to the import and export of goods. Objectives of Exim Policy :

To facilitate sustained growth in exports from India and import in India. To stimulate sustained economic growth by providing access to essential raw

materials, intermediates, components, consumables and capital goods scheme required for augmenting production and providing services.

To enhance the technological strength and efficiency of Industry Agriculture industry

and services, thereby improving their competitive strength while generating new employment opportunities, and to encourage the attainment of internationally accepted standards of quality.

To provide clients with high-quality goods and services at globally competitive rates.

Canalization is an important feature of Exim Policy under which certain goods can be imported only by designated agencies. For an example, an item like gold, in bulk, can be imported only by specified banks like SBI and some foreign banks or designated agencies.

Indian Exim Policy Enlightened

The Ministry of Commerce and Industry, Government of India, pronounces the Indian exim policy or Export-Import of India. This is an attempt towards the support of foreign trade and creation of a approving Balance of Payments. The new EXIM policy of India, renewed yearly on 31st of March, is pursued from 1st April. Exim policy of India is also known as Foreign Trade Policy, in general, it plans at increasing export prospective, improving export routine, encouraging foreign trade and creating constructive balance of payments position.

Some of the principal highlights of the new exim policy of india are: Expansion of the DEPB scheme till May, the next year. Refunding of service tax on utmost services Expanding Income tax benefit for EOUs. Expansion of FMS coverage and addition of ten more countries including Mongolia, Croatia, Ghana, Colombia, Albania, etc. Beginning of split-up facility Payment of expurgate duty by export leaning units on monthly basis rather than consignment basis. History of export-import policy of India In the year 1962, the Government of India selected a special Exim Policy Committee to review the government preceding policies of export import (Indian Exim policy). The committee was afterward permitted by the Government of India. Mr. V. P. Singh, the then Commerce Minister and pronounced the new Exim Policy of India on the 12th of April, 1985. Primarily the Export-Import Policy of India was launched for the period of three years with main intention to boost the export business in India. Documents in Indian Exim policy The description of exim policy of India is given in following documents: Interim New Exim Policy 2009 - 2010 Exim Policy: 2004- 2009 Handbook of Procedures Volume I Handbook of Procedures Volume II ITC(HS) Classification of Export- Import Items New Exim policy of India objectives: With the help of exim policy of India, the government looks after controlling the import of unnecessary items. Hence these objectives can be summarized as follows: To hasten the economy from low level of economic behavior to high level of economic activities by making it a worldwide oriented vivacious economy and to receive utmost benefits from escalating global market opportunities. To arouse constant economic growth by providing access to necessary raw materials, intermediates, components, consumables and capital goods mandatory for enlarging production. To augment the techno local strength and effectiveness of Indian agriculture, industry and services, thus, improving their competitiveness. To produce new services, opportunities and support the accomplishment of internationally accepted standards of quality. To offer worth consumer products at rational prices. Indian exim policy governing body The Government of India advises the Exim Policy of India for a phase of five years (1997-2002) under Section 5 of the Foreign Trade (Development and Regulation Act), 1992. The current Export- Import Policy of India covers the period 2009-20014. The Exim Policy is renewed every year on the 31st of March and the revisions, improvements and new proposals and designs become effective from 1st April of every year. All forms of updating or modifications associated to the Indian Exim Policy is normally proclaimed by the Union Minister of Commerce and Industry who synchronizes with the Ministry of Finance, the Directorate General of Foreign Trade and network of Dgft Regional Offices. However, the central government reserves the right to alter any of the sections of this new export-import policy of India in public interest. Some of the focus proposals of the policy are: To have a larger share in the global trade and produce more employment prospects, a number of focus initiatives that have been identified for diverse sectors are: agriculture, handloom, handicraft, gems and jewellery etc.