Project report on

Export Procedure and performance since 2001 in India

ACKNOWLEDGEMENT
Before we get into thick of things, I would like to add a few words of appreciation for
the people who have been a part of this project right from its inception. The writing
this project has been one of the most significant academic challenges I have faced
and without the support, patience, and guidance of the people involved, this task would not
have been completed. It is to them I owe my deepest gratitude.
.

2
Executive Summury

India has a mission to capture 2% of the global share of trade by

20010, up from the present level of less than 1%. Export is one of the
lucrative business activities in India. The government also provides various
promotional schemes to the exporters for earning valuable foreign exchange
for the country and for meeting their requirements for importing modern
technology and essential inputs. Besides, the income from export business is
also exempted to the specified extent under the Income Tax Act, 1961,
Refund of Central Excise and Custom Duty on export is also made under the
Duty Drawback Scheme of the Government. There is no Sales Tax on
products meant for exports.

Exports can be of goods which can be moved physically from one country to
another or can be of service rendered. Detailed list of services are given in the Foreign Trade
Policy covering more than 160 items e.g. Insurance, Hospital, Postal and Telecommunication etc.

3
Contents
Export Procedure..................................................................................................................... 3
Stages in export procedure.................................................................................................. 3
Preliminary Stage................................................................................................................. 4
1) Organizing .................................................................................................................. 4
2) Registering with various authorities -...........................................................................4
3) Appointing Agent / Distributors ..................................................................................5
4) Approaching Foreign Buyers .......................................................................................5
PRE-SHIPMENT STAGE.......................................................................................................... 5
1) Confirmation of order ................................................................................................. 5
2) Obtaining Letter of credit ........................................................................................... 5
3) Obtaining pre-shipment Finance .................................................................................6
4) Obtaining Export License, if necessarys ....................................................................6
5) Production and Procurement of goods ........................................................................6
6) Packing and Marketing ............................................................................................... 6
7) Pre-shipment Inspection ............................................................................................. 7
8) Central Excise Clearance ............................................................................................ 7
9) ECGC cover ................................................................................................................ 7
10) Marine Insurance policy ........................................................................................... 7
11) Appointment of clearing and Forwarding Agent .......................................................7
SHIPMENT STAGE................................................................................................................. 8
1) Reservation of space in the ship ................................................................................8
2) Preparation and processing of shipping documents ...................................................8
3) Physical Examination of goods at the port .................................................................8
4) Loading of goods ........................................................................................................ 8
POST-SHIPMENT STAGE........................................................................................................ 9
1) Dispatch of Documents .............................................................................................. 9
2) Shipment font advice to importer ...............................................................................9
3) Presentation of Documents to the Bank .....................................................................9
4) Realization of export proceeds ...................................................................................9
5) Follow-up of Export sales .......................................................................................... 10
Methods of Payment in International Trade...........................................................................10
Key Points....................................................................................................................... 10
Cash-in-Advance............................................................................................................. 11
Documentary Collections................................................................................................ 12
Open Account................................................................................................................. 12

4
 Consignment................................................................................................................... 13
Export Performance............................................................................................................... 13
Indias Export:.................................................................................................................... 13
Indias Merchandise Trade:.................................................................................................14
Share of Principle Commodities:......................................................................................... 16
Primary Products export:................................................................................................. 17
Export of Manufactured goods:.......................................................................................30
Composition of Manufactured goods:..............................................................................31
Engineering Goods:......................................................................................................... 31
India Export of Services......................................................................................................... 36
Communication Services:................................................................................................... 37
Financial Services:......................................................................................................... 37
Software Services:......................................................................................................... 38
Transport Services:........................................................................................................ 38
Travel Services:............................................................................................................... 38
Key Statistics.................................................................................................................. 39
Composition of Export of Services......................................................................................40
Indias Export To Foreign Countries.......................................................................................43
Association of South East Asian Nations (ASEAN)...............................................................43
2. Latin America................................................................................................................. 45
3. North America................................................................................................................ 47
4. Africa.............................................................................................................................. 48
5. European Union.............................................................................................................. 50
New foreign trade policy 2009-2014.....................................................................................52
Highlights of the new foreign trade policy are as under:-...................................................52
Technological Up gradation................................................................................................ 53
EPCG Scheme Relaxations.................................................................................................53

Export Procedure
Stages in export procedure

Export procedure involves a number of steps. The various steps

can be classified into four stages

EXPORT PROCEDURE

5
 Stage I Stage II Stage III Stage IV
Pre- Post-
Preliminary Shipment
shipment Shipment
Stage Stage
Stage Stage

Preliminary Stage

1) Organizing

The exporter should have an organization to look after exports.

Exporters may set up a complete new organization or add on
export section to an existing one. At this stage the exporter may
take a decision to select the right product sell abroad.

2) Registering with various authorities-

The exporter should register his organizations with various

authorities. These are as follows:

Income Tax Authorities to obtain permanent Account Number

(PAN).

Jt. DGFT to obtain Importers exporters code Number

(IEC No.)

EPC to obtain Registration cum membership certificate

(RCMC)
6
Other authorities, such as FIEO, sales Tax authorities, chambers of
commerce etc.

3) Appointing Agent / Distributors

It is advisable to appoint agents or distributors in the selected

overseas markets. The exporter may also open branches or sales
divisions or depute permanent representative abroad.

4) Approaching Foreign Buyers

The overseas agents / representatives approach foreign buyers

with a quotation. The foreign buyer, if satisfied with the quotation
and after clarifications, if any, will place an order with the
exporter.

PRE-SHIPMENT STAGE

1) Confirmation of order

When the buyer is satisfied with the terms and conditions of the
seller, he will place either a formal or confirmed order along with
a signed copy of the contract. The exporter should acknowledge
and confirm the receipt of such order.

2) Obtaining Letter of credit

7
Together with the acknowledgement letter confirming the receipt
of an export order, the exporter may send a formal request to the
importer to open a letter of credit in his favour.

3) Obtaining pre-shipment Finance

As soon as the exporter receives a confirmed order and the L/C,

he should approach his bank for securing pre-shipment finance to
meet his working capital requirements.

4) Obtaining Export License, if necessarys

Export control is exercised to a limited extent in India. The

problem of obtaining export license arises only in the case of a
few controlled items. Otherwise, export business has been
delinked.

5) Production and Procurement of goods

Soon after securing the pre-shipment advance from bank, the

exporter has to arrange for production and procurement of goods
for shipment. A manufacturer exporter himself undertakes the
entire process of production.

6) Packing and Marketing

After procuring the goods meant for export, the exporter has
to arrange for proper packing and marking of the goods.
Packaging must ensure proper protection of the goods. The
packing material should be selected after considering the

8
distanceto be covered, mode of transportation, types of handling
of the goods at ports etc.

7) Pre-shipment Inspection

If the export cargo is subject to qualify control and pre-shipment

inspection, the exporter should get in touch with EIA to obtain
Inspection certificate.

8) Central Excise Clearance

Goods meant for export are exempted from the payment of excise
duty. Excise clearance is obtained by two methods

a) Export Under Rebate and b) Export under Bond.

