Indian Foreign Trade

Policy

PRESENTED BY,

SWAPNIL GUPTA (404)

SATYAJIT RAJAK (399)
SANDIPAN SAMADDAR (398)

What is Foreign Trade Policy

Foreign Trade Policies are Government actions,

especially tariffs, import quotas, and export
subsidies, designed to increase net exports by
promoting exports or restricting imports

Advent of Foreign Trade Policy in India

In the year 1962, the Government of India appointed a special

Exim Policy Committee to review the previous export import policies

Mr. V. P. Singh, the then Commerce Minister and announced the Exim

Policy on the 12th of April, 1985

Initially the EXIM Policy was introduced for the period of 3 years
After liberalization in 1991, tenure of policy was changed to 5 years
In 2004, EXIM policy was replaced by Foreign Trade Act Policy of

2004

Objectives of EXIM Policy

To accelerate the economy from low level of economic activities to high

level of economic activities

To stimulate sustained economic growth by providing access to

essential raw materials

To enhance the techno local strength and efficiency of Indian

agriculture, industry and services

To generate new employment
To provide quality consumer products at reasonable prices.

Governing Body of EXIM Policy

Foreign Trade (Development and Regulation Act), 1992
Union Minister of Commerce and Industry
Ministry of Finance (Directorate General of Foreign Trade)

EXIM Policy 1992-1997

Introduced on April I, 1992
To liberalize imports and boost export
Duration 5 years
Amendments could be made by Central Government

EXIM Policy 1997-2002

Simplified the procedures between exporters and the DGFT
Liberalization
Imports Liberalization
Export Promotion Capital Goods (EPCG) Scheme
Advance License Scheme
Duty Entitlement Pass Book (DEPB) Scheme

EXIM Policy 2002 2007

Export and import of merchandise and services
To encourage economic growth by providing supply of essential raw

materials, intermediates & services required for augmenting production

To improve the technological strength and efficiency of Indian

agriculture, industry and services

To provide consumers with good quality products and services at

internationally competitive prices

Indian Foreign Trade Policy (2004-2009)

The first Foreign Trade Policy was formed in 2004 for a period of 5

years
Two major objectives :

1. increasing the exports, as a promotion of GDP

2. greater stress was laid on labor intensive exports like :
- Handloom
- Handicrafts
- Agriculture
- Marine goods
- Spices

Duty Exemption Schemes of EXIM Policy

2004-2009
Duty Drawback
Excise Duty Refund
Octroi Exemption

Duty Remission Schemes of EXIM Policy

2004-2009
Duty Entitlement Pass Book (DEPB)
Duty Free Replenishment Certificate (DFRC) schemes

Special Measures of EXIM Policy

2004-2009
Duty Free Import Authorization (DFIA)
Export Promotion Capital Goods Scheme (EPCG)
Export Oriented Units (EOUs), Electronics Hardware Technology Parks

(EHTPs), Software Technology Parks(STPs) And Bio-Technology Parks

(BTPs)

Special Economic Zone (SEZ)

Free Trade & Warehousing Zones

Special Economic Zone (SEZ)

Geographically distributed area or zones where the economic laws are

more liberal
Duty free enclaves for the purpose of trade, operations, duty and tariff
Self-contained and integrated having their own infrastructure and

support services

Indian Foreign Trade Policy (2009-2014)

The second 5 year Foreign Trade Policy was formed from 2009-2014
Two major objectives :

1. Double the percentage share of global merchandize trade within 5

years
2. Use trade expansion as an effective instrument of economic growth
and employment generation

Special Focus Initiatives of Foreign Trade

Policy (2009-2014)
Market Diversification
Technology Upgradation
Agriculture & Village Industry
Handicrafts
Gems & Jewelry
Marine Sector
Electronics & IT Hardware Manufacturing Industries
Sports Goods

1. MARKET DIVERSIFICATION

26 new countries included in Focus Market Scheme (FMS)

Incentives under FMS increased from 2.5% to 3%

Market Linked Focus Product Scheme

2. TECHNOLOGICAL UPGRADATION :

EPCG Scheme at zero duty

Towns of Export Excellence

3. AGRICULTURE & VILLAGE INDUSTRY :

Vishesh Krishi and Gram Udyog Yojana
Import of restricted items
Import of pesticides Permitted
Single Window System introduced

