CHANGE

IN
EXPORT IMPORT POLICY
Presented By:

Manandeep Singh Rana

Rajwanti Negi
 EXIM POLICY
► EXIM stands for export and import.
► EXIM POLICY OR FOREIGN TRADE POLICY is a set of
guidelines and instructions and various policy decision taken by
the government in the sphere of foreign trade i.e. with respect to
import and export of the country.
► It is prepared and announced by the central government(Ministry
OF Commerce)

Aspect of EXIM Policy:

 Import policy:- which is concerned with regulation and
management of imports.
 Export policy:- which is concerned with exports not only
promotion but also regulation.
Legal framework
 Legal framework for foreign trade has provided by Foreign
Trade (Development And Regulation) Act 1992 which
replaced the Imports and Exports (Control) Act 1947.

 Beside this act there are some other laws also which control
the trade in certain items like export of coffee is regulated by
Indian Coffee Act 1942 and export of tea is regulated by Tea
Act 1953 etc.

 Section-5 of this act gives power to central government to

announce the Export Import policy for the country.
General objective of EXIM policy:-
 Promoting exports and augmenting foreign exchange earnings.
 Regulating export when ever it is necessary for the purpose of
either avoid competition among the Indian exporters or ensuring
domestic availability of essential items.
 To restrict country’s imports and provide a sheltered market for
domestic industries for rapid growth.

Initially the EXIM Policy was introduced for the period of three
years with main objective to boost the export business in India.
After 1992, it is being made for 5 years.
Some change has also been introduced annually in it.
 EXIM Policy 1985
► In the year 1985, the government of India
adopted three year EXIM Policy for first time
which was advocated by Alexandra committee
in 1978.

► Its main objectives were:

 To stablize the export and import policy.
 To remove uncertainity so that industries could
frame long term goals.
► Following steps were announced:-
 Strengthening the base of export production.
 Improvement in administration.
 Relaxation in imports to promote exports.
 To provide facility for technological improvements.
 Import substitution method in selected spheres.
 To help Indian products to compete in foreign market.
 Relaxing the process of getting inputs.
 EXIM POLICY 1990
► The government announced on April 30, 1990 a new export
import policy for a 3 year period.

► Objectives:-
 To encourage rapid and sustained growth in export.
 To facilitate availability of necessary imported inputs.
 To simplify and streamline the procedures of import licensing
and export promotion.
 To support research and development institution for building up
their scientific and technological capability.
 To promote efficient import substitution and self reliance.
► Sailent feature of policy are:-
 List of items imported under open general licence(OGL) were
expanded.

 Number of capital goods item permitted under OGL was

increased was increased from 1261 to 1343.

 Import of certain raw materials such as petroleum, products,

fertilizers, seeds etc. were canalised through public sector
agencies.

 An automatic licensing was introduced under which upto some

percent of the value of previous year’s licence can be imported.
 For registered exporters, the concept of net foreign exchange
earning was made a guiding criterion for issue of licences.

 Under the scheme of registration of export house, the average

annual of net foreign exchange earning for base period should
not be less than Rs. 5 crores and for trading houses, it should not
be less than Rs. 20 crores.

 Scheme of Star Trading House was introduced for exported with

average annual of net foreign exchange earning of Rs. 75 crore in
the preceeding three licensing period of the base period.

 Under the Duty Exemption Scheme, Blanket Advance licensing

was introduced for manfacturer exporters having a minimum net
foreign exchange earning of Rs. 10 crore in the preceeding three
years.
► Evaluation of policy:-
Critics have noted following points:-
 Adverse effect on the growth of capital goods
industry in india.
 Import policy likely to hit small scale industries.
 Adverse effect on indigeneous industry.
 Technological degrading in the name of
technological upgrading.
► the Government of India for the first time
introduced the Indian Exim Policy on April I, 1992.
In order to bring stability and continuity, the
Export Import Policy was made for the duration of
5 years. However, the Central Government
reserves the right in public interest to make any
amendments to the trade Policy in exercise of the
powers conferred by Section-5 of the Act.
► Objective:-
 liberalise imports
 boost exports.
► Export Import Policy  is believed to be an important
step towards the economic reforms of India
Main steps taken are:-
► introduction of the duty-free Export Promotion Capital
Goods (EPCG) scheme
► strengthening of the Advance Licensing System
► waiving of the condition on export proceeds realisation
► rationalisation of schemes related to Export Oriented Units
and units in the Export Processing Zones.
 EXIM POLICY(1997 -2002)
► With time the Exim Policy 1992-1997 became old, and a
New Export Import Policy was need for the smooth functioning
of the Indian export import trade. Hence, the Government of
India introduced a new Exim Policy for the year 1997-2002.