9) ECGC cover

The exporter must take appropriate policy to protect him from

credit risk.
10) Marine Insurance policy

In order to protect the cargo from perils on high sea, the exporter
has to obtain marine insurance policy. Payment of insurance
premium depends on the type of price quotation accepted by the
importer.

11) Appointment of clearing and Forwarding Agent

9
It is always advisable to appoint C & F agent to look after
forwarding work which includes booking of shipping space,
preparing and submitting various documents to customs.

SHIPMENT STAGE

1) Reservation of space in the ship

The exporter has to contact the shipping company well in

advance for booking the required space in the vessel for shipment
of his consignment. He has to provide necessary information as
regards date of shipment, gross and net weight of each package,
particulars of the importer and that of his own, arrival and
departure date of the vessel etc. when shipping company accepts
the exporters request, the company or its agent issues shipping
order.

2) Preparation and processing of shipping documents

When goods reach the port of shipment, the exporter has to

arrange for preparation of a complete set of documents to be
passed on to the forwarding agent.

3) Physical Examination of goods at the port

The C & F agent obtains the carting order from the Port Trust to
Cart the goods inside the docks. He then approaches the custom
Examiner, who may physically inspect the goods. The custom
Examiner then gives Let Export order.

10
4) Loading of goods

The duplicate copy of shipping bill which is endorsed by the

custom Examiner is handed over to the custom preventive officer,
who endorses it with Let ship order. The goods are then loaded
on board the ship, for which Mates Receipt is issued by the mate
of the ship. The Mates Receipt is handed over to the shipping
company to obtain Bill of Lading.

POST-SHIPMENT STAGE

1) Dispatch of Documents

Dispatch of documents by C & F Agent to the exporter. The details

and the mode of dispatch of the shipping documents are specified
in the L/C. negotiating, in this sense, implies mailing of
dispatching a set of documents to ensure that the importer or his
agent receives the same in time so that he can delivery of the
exported goods.

2) Shipment font advice to importer

After the shipment of goods, the exporter has to sent suitable

intimation to the importer for his information. By this intimation,
the date of shipment, the name of the vessel, date on which the
goods will reach the destination should be informed to the
importer. A copy of non-negotiable bill of lading is also sent for
information. The importer gets the remaining documents through
his bank.

11
3) Presentation of Documents to the Bank

A complete set of documents is submitted by the exporter to his

bank for the purpose of negotiating the same and obtaining
export proceeds in time. The bank then sends the same
documents to the exporter.

4) Realization of export proceeds

The exporter then proceeds to claim export incentives on the

basis of bank certificate. The bank certificate gives description
ofthe product, its value, the rate of conversion, the details of
invoice etc. The exporter is entitled to various incentives such as
IPRS, DBK and other incentives, it applicable.

5) Follow-up of Export sales

A good exporter should always have a follow-up after sales i.e. he

should provide necessary after sale service, find out buyers
opinion towards the product and so on, which will help to
generate more sales in the international market.

Methods of Payment in International Trade

To succeed in todays global marketplace and win sales against

foreign competitors, exporters must offer their customers
attractive sales terms supported by the appropriate payment
methods. Because getting paid in full and on time is the ultimate
goal for each export sale, an appropriate payment method must
be chosen carefully to minimize the payment risk while also
accommodating the needs of the buyer. As shown in figure 1,
there are five primary methods of payment for international
transactions. During or before contract negotiations, you should

12
consider which method in the figure is mutually desirable for you
and your customer.

Payment Risk Diagram

Least Secure Less More Most Secure

Secure Secure
Exporter Consignmen Open Documentar Letters of Cash-in-
t Account y Collections Credit Advance
Importer Cash-in- Letters of Documentar Open Consignmen
Advance Credit y Collections Account t

Key Points

International trade presents a spectrum of risk, which causes

uncertainty over the timing of payments between the exporter
(seller) and importer (foreign buyer).

For exporters, any sale is a gift until payment is received.

Therefore, exporters want to receive payment as soon as

possible, preferably as soon as an order is placed or before the
goods are sent to the importer.

For importers, any payment is a donation until the goods are

received.

Therefore, importers want to receive the goods as soon as

possible but to delay payment as long as possible, preferably until
after the goods are resold to generate enough income to pay the
exporter.

Cash-in-Advance

13
With cash-in-advance payment terms, an exporter can avoid
credit risk because payment is received before the ownership of
the goods is transferred. For international sales, wire transfers
and credit cards are the most commonly used cash-in-advance
options available to exporters. With the advancement of the
Internet, escrow services are becoming another cash-in-advance
option for small export transactions. However, requiring payment
in advance is the least attractive option for the buyer, because it
creates unfavorable cash flow. Foreign buyers are also concerned
that the goods may not be sent if payment is made in advance.
Thus, exporters who insist on this payment method as their sole
manner of doing business may lose to competitors who offer more
attractive payment terms.

Letters of Credit

Letters of credit (LCs) are one of the most secure instruments

available to international traders. An LC is a commitment by a
bank on behalf of the buyer that payment will be made to the
exporter, provided that the terms and conditions stated in the LC
have been met, as verified through the presentation of all
required documents. The buyer establishes credit and pays his or
her bank to render this service. An LC is useful when reliable
credit information about a foreign buyer is difficult to obtain, but
the exporter is satisfied with the creditworthiness of the buyers
foreign bank. An LC also protects the buyer since no payment
obligation arises until the goods have been shipped as promised.

Documentary Collections

A documentary collection (D/C) is a transaction whereby the

exporter entrusts the collection of the payment for a sale to its
bank (remitting bank), which sends the documents that its buyer
needs to the importers bank (collecting bank), with instructions
to release the documents to the buyer for payment. Funds are

14
received from the importer and remitted to the exporter through
the banks involved in the collection in exchange for those
documents. D/Cs involve using a draft that requires the importer
to pay the face amount either at sight (document against
payment) or on a specified date (document against acceptance).
The collection letter gives instructions that specify the documents
required for the transfer of title to the goods. Although banks do
act as facilitators for their clients, D/Cs offer no verification
process and limited recourse in the event of non-payment. D/Cs
are generally less expensive than LCs.

Open Account

An open account transaction is a sale where the goods are

shipped and delivered before payment is due, which in
international sales is typically in 30, 60 or 90 days. Obviously, this
is one of the most advantageous options to the importer in terms
of cash flow and cost, but it is consequently one of the highest
risk options for an exporter. Because of intense competition in
export markets, foreign buyers often press exporters for open
account terms since the extension of credit by the seller to the
buyer is more common abroad. Therefore, exporters who are
reluctant to extend credit may lose a sale to their competitors.
Exporters can offer competitive open account terms while
substantially mitigating the risk of non-payment by using one or
more of the appropriate trade finance techniques covered later in
this Guide. When offering open account terms, the exporter can
seek extra protection using export credit insurance.