4. HANDICRAFTS :

Duty free import entitlement of tools, trimmings and embellishments

was 5% of FOB
All handicraft exports were to be treated as special Focus products

and entitled to higher incentives

5. GEMS & JEWELRY :

Import of gold of 8 k and above was allowed under replenishment

scheme
Duty free import entitlement of commercial samples was allowed

upto Rs. 300,000

Personal carriage of Gems & Jewelry products was increased to US$

5 million
Duty Drawback on export of gold jewelry
Diamond Bourse

6. MARINE SECTOR :
Imports for technological upgradation under EPCG in fisheries

sector
Duty free import of specified specialized inputs/chemicals and

flavoring oils was allowed to the extent of 1% of FOB

Marine products are considered for VKGUY scheme

7. ELECTRONICS & IT HARDWARE

MANUFACTURING INDUSTRIES :
Exporters /Associations were entitled to utilize MAI & MDA Schemes
for promoting Electronics and IT Hardware Manufacturing industry
exports

8. SPORTS GOODS & TOYS :

Duty free import of specified specialised inputs was allowed to the

extent of 3 % of FOB
Sports goods and toys were to be treated as a Priority sector under
MDA / MAI Scheme

Promotional Measures of Foreign Trade Policy

(2009-2013)
Assistance to States for Infrastructure Development of Exports

(ASIDE)
Market Access Initiative (MAI)
Market Development Assistance (MDI)
Towns of Export Excellence (TEE)
Brand Promotion & Quality
Export & Trading Houses
Focus Market Scheme (FMS)
Focus Product Scheme (FPS)

1. ASIDE :

Creation of new Export Promotion Industrial Parks/Zones

Setting up of electronics and other related infrastructure in export

conclave

Equity participation in infrastructure projects

Development of complementary infrastructure

Stabilizing power supply

2. MARKET ACCESS INITIATIVE (MAI) :

Market studies/surveys
Setting up of showroom / warehouse
Participation in international trade fairs
Displays in International departmental stores
Publicity campaigns
Brand promotion
Testing charges for engineering products abroad
Assistance for contesting Anti Dumping litigations

3. MARKET DEVELOPMENT ASSISTANCE (MDA) :

Trade Fairs and Buyer Seller meets abroad or in India, and

Export promotions seminars
Financial assistance with travel grant is available to exporters

4. TOWNS OF EXPORT EXCELLENCE (TEE) :

It is necessary to grant recognition to dynamic industrial clusters

Selected towns producing goods of Rs. 750 crore or more will be

notified as TEE
Recognized associations of units will be provided financial assistance

under MAI scheme

Common Service Providers in these areas shall be entitled for EPCG

scheme.

5. BRAND PROMOTION AND QUALITY :

India Brand Equity Foundation was set up by the Ministry of

Commerce on 11th July, 1996

IBEF aims to promote India as a business opportunity by creating
positive economic perceptions of India globally
Aims to create international awareness of the Made in India
label in markets overseas

6. EXPORT AND TRADING HOUSES

Merchant as well as Manufacturer Exporters, Service Providers,
Export Oriented Units (EOUs) and Units located in Special
Economic Zones (SEZs), shall be eligible for status.

7. FOCUS MARKET SCHEME (FMS) :

Following categories of export products/sectors shall be ineligible for

Duty Credit Scrip:
Supplies made to SEZ units
Service Exports
Diamonds and other precious, semi precious stones
Gold, silver, platinum and other precious metals
Jewelry
Ores and Concentrates
Cereals
Sugar
Crude/Petroleum Oil & Crude/Petroleum based Products

8. FOCUS PRODUCT SCHEME (FPS) :

Incentivise export of products having high export intensity

employment potential
Offset infrastructure inefficiencies and other associated costs

involved in marketing of these products

Export Oriented Units (EOU)

Allowed to sell products manufactured by them in DTA up to a limit of

90%
CENVAT Credit facility allowed

Foreign Trade Policy (2014-2019)

The new Foreign Trade Policy 2014-19 is made product wise and

location wise
Enhancing trade competitiveness
Indias share in world trade is expected to double from the present

level of 3% by the year 2020

Includes necessary measures to boost productivity

Conclusion
India is focusing on increasing its export value by providing possible

assistance to the traders in the form of financial aid, initiatives,

awards, promotional schemes, duty free schemes, etc.
India has reached a point where its exports to developed economies

cannot be increased so it has to focus on diversifying its market to

less developed economies and remote areas.
It is important for India to take an initiative to diversify the export

markets to emerging markets of Africa, Latin America & Oceania

through appropriate policy instruments