► This policy has further simplified the procedures and reduced the
interface between exporters and the Director General of  Foreign
Trade (DGFT) by reducing the number of documents required
for export by half
.
► Import has been further liberalized and better efforts have been
made to promote Indian exports in international trade.
► Objectives:-
 To accelerate the economy from low level of economic activities to
high level of economic activities by making it a globally oriented
vibrant economy and to derive maximum benefits from expanding
global market opportunities.

 To motivate sustained economic growth by providing access to

essential raw materials, intermediates, components,' consumables and
capital goods.

 To improve the technological strength and efficiency of Indian

agriculture, industry and services, thereby, improving their
competitiveness.

 To create new employment. Opportunities and encourage the

attainment of internationally accepted standards of quality
.
 To give quality consumer products at practical prices.
Policy were:-
►  Liberalization:- A very important feature of the policy is
liberalization.  It has substantially eliminated licensing,
quantitative restrictions and other regulatory and discretionary
controls. All goods, except those coming under negative list, may
be freely imported or exported.

► Imports Liberalization:- Of 542 items from the restricted list

150 items have been transferred to Special Import Licence (SIL)
list and remaining 392 items have been transferred to Open
General Licence (OGL) List.
► Export promotion capital goods (EPCG) scheme:- the duty on
imported capital goods under EPCG scheme has been reduced
from 15% to 10%. Under the zero duty EPCG scheme, the
threshold limit has been reduced from rs. 20 crore to rs. 5 crore
for agricultural and allied sectors.

► Advance licence scheme:- under advance license scheme, the

period for export obligation has been extended from 12 months
to 18 months. A further extension for six months can be given on
payment of 1 % of the value of unfulfilled exports.

► Duty entitlement pass book scheme:- under the depb scheme

an exporter may apply for credit, as a specified percentage of fob
value of exports, made in freely convertible currency. Such credit
can be can be utilized for import of raw materials, intermediates,
components, parts, packaging materials, etc for export purpose.
Implications of Exim Policy 1997 –2002
 The Exim Policy 1997-02 proposed with an aim to prepare a
framework for globalizations of Indian economy.

 In the EXIM policy 1997-02, a series of reform measures have

been introduced in order to give boost to India's industrial growth
and generate employment opportunities in non-agricultural sector.

 It encourage foreign investment in India.

 The Exim Policy 1997-2002 successfully fulfills one of the

India’s long terms objective of Self-reliance.

 It encouraged Indian industries to undertake research and

development programmers and upgrade the quality of their
products.
 Exim Policy 2002 – 2007
► Mr. Murasoli maran, Former commerce minister announced the
exim policy 2002 - 2007 . it deals with both the export and import of
merchandise and services. It is worth mentioning here that the exim
policy: 1997 - 2002 had accorded a status of exporter to the business
firm exporting services with effect from1.4.1999. Such business
firms are known as service providers.

► Objectives:-
o To encourage economic growth of India by providing supply of
essential raw materials, intermediates, components, consumables
and capital goods required for augmenting production and providing
services.
o To improve the technological strength and efficiency of Indian
agriculture, industry and services, thereby improving their
competitive strength
o To facilitate sustained growth in exports to attain a share of atleast
1% of global merchandise trade.
o To provide consumers with good quality products and
services at internationally competitive prices while at the
same time creating a level playing field for the domestic
producers.