Consignment

Consignment in international trade is a variation of open account

in which payment is sent to the exporter only after the goods
have been sold by the foreign distributor to the end customer. An
international consignment transaction is based on a contractual
arrangement in which the foreign distributor receives, manages,
15
and sells the goods for the exporter who retains title to the goods
until they are sold. Clearly, exporting on consignment is very risky
as the exporter is not guaranteed any payment and its goods are
in a foreign country in the hands of an independent distributor or
agent. Consignment helps exporters become more competitive on
the basis of better availability and faster delivery of goods. Selling
on consignment can also help exporters reduce the direct costs of
storing and managing inventory. The key to success in exporting
on consignment is to partner with a reputable and trustworthy
foreign distributor or a third-party logistics provider. Appropriate
insurance should be in place to cover consigned goods in transit
or in possession of a foreign distributor as well as to mitigate the
risk of non-payment.

Export Performance

Indias Export:

Exports in India increased to 27727.60 USD Million in July of 2014

from 26479.72 USD Million in June of 2014. Exports in India
averaged 4042.16 USD Million from 1957 until 2014, reaching an
all time high of 30541.44 USD Million in March of 2013 and a
record low of 59.01 USD Million in June of 1958. Exports in India is
reported by the Ministry of Commerce and Industry, India.

16
Indias main exports are engineering goods (19 percent of total
exports), gems and jewelry (15 percent), chemicals (13 percent),
agricultural products (9 percent) and textiles (9 percent). India is
also one of Asias largest refined product exporters with
petroleum accounting for around 18 percent of total exports.
Indias main export partners are United Arab Emirates (12 percent
of total exports) and United States (11 percent). Others include:
China, Singapore, Hong Kong and Netherlands.

Indias export growth started moderating in the second half of

2011-12 which turned negative during Q1 of 2012-13 reflecting
the continued impact of global economic slowdown and the
contraction in world trade.

Exports during Q1 of 2012-13 stood at US$ 75.2 billion, a decline

of 1.7 per cent as compared with an increase of 36.4 per cent
during Q1 of 2011-12. Despite the rupee depreciation in the
second half of 2011-12, export performance continued to
deteriorate in Q1 of 2012-13 as major trading partner economies
did not show any signs of revival and risks surrounding the
economic outlook continued to be on the downside particularly for
the euro area.

Indian Export is divided into two Sectors Merchandise & Services

Export.

Indias Merchandise Trade:

Indias Merchandise exports forms 45% of total export from

India.As shown in the chart the share of merchandise export has
been falling in recent years and that of service sector is
increasing.

17
 Merchandise export Service Export
70.0%
60.0% 55.4% 54.3%
63.7% 51.6% 51.8%
50.0%
36.3% 48.4% 48.2%
40.0% 44.6% 45.7%
30.0%
20.0%
10.0%
0.0%
2009 2010 2011 2012 2013

The merchandise Export is reviewed in two parts Oil & Non-Oil

export. Oil export forms 20% of the total export whereas rest 80%
consists of Non-oil exports.

The above chart shows that the both oil & Non- oil exports are
growing but at a diminishing rate whereas it fell in year to US $

18
239.5 billion in 2013 from US $ 249 billion in 2012 falling by
approx. 4%.

Another way of Reviewing the Merchandise Export from India is

Exports of Principal Commodities.

The Commodities are divided into 4 categories:

Primary Products

o Agriculture and Allied Products

o Ores and Minerals

Manufactured Goods

o Leather and Manufactures

o Chemicals and Related Products

o Engineering Goods

o Textiles and Textile Products

Gems and Jewellery

Petroleum Products

Others

Share of Principle Commodities:

19
% Share of Principle Commodities in Total export
100% 3.6 4.9 7.5 5.4 3.3 3
15.1 15.7 18.3 20.3 20.1
80% 16.5

60%
67.4 64.6 62.9 61.3 60.9 61.5
40%

20%
13.9 14.8 13.1 15 15.5 15.4
0%
2009 2010 2011 2012 2013 2014
Primary Products Manufactured Goods
Petroleum Products Others

In Indias total export share of manufactured goods is highest and

forms approximately 60% of the total export. If we observe the
trend from the last 5 years the share of manufactured
commodities are decreasing and that of petroleum products are
increasing steadily, the share of petroleum products has grown
from 15% in 2009 to 20.1% of total export in 2014. The share of
primary products in export is also increased from 13.9% in 2009
to 15.4% in 2014.

Primary Products export:

Main components of Primary products are Agriculture and Allied

Products&Ores and Minerals, wherein Agriculture and Allied
Products forming large part of primary products export. The share
of Agriculture and Allied Products& Ores and Minerals can be seen
in the attached chart below.

20
 As Percentage of Total Export
Agriculture and Allied Products Ores and Minerals
Primary Product
20

15 14.7 15 15.5
13.6 15.4
13.9 12.2 13.6
9.9
10
9.8

5 4.8 4.1
2.8 1.9 1.8
0
2010 2011 2012 2013 2014(P)

The share of Agriculture and Allied Products has grown from 9.9%
of total export in 2010 to 13.6% in 2014 and that of Ores and
minerals have decreased from 4.8% in 2010 to 1.8% in 2014. As it
can be observed from the graph that Percentage share of primary
products remained stable at approximately 15%. But the growth
in terms of quantity of primary products is 24% from 2010 to
2011 and 38% from 2011 to 2012. But due tocontinued impact of
global economic slowdown and the contraction in world trade the
growth in 2013 and 2014 has been very less amounting to just 2%
and 4% resp.

21
 E xp o rt o f P rim a ry P ro d uc ts ( US $ M illio n)
60,000.00 45.0%
38.8% 40.0%
50,000.00 48,350.00
45,574.00 46,500.00
35.0%

40,000.00 30.0%
24.4% 32,845.00
25.0%
30,000.00 26,397.00
20.0%

20,000.00 13.1% 15.0%

14.8% 15.0% 15.5% 15.5%
10.0%
10,000.00 4.0%
2.0% 5.0%

0.00 0.0%
2010 2011 2012 2013 2014

Primary Products Growth Rate

% S hare fo T. Export(Primary prd.)

1. Agricultural & Allied Products:

Agricultural & Allied Products forms approximately 12% of Indian

export and has been growing over the period of time. The main
constituents of agri. & allied products are:

Rice

Cotton Raw incl. Waste

Marine Products

Spices

Oil Meal

Sugar & Molasses

Coffee

Cashew incl. CSNL

Tea

22
 Tobacco

Wheat

Share of Agricultural & Allied Products:

% Share of Agricultural & Allied Products ( 2012 )

Rice; 13%

Others ; 36%
Cotton Raw incl. Waste; 12%
Wheat; 1%
Tobacco; 2% Marine Products; 9%
Tea; 2% Spices; 7%
Cashew incl. CSNL; 2% Coffee; 3%
Sugar & Molasses; 5% Oil Meal; 7%

Export of rice & raw Cotton Combined forms 25% of Agricultural &
Allied Products export.

23
Export of Rice:

Export of Ric e ( US $ Million)

6,000.00 120.0%
97.9% 5,032.80
5,000.00 100.0%

4,000.00 80.0%

3,000.00 2,372.30 2,542.90 60.0%

1,811.20
2,000.00 40.0%

1,000.00 31.0% 10.5% 20.0%

13.0% 13.4% 13.4%
0.00 7.2% 0.0%
2009 2010 2011 2012

Rice Growth Rate

% Share(Agri. & Allied prd.)

India, the world's biggest rice and wheat producer after China,
exported 22 million tonnes of the grains in the last fiscal year to
March 31, 2013 after New Delhi lifted a four-year-old ban on
overseas shipments of the staples in late 2011.

Rice shipments from Indiawill probably expand to a record as

buyers from Iran to Saudi Arabia boost purchases of aromatic
basmati grain used in biryani and pilaf dishes.

Exports are set to increase 7.8 percent to 11 million metric tons in

the 12 months through March from a year earlier.

Shipments are increasing from India as Thailand, once the worlds

biggest supplier, is also set to boost exports. The Southeast Asian
country has built record stockpiles big enough to meet about a
third of global import demand under a buying program that
started in 2011.

24
India supplies 65 percent of the overseas basmati rice market,
while Pakistan accounts for the rest, according to the state-run
Agricultural and Processed Food Products Export Development
Authority. Saudi Arabia and Iran are the two major buyers of
Indian basmati, while Africa is a major destination for non-basmati
varieties.

Export of Cotton Raw incl. Waste:

Export of Cot ton Raw inc l. Was t e ( US $ Million)

5,000.00 324.2% 4,512.10 350.0%
4,500.00
300.0%
4,000.00
3,500.00 250.0%
2,888.40
3,000.00 200.0%
2,500.00 2,010.20
2,000.00 150.0%
1,500.00 100.0%
1,000.00 56.2%
473.90 43.7%
50.0%
500.00 3.4% 11.3% 11.9% 12.1%
0.00 0.0%
2009 2010 2011 2012

Cotton Raw incl. Waste Growth Rate

% Share(Agri. & Allied prd.)

The high quality of Indian yarns is ensuring firm orders from

international markets.There is an increasing anxiety in the
industry due to recent developments in Chinese cotton policy
sinceChina is the major importer of cotton and cotton yarns from
India.At present, the price difference between Indian and Chinese
cotton is high, with the Indian yarn selling at much lower rates.
Prices of Indian cotton yarns after payment of duty and taxes in
China are still very much lower than the Chinese domestic yarn
prices. "Given the better quality produced by Indian mills there
will always be good exports of Indian yarns taking place, even if

25
the difference between Chinese and international cotton prices
narrows down substantially.

Export of Cotton Raw incl. Waste forms about 12% share of total
Agri. & Allied product export and has grown over the period of
time as seen in the graph above with growth rate of 56% from
2011 to 2012.

Export of Tea:

Export of Tea ( US $ Million)

1000 35.0%
900 31.0% 30.0%
800 863.7
700 25.0%
736.2
600 20.0%
620.4
18.7%
500 17.3%
400 473.5 15.0%
300 10.0%
200 3.5%
3.4% 3.0% 2.3% 5.0%
100
0 0.0%
2009 2010 2011 2012

Tea Growth Rate

% Share(Agri. & Allied prd.)

India is the largest producer and consumer of black tea in the

world. Tea is grown in 15 States in India. On average 20% of the
total production is exported and balance 80% is consumed within
the country.

Production:

26
During 2013-14 (Apr-Sep), the estimated production stands at
778.51 M.Kgs. as against 733.64 M.Kgs of corresponding period,
thereby an increase of 44.87 M.Kgs (6.12%).

Exports:

During 2012-13 the exports increased by 2 M.Kgs. Because of

higher unit price, the total value of exports during 2012-13 was
also higher than the previous 33

year by Rs. 701 crore. Total foreign exchange earned during 2012-
13 was US$ 736 Mn as against US$ 690 Mn of corresponding
period. The average unit price of exports during 2012-13 was also
higher by Rs. 31 compared to the corresponding period.

During 2012-13, improvement in the exports took place with

respect to countries such as Russia, Germany, UAE, Iran and
Egypt (ARE). Improved market share of exports is seen in UAE
(19.17%), Iran (69.50%), Egypt (47.03%) over the corresponding
period.

Scheduled Caste Sub-Plan: For the current financial year a sum of

Rs.10 Cr has been earmarked for extending assistance to SC small
tea growers. The expenditure incurred upto to December 2013
add upto Rs 1.26 crore.

Intellectual Property Rights (IPR) activities: Tea Board has

continued its objectives to protect and preserve its various tea
names and logos as Indias treasured geographical indications
and icons of Indias cultural and collective heritage. The Tea Board
continued to challenge, by way of
opposition/invalidation/cancellation actions, legal notices, court
actions and domain name cancellations instances of attempted
registrations and misuse of these tea names and logos both at the
domestic and international level. A noteworthy highlight of the
year has been to make the largest importer of India tea M/s
Orimi Trade in the world as the valid licensee of our Assam marks
in Russia.

27
Export of Coffee:

Export of Coff ee ( US $ Million)

1000 60.0%
900 54.2% 946
800 50.0%
700 43.2%
40.0%
600 660.6
500 30.0%
400
428.3 20.0%
300 376.1
200 13.9%
10.0%
100 2.7% 2.4% 2.7% 2.5%
0 0.0%
2009 2010 2011 2012

Coffee Growth Rate

% Share(Agri. & Allied prd.)

28
Production:

The post blossom crop estimates for 2013-14 has been placed at
3,47,000 MT consisting of 1,11,000 MT of Arabica and 2,36,000
MT of Robusta as compared to the 2012-13 final crop estimates of
3,18,200 MT comprising of 98,600 MT of Arabica and 2,19,600 MT
of Robusta.

Export of Coffee:

The total quantity of coffee exported from India during 2012-13

including re-exported coffee after value addition was 299030
Metric Tonnes. The top five export destinations for Indian Coffee
are Italy, Germany, Russian Federation, Belgium and Slovenia,
which accounted for about 53% of our total coffee exports. The
value realization out of coffee exports during 2012-13 was Rs.
4548.29 crores.

The provisional coffee exports for 2013-14 covering the period

April October 2013 are 179151 Metric Tone valued at Rs.2712.82
crores, as against the export target of 2,56,000 MTs for 2013-14.
As per the trend, we may reach the export target by the end of
the year.

Debt Relief Package 2010: The Government sanctioned the

Coffee Debt Relief Package 2010 for the debt ridden small coffee
growers with a total implication of Rs. 241.00 Crores. As against
the targeted 74,929 small growers, 1,20,025 small growers were
benefited by the scheme with the Govt. share of relief of
Rs.241.00 Crores. In the 2nd phase, Government sanctioned and
released additional funds of Rs.58.00 Crores. Out of which
Rs.52.45 crores of Govt. share of liability has been reimbursed
towards settlement of pending/supplementary claims benefiting
15,258 small coffees growers till the end of March 2013, Thus the
total amount reimbursed so far is Rs.293.45 crores benefiting
1,35,283 small growers.

Export of Spices:

29
 Export of Spic es ( US $ Million)
3,000.00 2,749.30 60.0%

2,500.00 55.7% 50.0%

2,000.00 1,765.40 40.0%

1,500.00 36.0%
1,297.80 30.0%
1,073.50
1,000.00 20.0%
20.9%
500.00 7.7% 7.3% 7.3% 7.3% 10.0%

0.00 0.0%
2009 2010 2011 2012

Spices Growth Rate

% Share(Agri. & Allied prd.)