► Policy are:-
 Special economic zones (sezs):- offshore banking units
shall be permitted in sezs to indian banks. Units in SEZ
would be permitted to undertake hedging of commodity
price risks, provided such transactions are undertaken by
the units on stand-alone basis. It has also been decided to
permit external commercial borrowings for a tenure of less
than three years in sezs. It is exempted from CRR and
SLR.
 Employment-Oriented
a) Agriculture: Export restrictions like registration and packaging
requirement are removed. Quantitative and packaging
restrictions have been removed. Restrictions on export of all
cultivated varieties of seed, except jute and onion, removed. To
promote export of agro and agro based products, 20 agri export
zones have been notified. In order to promote diversification of
agriculture, transport subsidy shall be available.

b) Cottage Sector and Handicrafts: An amount of Rs. 5 crore

under Market Access Initiative (MAI) has been earmarked for
promoting cottage industry. These units shall be entitled to the
benefit of Export House status on achieving lower average export
performance of Rs.5 crore as against Rs. 15 crore for others. The
units in handicraft sector shall be entitled to duty free imports of
an enlarged list of items as embellishments upto 3% of FOB
value of their exports.
c) Small Scale Industry: Common service providers in these areas
shall be entitled for facility of EPCG scheme. Such areas will
receive priority for assistance for identified critical infrastructure
gaps from the scheme on Central Assistance to States.
Entitlement for Export House status at Rs. 5 crore.

d) Textiles: Sample fabrics permitted duty free within the 3% limit

for trimmings and embellishments. Duty Entitlement Passbook
(DEPB) rates for all kinds of blended fabrics permitted. Such
blended fabrics to have the lowest rate as applicable to different
constituent fabrics.

e) Gem & Jewellery : Customs duty on import of rough diamonds

is being reduced to 0%. Licensing regime for rough diamond is
being abolished. This should help the country emerge as a major
international centre for diamonds
 Technology-oriented
Electronic Hardware: The electronic hardware technology park
(EHTP) scheme is being modified to enable the sector to face the
zero duty regime under ita(information technology agreement).
Projects: Free import of equipment and other goods used abroad
for more than one year.

 Growth-Oriented
Strategic Package for Status Holders:-The status holders shall
be eligible for the following new/ special facilities:
Licence/Certificate/Permissions and Customs clearances for both
imports and exports on self-declaration basis. Fixation of Input-
Output norms on priority. Priority Finance for medium and long
term capital requirement as per conditions notified by RBI.
Exemption from compulsory negotiation of documents through
banks.
Implications:
► This policy focused on all round development of India
whather it was technology oriented or growth oriented.
► The contribution of agriculture and allied sector was
also increased to exports with the help of certain
privilleges and incentives.
► The cottage industry has also started to contribute to
exports.
► It also focused on small and medium sector enterprises.
► It also helped in developing the industrial sector by
importing capital and raw material goods duty free.
 EXIM POLICY(2004-2009)
► Mr. Kamal Nath, Union Commerce Minister announced
the foreign trade policy for 5 years on 31 august 2004.

► Objectives:-
 To double India’s percentage share of global
merchandise trade from 0.7% in 2003 to 1.5% in 2009.

 To act as an effective instrument of economic growth

by giving a thrust to employment generation especially
in semi-urban or rural areas.
► Strategies to achieve these objective are:-
 Unshackling of control.
 Creating an atmosphere of trust and transparency.
 Simplifying procedures and bringing down transaction costs.
 Adopting fundamental principle that duties and levies should not
be exported.
 Facilitating development of India as a global hub for
manufacturing, trading and services
 Identifying and nuturing special focus areas to facilitate
development.
 Facilitating technological and infrastructural upgradation of all
the sectors of Indian Economy.
► Policy are:-
 Special Focus Initiatives:- With a view to doubling percentage
share of global trade within 5 years and expanding employment
opportunities, especially in semi urban and rural areas, certain
special focus initiatives have been identified for the agriculture,
handlooms, handicraft, gems & jewellery and leather sectors.

Agriculture:- A new scheme called the Vishesh Krishi Upaj

Yojana (Special Agricultural Produce Scheme) for promoting the
export of fruits, vegetables, flowers, minor forest produce, and
their value added products has been introduced. Import of capital
goods shall be permitted duty free under the EPCG Scheme.
 Handlooms and Handicraft:- specific funds would be
earmarked for promoting handloom and handicraft exports. Duty
free import entitlement of specified trimmings and
embellishments shall be 5% of FOB value of exports during the
previous financial year. New towns of export excellence with a
threshold limit of Rs 250 crore shall be notified.