The Board is headed by a Chairman with its head office at Kochi.

Spices Board is responsible for the development of cardamom
industry and export promotion. The primary function of the Board
includes production development of small and large cardamom,
promotion, development and regulation of export of spices.

Export:

Indian spices exports have been able to record strident gains in

both volume and value in rupee terms during 2012-13. It is first
time in the history of spices export from the country, the growth
in volume registered all time high of 22%. The total export of
spices during the period has also crossed Rs.10,000.00crore
marks for the first time. The export had gone up from 470,520 MT
valued at Rs.5300.26 crore (US$ 1168.40 million) in 2008-09 to
699,170 MT valued Rs.11171.16 crore (US$ 2040.18 million) in
2012-13. During 2013-14 (April September), the estimated
export of spices is 378,755 MT valued at Rs.6117.83 crore (US$

30
1031.11 million) against 314835 MT valued Rs.4285.74 crore (US$
787.49 million).

Production:

The estimated production of cardamom (small) and cardamom

(large) in India during 2012-13 is 14000 MT and 4145 MT
respectively.

Plan Schemes of the Board: The XII Plan scheme / programmes

are visualised with the objective of enhancing spices export from
the country by making in-roads into building processing capacities
and capabilities, expansion of markets, increasing production and
productivity of cardamom (small & large), modernising the spice
cultivation and post-harvest operations thereby attracting youths
to the spices cultivation, promoting organic cultivation,
addressing food safety concerns of importing countries, market
and productivity driven research, skill development, transfer of
technology etc.

Export of Marine Products:

31
 Export of Marine Produc t s ( US $ Million)
4,000.00 80.0%
68.4% 3,461.40
3,500.00 70.0%
3,000.00 2,615.60 60.0%
2,500.00 50.0%
2,086.70
2,000.00 32.3% 40.0%
1,500.00 1,238.80 25.3% 30.0%
1,000.00 20.0%
8.9% 11.8% 10.8% 9.2%
500.00 10.0%
0.00 0.0%
2009 2010 2011 2012

Marine Products Growth Rate

% Share(Agri. & Allied prd.)

Exports of Marine Products during the first eight months of 2013-

14 (April November) was of the value of US $ 3332.46 million as
against US $ 2372.36 million thereby recording of growth of
40.47%. in rupee terms, export were of the order of Rs. 20220.25
crore (April-November, 2013) as against Rs. 12910.98 crore (April-
November, 2012), recording a growth of 56.61%. However, there
has been a decline in quantity of Marine Products by 0.24% during
the above period.

Ores & Minerals:

Ores & Minerals forms approximately 3% of total export of India

and its share has been reducing over the period of last 5 years. Its
share in total export has significantly gone down from 4.8% in
2010 to 1.8% in 2014. Iron ores and Processed mineral forms the
major share of the ores & Minerals export.

32
% Share of O res & Minerals ( 2012 )

Others; 23%

Iron Ore; 54%

Processed Minerals; 22%

Export of Iron Ores:

Export of Iron O res ( US $ Million)

7,000.00 100.0%
87.9%
6,000.00 69.0% 80.0%
5,978.90
5,000.00 55.4% 54.4% 54.2% 60.0%
4,000.00 4,700.30 40.0%
4,421.20
3,000.00 20.0%
3,182.30
2,000.00 0.0%
-5.9%
1,000.00 -21.4% -20.0%
0.00 -40.0%
2009 2010 2011 2012

Iron ores Growth Rate

% Share(Agri. & Allied prd.)

Iron ore exports, which remained almost at thesame level as last

year, are likely to get some boostafter the mining ban on Goa was
lifted by the SupremeCourt in April 2014. Overall, supply-side

33
constraintsmay, however, stay with the ban continuing in
Odishaand annual production cap of 30 million tonnes inKarnataka
and 20 million tonnes in Goa.

Countrys iron ore exports witnessed a 27.56 per cent slump at

12.57 million tonnes (MT) during the April-February period of the
current fiscal due to continuation of the export duty.India, once
the third largest exporter of iron ore, had exported 17.35 MT of
the mineral in the corresponding period of the last fiscal. Exports
have declined continuously in last few years due to imposition of
export duty.

Iron ore output in the year ended March 31 was 48 million tonnes
more than local consumption, the minister told lawmakers.
Exports, however, were just 14.41 million tonnes as a duty of 30
percent and high freight rates made Indian ore uncompetitive.

Export of Manufactured goods:

In Indias total export share of manufactured goods is highest and

forms approximately 60% of the total export. If we observe the
trend from the last 5 years the share of manufactured
commodities are decreasing and that of petroleum products are
increasing steadily.

34
Composition of Manufactured goods:

% Share of Manufac t ured Goods ( 2012 )

Leather & Manufactures; 3% others; 1% Handicrafts; 0%

Textiles & Textile Products; 15%
Engineering Goods; 36%

Chemicals & Related Products; 20%

Gems & Jewellery; 25%

As Percentage of Total Export

Leather and Manufactures Chemicals and Related Products

Engineering Goods Textiles and Textile Products
Gems and Jewellery

25 23.1
22 21.8
22.2
20
21.5
16.3 16.1 15.4
15 14.4 13.1
12.8 13 13.2
11.5 12.2
9.2 10.1
10
11.1
9.6 9.1
5
1.6 1.6
1.8
1.9
0 1.6
2010 2011 2012 2013 2014(P)

Engineering Goods:

Engineering Goods forms major portion of manufactured goods

exported out of India amounting to 36% of total manufactured
goods exported.

35
Indian engineering exports rose from US$ 33.7 billion in 2007-08
to US$ 56.7 billion in 2012-13, posting a growth of around 11 per
cent. Also, engineering exports showed an annual increase of
14.72 per cent in November 2013 over the corresponding month
of 2012.

The US and Europe together account for about 60 per cent of

Indias total engineering exports. Indian engineering exports to
Saudi Arabia, Thailand, the Netherlands, Malaysia, Czech
Republic, Bangladesh and Egypt have also seen significant rise
during the period 2011-12 to 2013-14.

A key driver for increased engineering exports has been the

shifting of global manufacturing bases to countries such as India
that offer lower costs and good engineering aptitude

The nature of Indian engineering exports is changing with time

India is fast moving from exporting low-value goods to developing
countries to exporting high-value goods to developed countries

Indias rising engineering exports include heavy engineering

goods, transport equipment, capital goods, other
machinery/equipment and light engineering products like
castings, forgings and fasteners.
The major categories of engineering and manufactured goods
being exported from India to North America and Europe included
the following:

Metal (Ferrous and Non-Ferrous) Manufactured Parts: This

category comprises parts such as pipes, fittings, flanges, sheets,
wire, rods, lugs, coils, connectors, precision turned parts, nuts,
bolts, screws, fasteners, deep drawn sheet metal components,
pressed and stamped parts for electrical and automotive
applications as well as a whole host of other similar parts. It also
includes castings and forgings which are also listed as a separate
category below.

36
Castings & Forgings: India manufactures and exports all kinds
of castings and forgings for automotive, defense, material
handling, earthmoving and electrical applications. There are over
300 companies that manufacture forged parts (excluding the
large number of units classified as tiny) and forging capabilities
exist for all kinds of carbon, alloy and stainless steels using open-
die and closed-die processes. Of these, there are about 10 large
units and about 100 mid-size units.