Gems & Jewellery:- Import of gold of 18 carat and above shall

be allowed under the replenishment scheme. Duty free import
entitlement of consumables for metals other than Gold, Platinum
shall be 2% of FOB value of exports during the previous
financial year. Duty free re-import entitlement for rejected
jewellery shall be 2% of the FOB value of exports
 Board of Trade: The Board of Trade shall be revamped and
given a clear and dynamic role in advising government on
relevant issues connected with Foreign Trade Policy. There
would be a process of continuous interaction between the Board
of Trade and Government in order to achieve the desired
objective of boosting India

 Export promotion scheme: A new scheme called “ target plus”

has been introduced. Duty free credit would be entitled to
exporters on incremental exports. For incremental growth of over
20%, 25% and 100%, the duty free credit would be 5%, 10% and
15% respectively, of fob value of incremental export.

 Service export: Scheme called “served from india” as a brand

instantly recognized abroad in which individual service providers
earning foreign exchange of Rs. 10 lakh would be elligible for
10% of total foreign exchange earning.
 Duty free import under EPGC (Export promotion Capital
goods): The scheme allows import of capital goods for pre
production, production and post production at 5% Customs duty.
Capital goods would be allowed at 0% duty for exports of
agricultural products.

 Export Oriented unit(EOUs):- EOUs shall be exempted from

service tax in proportion to their exported goods and services.

 New stautus hoder categorization:- One star export house: Rs.

25 crore, two star export house: Rs. 100 crore, three star export
house: Rs. 500 crore, four star export house: Rs. 1500 crore and
five star export house: Rs. 5000 crore
It will be entitled to a number of privileges including fast track
clearance procedure, exemption from furnishing back guarantees
etc.
 Import of second hand capital goods shall be permitted without
any age restriction

 Bio technology park is setup.

 Duty Drawback: The Duty Drawback Scheme is administered

by the Directorate of Drawback, Ministry of Finance. Under
Duty Drawback scheme, an exporter is entitled to claim. Indian
Customs Duty paid on the imported goods and Central Excise
Duty paid on indigenous raw materials or components.

 Excise Duty Refund: Excise Duty is a tax imposed by the

Central Government on goods manufactured in India. Excise
duty is collected at source, i.e., before removal of goods from the
factory premises. Export goods are totally exempted from central
excise duty.
 Neutralising high fuel costs: Fuel costs to be rebated
by it in Standard Input Output Norms (SIONs) for all
export products. This would enhance the cost
competitiveness of our export products.

Re-location of industries: To encourage re-location of

industries to India, plant and machineries would be
permitted to be imported without a licence, where the
depreciated value of such relocating plants exceeds Rs.
50 crores.
► Foreign Trade Warehousing Zones: Proposals for setting up of FTWZs
may be made by public sector undertakings or public limited companies or by
joint ventures in technical collaboration with experienced infrastructure
developers. The proposals shall be considered by the Board of Approval in the
Department of Commerce. On approval, the developer will be issued a letter
of permission for the development, operation and maintenance of such
FTWZ. Foreign Direct Investment would be permitted up to 100% in the
development and establishment of the zones and their infrastructural facilities.
The proposal must entail a minimum outlay of Rs.100 crores for the creation
and development of the infrastructure facilities, with a minimum built up area
of five lakh sq.mts.

► DFIA: Effective from 1st May, 2006, Duty Free Import Authorisation or
DFIA in short is issued to allow duty free import of inputs which are used in
the manufacture of the export product (making normal allowance for
wastage), and fuel, energy, catalyst etc. which are consumed or utilised in the
course of their use to obtain the export product. Duty Free Import
Authorisation is issued on the basis of inputs and export items given under
Standard Input and Output Norms(SION).
► Deemed Export is a special type of
transaction in the Indian Exim policy in
which the payment is received before the
goods are delivered. The payment can be
done in Indian Rupees or in Foreign
Exchange. As the deemed export is also a
source of foreign exchange, so the
Government of India has given the benefit
duty free import of inputs
► Implication of policy:-
 It is claimed that first time the nation has presented such a comprehensive
policy. But in it there is not anything significant about import development.