India is the fourth largest manufacturer of castings worldwide and

its output has more than doubled in the last 10 years. There are
4,500 foundries and are clustered in some parts of the country.
Capabilities exist for expendable mold castings including precision
castings, and for non-expendable mold die casting. Castings
produced span ferrous, non ferrous, aluminum alloy, graded cast
iron, ductile iron, steel etc for application in automobiles, pumps,
compressors & valves, diesel engines, and, sanitary pipes &
fittings etc. Grey iron castings constitute about 70% of total
castings produced.

Metal Valves: India today produces a wide variety of world-class

products in the metal valve segment and is emerging as a large
exporter. The valve industry is growing at 8 percent and exports
are growing at over 10 per cent due to Indian manufacturers.
Types of valves produce include high temperature valves,
butterfly valves, globe valves, gate valves, high pressure valves,
ball valves, needle valves, rotary valves, exhaust valves, valve
seat inserts, valve guides, diaphragm valves, diaphragm valves
and screwed bonnet needle valve. These valves are available in a
wide variety of metals including bronze, gun metal, non-ferrous
nickel alloys, cast titanium, copper, aluminum and stainless steel.

Pumps & Compressors: There are over 800 large, medium and
small units producing pumps in India for sectors from agriculture,
HVAC to nuclear power generation.

37
The Indian pump industry produces positive displacement pumps
(such as rotary, piston, diaphragm, screw and gear), buoyancy
pumps, impulse pumps (such as hydraulic ramp), velocity pumps
(such as centrifugal, radial flow and axial flow) and gravity pumps
among others. Pump and compressor applications range from
hydraulic, sea-water, slurries, chromatography, solvents, alkalis,
acids, sewage etc to industrial, domestic and agricultural
applications.

General Purpose Machinery: India has a well developed

machine tool industry that manufactures almost the entire range
of metal-cutting and metal-forming machine tools. There are over
150 machine tool manufacturers in the organized sector and
about 300 units in the small/ancillary sector. The top ten machine
tool manufacturers produce approximately three-fourths of the
total production of machine tools in India.

Ex p ort of Eng ineerin g G ood s ( U S $ Million )

80000 60.0%
70000 51.9% 50.0%
60000 67093.1
38.5% 36.8%
58137.4 35.9% 40.0%
50000 33.2%
40000 30.0%
30000 37370.5 38271.3
20.0%
20000 15.4%
10.0%
10000
0 2.4% 0.0%
2009 2010 2011 2012
Engineering Goods Growth Rate
% Share(Manufacturing Goods)

Export of Gems &Jewellery:

38
 Export of Gems & Jewellery ( US $ Million)
50000 45.0%
39.6%
45000 40.0%
40000 35.0%
35000 30.0%
29.1% 25.2% 25.6% 25.1%
30000 23.1% 25.0%
25000
20.0%
20000
15.9% 15.0%
15000
10000 10.0%
5000 5.0%
22463.4 28996.3 40476.1 46900.8
0 0.0%
2009 2010 2011 2012

Gems & Jewellery Growth Rate

% Share(Manufacturing Goods)

Export of gems &jewellery forms a large part of total exports from

India amounting to approximately 13-14% share. The share of
Gems &Jewellery has declined in past from 16.3% in 2010 to
13.1% in 2014.

The gems and jewellery sector has been one of the fastest-
growing sectors in India in the past few years. The sector has
gained global popularity because of its talented craftsmen, its
superior practices in cutting and polishing fine diamonds and
precious stones, and its cost-efficiencies. The sector has been
vital to the Indian economy as well; during 2008-09, the sector
accounted for around 13% of the countrys total exports.

The gems and jewellery sector in India is engaged in sourcing,

manufacturing, and processing, which involves cutting, polishing
and selling precious gemstones and metals such as diamonds,
other precious stones, gold, silver and platinum.

Gold jewellery is the most preferred form of jewellery in demand

in India as it is considered auspicious to purchase gold on major
occasions like festivals, marriage, birth etc. Also, gold occupies
the second position among all investment instruments and is
considered as the safest investment option. According to the data
released by the World Gold Council (WGC), India is the largest

39
consumer of gold. In 2008, India consumed approximately 660
tonnes of gold and accounted for 22.71% of the total gold
consumed all over the world, most of which was used in jewellery.
Even though the gold demand remained weak, India continued to
maintain its second position in the third quarter-ended 2009 as
well and accounted for 20.87% of the total gold consumed all over
the world.

India is also one of the largest diamond processor in the world

and its artisans have specialised skills in processing small
diamonds (below one carat); in fact, the Indian craftsmen have
achieved excellence in cutting and polishing small diamonds.
However, the real uniqueness of the Indian craftsmen lies in the
fact that they do most of the cutting and polishing manually
which sets India apart from its other peers. India (especially, Surat
and Mumbai) ranks among the big four diamond cutting centres
of the world the other three being, Belgium (Antwerp), the US
(New York) and Israel (Ramat Gan). Currently, diamonds
processed in India account for 85% in volume, 92% in pieces and
60% in value of the total world diamond market.

The gems and jewellery sector in India is highly export-oriented,

labour-intensive and a major contributor to the foreign exchange
earnings; therefore, the Indian government has declared the
sector as a thrust area for export promotion.

Decline inexports of gems &jewellery by 5.4 per cent in 2013-

14could partly be on account of softening of global pricesof
precious metals (e.g. gold) which are used as basicinput in gems
and jewellery sector. It may be notedthat gold prices declined by
about 20 per cent during2013-14.

The polished diamond export registered an increase of 12.64 per

cent at $19 billion and that the import of rough diamond also
registered an increase of 11.98 per cent at $16 billion in 2013-14
compared to same period in previous year.
The significant decrease in the gems and jewellery export is

40
attributed to the drastic decline in thegold jewellery and gold
medallion export at 39.50 per cent during the year.

India Export of Services

The Indian exports related to services have been performing

phenomenally since LPG. India was always an interesting region
for the global services industry to explore. The reason for this
being the education system in India is in English. This is a major
reason for India attracting world attention.

In 1991 the Department of Electronics broke this impasse,

creating a corporation called Software Technology Parks of
India (STPI) that, being owned by the government, could provide
VSAT communications without breaching its monopoly. STPI set up
software technology parks in different cities, each of which
provided satellite links to be used by firms; the local link was a
wireless radio link. In 1993 the government began to allow
individual companies their own dedicated links, which allowed
work done in India to be transmitted abroad directly. Indian firms
soon convinced their American customers that a satellite link was
as reliable as a team of programmers working in the clients office.

The main composition of the Indian Service sector is as follows :-

Information Technology

Travel

Transportation

Miscellaneous

Communication

Financial

Software

41
Communication Services:
These services include such activities as international
telecommunications, and postal and courier services; computer
data; news-related service transactions between residents and
nonresidents; construction services; royalties and license fees;
miscellaneous business, professional, and technical services; and
personal, cultural, and recreational services.

Financial Services:
These services includefinancial services cover freight insurance
on goods exported and other direct insurance such as life
insurance; financial intermediation services such as commissions,
foreign exchange transactions, and brokerage services; and
auxiliary services such as financial market operational and
regulatory services.

Software Services:
These services include the IT and BPO/KPO services.

Transport Services:
Transport services cover all transport services (sea, air, land,
internal waterway, space, and pipeline) performed by residents of
one economy for those of another and involving the carriage of
passengers, movement of goods (freight), rental of carriers with
crew, and related support and auxiliary services. Excluded are
freight insurance, which is included in insurance services; goods
procured in ports by nonresident carriers and repairs of transport
equipment, which are included in goods; repairs of railway
facilities, harbors, and airfield facilities, which are included in
construction services; and rental of carriers without crew, which is
included in other services.

Travel Services:
Travel services (% of commercial service exports) covers goods
and services acquired from an economy by travelers in that
economy for their own use during visits of less than one year for
business or personal purposes. Travel services include the goods
and services consumed by travelers, such as lodging and meals
and transport (within the economy visited).

42
In 1999, for the very first time Indias share in the total world
exports touched 1 percent. This period falls under the Ninth Five-
Year Plan (1997-2002) which commenced on April 1, 1997. In
February 1997, sectoral level negotiations were concluded in the
area of financial services. In mid December 1997, member
countries achieved improved commitments with a larger scope of
participation. This reflected in the growth of Indias share of
export of services in the world from the year 1999 to 2006. In
2005 it crossed the 2 percent mark, and by 2006 it reached 2.71
percent . In fact, in this year, Indias share of invisible exports in
the worlds export of service was the highest. But in 2007, the
share dropped marginally by 0.06 percent points to 2.65 percent.

The Indian IT sector has grown in three waves: a first wave

consisting of IT services, a second dominated by BPO, and a third
extending to knowledge services outsourcing (or KSO, which
consists of business research, data analysis, market research,
data management, and legal research). Expansion of KSO has
been rapid since the turn of the century: globally, a sector that
generated revenues of $1.2 billion in FY 2006 now generates
some $2.9 billion (circa 2010); India accounts for nearly 70 per
cent of this global market, reflecting an impressive rate of growth
of 24 percent per annum over the past 5 years. Indian KSO
employs some 70,000 workers, some of them highly skilled, and is
expected to grow at a similarly robust pace and to employ nearly
twice as many people by 2015.

Key Statistics
The services sector received foreign direct investment (FDI)
equity inflows worth Rs 179,150.49 crore (US$ 28.78 billion)
in the period April 2000August 2013, according to
Department of Industrial Policy and Promotion (DIPP).
About 80 per cent of India's total exports are dominated by
high-skilled services, such as software business services,
financial services and communication services.

43
 The expenditure of Indian banking and securities companies
on IT products and services is expected to be around US$
422 billion in 2013, a 13 per cent increase from 2012.
The Indian food service industry is expected to grow to Rs
408,040 (US$ 65.56 billion) crore by 2018 at a compound
annual growth rate (CAGR) of 11 per cent, as per a survey
commissioned by Technopak for National Restaurant
Association of India (NRAI). The QSR market will double to
around Rs 70 billion (US$ 1.12 billion) in FY 201516 from Rs
34 billion (US$ 546.09 million) in FY 201213, on the back of
new store additions.
Industry body CII projects the growth rate for Indias
insurance industry in FY 201314 to be around 5 per cent,
with around 60 per cent of non-life insurance companies
recording an average growth of more than 10 per cent.
The following graph gives the contribution of export of services
from India in US Billion Dollars for the time period of 2007 till
present date. We can observe that the value increased from 90.34
US Billion $ to 105.96 US Billion $ from 2007-08 to 2008-09.
However the sudden fall in year 2009-10 is due to the global
recession which the entire world experience. The imports as well
exports across all the categories of products were adversely
affected in this period. However 2010 onwards the contribution of
export of services started increasing gradually till the year 2012-
13.

Value corresponding to the year 2013-14 is a partial data only

upto the month of June. This is the reason why it shows a lower
value.

44
 India's Services Export( US Billion $)
132.88142.32145.67
105.96 96.04
90.34
36.52

11
08

09

10

12

13

14
-

-
09

10
07

08

11

12

13
20

20

20

20

20

20

20
Composition of Export of Services

The following pie charts give the comparison of components of

Services which are exported from India for the time periods 2008-
09. 2010-11 and 2012-13.

It can be seen that the contribution from various components like

transport, travel, finance, business etc is almost the same
throughout the years even though the total contribution of export
from services has been increasing continuously across these
periods.

45
2008-09

46
2010-11

2012-13

47
Indias Export To Foreign Countries
Association of South East Asian Nations (ASEAN)

India has been a major exporter to ASEAN countries since many

previous years. India has been majorly exporting to Malaysia,
Myanmar, and Thailand etc. among these ASEAN countries. The
trend of Indias exports can be observed in the below graph:

48
 ASEAN
40,000.00 36,744.35 15.0%
12.0%
35,000.00 33,009.21 33,279.22
11.0% 10.0%
10.3% 10.30%
10.2% 10.6%
30,000.00
5.0%
25,000.00
19,140.63 18,113.71
20,000.00 1.00% 0.0%
15,000.00
-5.0%
10,000.00 -5.37%
-11.00% -10.0%
5,000.00
0.00 -15.0%
2009- 10 2010-11 2011-12 2012-13 2013-14

Value in US Dollar % Share YoY Growth

The growth to these nations has been fluctuating but is more

towards to growing trend as can be observed from here. The year
on year growth also is quite fluctuating. Indias exports to the
10-nation ASEAN bloc is expected to reach $280 billion in the next
10 years, says a Standard Chartered research report.

According to the global financial services major, the India-ASEAN

trade corridor, currently worth around $80 billion, has been
growing fast at a compound annual growth rate of 23 per cent
over the past decade.

The major exporting products in these ASEAN nations are given in

the table below:

49
2. Latin America

Some of the Latin American countries where India majorly exports

include Brazil, Argentina, and Columbia, Venezuela etc.

50
The trends of the exports to the nations as well as the major
products which are being exported to these Latin American
countries is summarized below:

Latin America
8,000,000.00 5
7,350,846.95
7,000,000.00 4 4.5 6,577,008.07
4
5,865,152.02
6,000,000.00
3.31 3.46 3.46 3
5,000,000.00

4,000,000.00 2
2,926,862.53
3,000,000.00 2,786,802.22
1
2,000,000.00 20.00%
50.00%
0
1,000,000.00 5.00% -12.00%
0.00 -1
2009- 10 2010-11 2011-12 2012-13 2013-14

Value in US Dollar % Share YoY Growth

Indias exports to the Latin American countries have grown at a

rapid pace during the last decade. The percentage share of Indias
exports to this region has also shown an increasing trend. Indias
exports to the region have increased by nearly 6 times in 10 years
(1996-97 to 2005-06). The %age share of Indias exports to Latin
America in its global exports has increased from 1.43% in 1996-
97 to 2.88 % in 2005-06.Despite the high export growth rates and
increasing share of the region in Indias total exports, Indias
exports constitute a minuscule part of the total imports of the
region. While the global imports of the Latin American region are
US$ 526 billion in 2005, Indias exports had a share of just about
0.5% in the imports of the region.