 This policy provide benefit to some thrust areas which are agriculture,
handicrafts, handlooms etc. which are dominated by small and medium
enterprises so it helped in boosting export and generating employment.

 By rationalizing star export houses into five star export house, it helped in
encouraging small export house.

 It also focussed on service industry.

 Target plus scheme act as an incentive to exporter.

 All goods and services were exempted from service tax.

 No additional custom duty on import of capital
goods for marine and electronic sector.
 In an attempt to encourage small scale sector,
they are given triple weightage to include in
export house or trade house.
 All goods and services were exempted from
service tax
 Uneffective implementation make difficult to
achieve the real objective of the policy.
 EXIM POLICY 1999-2000
► Failure to increase exports and facilitate imports as well as to
keep the trade balance gap within reasonable limits during 1996-
97 and 1998-99 forced Mr. Ramkrishna Hedge, former
commerce minister to announce on 31ST March 1999 the exim
policy for 1999-2000.

► Main highlights:
 894 items were added to free list of imports and an additional
414 items put on special import licence route.
 The concept of free trade zones without customs intervention and
with “greater operational freedom in export activity” would be
implemented. All export promotion zone is converted into Free
Trade Zone.
 Under the EPCG Scheme the threshold limit for zero duty capital
goods was reduced from Rs. 20 crore to Rs. 1 crore for
chemicals, plastic and textile.
 EXIM POLICY 2000-2001
The policy highlighted two important measures:
► Setting up of special economic zone
This unit would be able to import raw material and capital goods
duty free. It deemed to be foreign territory for the purpose of
trade and tarrifs and goods going to it treated as deemed export.
It would be able to obtain products from the domestic tariff
area(DTA) without paying terminal excise duty.
► Alligning EXIM procedures with WTO norms.
India did not remove quantitative restrictions on its import fully
with respect to consumer products and certain agriculture
products. India negotiated with many countries and aggreed to
phase out it by 2003. EXIM Policy-2000 removed it on 714
items out of 1429 items.
 EXIM POLICY 2001-02
It highlighted:
► Removal of quntitative restrictions from all remainig items.
► Import restriction of the remaining 715 items were removed.
► Imports of the second hand good, meat and primary agriculture
product were allowed.
► Import of farm products were permitted only through state
trading agencies.
► EPCG Scheme and DES eas extended to agriculture export as
well.
► Agri economic zones were formed.
 EXIM Policy 2003-2004
► Poicy suggested:-
► Promotional measures
To promote export related infrastructure, rupee payments received for Port
handling services admissible for discharge of export obligation under EPCG
To boost R &D activity, import of Prototypes shall be allowed to Actual Users
without any limit (presently restricted to 10 nos. per annum)

► Boost to Tourism
Heritage Hotels, 1 and 2 star hotels and Stand Alone Restaurants extended the
benefits of duty free imports admissible to Tourism Sector.
Import of all kinds of Capital Goods including office and professional
equipment allowed under the Duty Free Entitlement scheme. However, import
of agriculture/dairy products and cars shall not be permitted.
Duty Free Entitlement Certificate scheme liberalized
► Duty Exemption Scheme
To offset the high power costs faced by the manufacturing
industry, duty free Fuel shall be allowed.
► Project Exports
Equity base of ECGC being raised from Rs 500 crores to Rs 800
crores for a better risk management of Indian exporters.
National Export Insurance Account being created for ECGC to
underwrite high value projects implemented by Indian
Companies abroad. Details will be worked out in consultation
with Ministry of Finance.
Gold Card Scheme for credit worthy exporters with good track
record for easy availability of export credit on best terms being
worked out by RBI.
► Deemed Exports
Deemed export facility extended for items having Zero% basic
Customs duty.
Deemed export facility extended to Fertiliser & Refinery
projects spilled over from 8th and 9th Plan periods.
► Removal of Quantitative Restrictions
Imports allowed freely for Gold and Silver
► Technical Regulations on Imports
Technical regulations applicable on imports for export production
rationalised for food & textile items.
BIS Mandatory Quality Certification scheme on imports
amended for importers having captive consumption and in-house
testing facilities. 
 EXIM POLICY 2005-06
► The main focus of this policy is not only to increase
export earning but the creation of more job also.