51
 3.

North America
Some of the North American countries where India majorly
exports are summarized below:

52
 North America
30,000,000.00 16
26,262,825.81
14
25,000,000.00 12.48 13.82
13.26
21,668,546.45 12
12.22
11.56
20,000,000.00 18,295,761.02 10
8
15,000,000.00
6
10,270,520.76 9,773,709.28
10,000,000.00 4

2
5,000,000.00 16.00%
47.00% 0
-5.00% 17.00%
0.00 -2
2009- 10 2010-11 2011-12 2012-13 2013-14

Value in US Dollar % Share YoY Growth

4. Africa
Africa has been India leading trading partner. Indias trade with
Africa has doubled in the past four years, from $24.98 billion in
200607 to $52.81 billion in 2010117. This steady upward path
53
on the trade front is being supported by stronger investment ties,
with Indian companies in Africa totaling $1.52 billion in 200910.
With the leadership on both sides committed to providing a
business friendly environment, bilateral ties are expected to
continuously grow in scope andsignificance.The major countries
within Africa where India exports, export products as well as the
major exporting products has been summarized below:

5. European Union
EU has been India leading trading partner. The major countries
within EU where India exports, export products as well as the
major exporting products has been summarized below:

54
55
56
New foreign trade policy 2009-2014

The Government of India came up with the new foreign trade

policy to enhance exports in the country

Highlights of the new foreign trade policy are as under:-

Higher Support for Market and Product Diversification

Incentive schemes under Chapter 3 have been expanded by

way of addition of new products and markets.

26 new markets have been added under Focus Market

Scheme. These include 16 new markets in Latin America and
10 in Asia-Oceania.

The incentive available under Focus Market Scheme (FMS)

has been raised from 2.5% to 3%.

The incentive available under Focus Product Scheme (FPS)

has been raised from 1.25% to 2%.

A common simplified application form has been introduced

for taking benefits under FPS, FMS, MLFPS and VKGUY.

Higher allocation for Market Development Assistance (MDA)

and Market Access Initiative (MAI) schemes is being
provided.

57
Technological Up gradation

To aid technological upgradation of our export sector, EPCG

Scheme at Zero Duty has been introduced. This Scheme will be
available for engineering & electronic products, basic chemicals &
pharmaceuticals, apparels & textiles, plastics, handicrafts,
chemicals & allied products and leather & leather products
(subject to exclusions of current beneficiaries under Technological
Upgradation Fund Schemes (TUFS), administered by Ministry of
Textiles and beneficiaries of Status Holder Incentive Scheme in
that particular year). The scheme shall be in operation till
31.3.2011.

EPCG Scheme Relaxations

To increase the life of existing plant and machinery, export

obligation on import of spares, moulds etc. under EPCG
Scheme has been reduced to 50% of the normal specific
export obligation.

Taking into account the decline in exports, the facility of Re-

fixation of Annual Average Export Obligation for a particular
financial year in which there is decline in exports from the
country, has been extended for the 5 year Policy period
2009-14.

Support for Green products and products from North East

Focus Product Scheme benefit extended for export of green

products; and for exports of some products originating from
the North East.

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Stability/ continuity of the Foreign Trade Policy

To impart stability to the Policy regime, Duty Entitlement

Passbook (DEPB) Scheme is extended beyond 31-12-2009 till
31.12.2010.

Interest subvention of 2% for pre-shipment credit for 7

specified sectors has been extended till 31.3.2010 in the
Budget 2009-10.

Income Tax exemption to 100% EOUs and to STPI units under

Section 10B and 10A of Income Tax Act, has been extended
for the financial year 2010-11 in the Budget 2009-10.

The adjustment assistance scheme initiated in December,

2008 to provide enhanced ECGC cover at 95%, to the
adversely affected sectors, is continued till March, 2010.

Marine sector

Fisheries have been included in the sectors which are

exempted from maintenance of average EO under EPCG
Scheme, subject to the condition that Fishing Trawlers, boats,
ships and other similar items shall not be allowed to be
imported under this provision. This would provide a fillip to
the marine sector which has been affected by the present
downturn in exports.

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 Additional flexibility under Target Plus Scheme (TPS) /Duty
Free Certificate of Entitlement (DFCE) Scheme for Status
Holders has been given to Marine sector.

Gems & Jewellery Sector

To neutralize duty incidence on gold Jewellery exports, it has

now been decided to allow Duty Drawback on such exports.

Agriculture Sector

To reduce transaction and handling costs, a single window

system to facilitate export of perishable agricultural produce
has been introduced. The system will involve creation of
multi-functional nodal agencies to be accredited by APEDA.

Leather Sector

Leather sector shall be allowed re-export of unsold imported

raw hides and skins and semi finished leather from public
bonded ware houses, subject to payment of 50% of the
applicable export duty.

Enhancement of FPS rate to 2%, would also significantly

benefit the leather sector.

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Tea

Minimum value addition under advance authorisation

scheme for export of tea has been reduced from the existing
100% to 50%.

DTA sale limit of instant tea by EOU units has been increased
from the existing 30% to 50%.

Export of tea has been covered under VKGUY Scheme

benefits.

Pharmaceutical Sector

Export Obligation Period for advance authorizations issued

with 6-APA as input has been increased from the existing 6
months to 36 months, as is available for other products.

Pharma sector extensively covered under MLFPS for

countries in Africa and Latin America; some countries in
Oceania and Far East.

Handloom Sector

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 To simplify claims under FPS, requirement of HandloomMark
for availing benefits under FPS has been removed.

EOUs

EOUs have been allowed to sell products manufactured by

them in DTA upto a limit of 90% instead of existing 75%,
without changing the criteria of similar goods, within the
overall entitlement of 50% for DTA sale.

To provide clarity to the customs field formations, DOR shall

issue a clarification to enable procurement of spares beyond
5% by granite sector EOUs.

EOUs will now be allowed to procure finished goods for

consolidation along with their manufactured goods, subject
to certain safeguards.

During this period of downturn, Board of Approvals (BOA) to

consider, extension of block period by one year for
calculation of Net Foreign Exchange earning of EOUs.

EOUs will now be allowed CENVAT Credit facility for the

component of SAD and Education Cess on DTA sale.

Flexibility provided to exporters

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 Payment of customs duty for Export Obligation (EO) shortfall
under Advance Authorisation / DFIA / EPCG Authorisation has
been allowed by way of debit of Duty Credit scrips. Earlier
the payment was allowed in cash only.

Import of restricted items, as replenishment, shall now be

allowed against transferred DFIAs, in line with the erstwhile
DFRC scheme.

Time limit of 60 days for re-import of exported gems and

jewellery items, for participation in exhibitions has been
extended to 90 days in case of USA.

Transit loss claims received from private approved insurance

companies in India will now be allowed for the purpose of EO
fulfillment under Export Promotion schemes. At present, the
facility has been limited to public sector general insurance
companies only.

Apart from the above mentioned steps, steps like

Simplification of Procedures, Reduction of Transaction Costs
& Directorate of Trade Remedy Measures were carried out by
the government to increase exports

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