► The main area for boosting export and job creation are:
agriculture, diary, polutory, marine etc.

► A package of incentives and strategy has been put.

► For jems and jewellery sector, duty free imports of

samples upto Rs. 3 lakh are allowed.
 EXIM POLICY 2007-2008
It highlighted:
► Encouragement to agro exports and employment generation in
the agriculture sector.

► New initiative for infrastructure development namely cold

storage units, pack houses, reefer vans/containers, etc.,For agro
sector, is being launched.

► In line with the government objective of having all inclusive

growth, vishesh krishi and gram udyog yojana scheme expanded
further to include forest based and agricultural products.

► A new scheme to give impetus to exports of high tech products,

is being launched. Exports of specified high tech products are
proposed to be rewarded.
► Long standing major grievance of trade is being addressed by
providing service tax exemption/remission on services rendered
in India and utilised by exporters. This should bring cheers to the
exporting fraternity.

► In line with the government approach to address genuine

grievances, services rendered abroad and charged on exports
from India to be exempted from service tax.

► For effectively ensuring all inclusive growth for farmers and

tribals, focus products scheme expanded further to include new
agro and forest products.

► Exports and employment in handloom and handicraft sectors

provided further push through duty free access to machinery and
equipment for effluent treatment plants.
► To sharpen core strength of promising gems and
jewellery sectors and handicraft sector, duty free access
to tools, machinery and equipment proposed to be
provided to give them competitive edge.

► Export of rhodium polished silver jewellery to be

encouraged further.

► Rationalisation in the threshold criteria and

reclassification of status holder scheme.
 EXIM POLICY 2008-2009
Policy highlighted:-
 DEPB scheme has been extended till May 2009.

 Refund of service tax on almost all the services.

 Income tax benefit to 100% EOUs has been extended by

Government.

 Coverage of FMS has been increased and additional 10 countries

have been included. These are Mongolia, Bosnia-Herzegovina,
Albania, Macedonia, Croatia, Honduras, Djibouti, Sudan, Ghana
and Colombia.

 Split-up facility under DFIA Scheme introduced.

 EOUs shall be allowed to pay excise duty on monthly basis,
instead of the present system of paying duty on consignment
basis.

 Customs duty payable under EPCG Scheme has been reduced

from 5% to 3%.

 Setting up a new Export Promotion Council for Telecom Sector.

 Value of jeweler parcels, through Foreign Post Office is raised to

US$ 75,000. Earlier it was from US$ 50,000.

 Duty free import of samples has been increased from Rs.75 000
to Rs. 1, 00,000.
 EXIM POLICY 2009-2010
IT HIGHLIGHT
► Rupees 325 Crores would be provided under Promotional
Schemes for Leather, Textile etc. for exports made with effect
from 1.4.09.

► Technical textiles and stapling machine have been added under

Focus Product Scheme.

► STCL Limited, Diamond India Limited, MSTC Limited, Gem &

Jewellery Export Promotion Council and Star Trading Houses (for
gem and jewellery sector) have been added under the list of
nominated agencies notified under Para 4A.4 of Foreign Trade
Policy for the purpose of import of precious metals.The procedure
and monitoring provisions for implementation of these additional
agencies would be notified separately in line with RBI guidelines.
► Export obligation period against advance authorizations has been
extended upto 36 months in view of the present global economic
slowdown.
► At present, DEPB/Duty Credit Scrip can be used for payment of
duty only on items which are under free category. The utilization
is now extended for payment of duty for import of restricted
items also.
► Value cap applicable under DEPB have been revised upwards for
products.
► Under EPCG scheme, in case of decline in exports of a
product(s) by more than 5%, the export obligation for all
exporters of that product(s) is to be reduced proportionately. This
provision has been extended for the year 2009-10, for exports
during 2008-09.
► In view of the prevailing global slowdown, the threshold limit for
recognition as Premier Trading House has now been reduced to
Rs.7500 crores.

► Bhilwara in Rajasthan and Surat in Gujarat have been recognized

as Towns of Export Excellence, for textiles and diamonds
respectively.

► Export of blood samples is now permitted without license after

obtaining ‘no objection certificate’ from Director General of
Health Services (DGHS).

► Independent office of DGFT being opened at Srinagar.