Exim Policy of India

WHAT IS EXIM POLICY??

Exim Policy or Foreign Trade Policy is a set of

guidelines and instructions established by the DGFT in
matters related to the import and export of goods in
India.
 Why do we need import & export
Import & export means trade across the political boundaries of
different nation. No Nation is self sufficient and had all the goods
that it needs. This happens because of climatic variation &
unequal distribution of natural resources. As a result, countries all
over the world have become interdependent, which necessitated
foreign trade. A developing country like India with its fast
growing agricultural production to keep pace with the population
to keep pace with the population growth and growing Industrial
infrastructure
 Major imports of India
• Wheat
• Petroleum, crude and products
• Electronic goods
• Gold, pearls, precious & semi precious stones
• Organic chemicals
• Inorganic chemicals
• Iron steel
 Major export products of India
• GEMS AND JEWELRY
• COTTON
• MACHINERY AND INSTRUMENTS
• DRUGS AND PHARMACUTES
• PRIMARY AND SEMI FINISHED IRON AND STEEL
• PLASTIC AND LINOLIUM PRODUCTS
• BASMOTI RICE
 Brief history
Import export act was introduced by Gov. during second
world war and it lasted for around 45 yrs. and in June 1992
this act was superseded by the Foreign Trade (Development &
Regulation Act), 1992. The basic objective of this new act was
to give effect to the new liberalized export and import policy
of the Govt. Till 1985 annual policies were made but from
1985-92, three yr. policy was made and then 5 yr. policy was
made coinciding with 5 yr. plans 1992-97, 1997-02, 2002-07
& 2009-14.
 Governing Body of Exim Policy
•DGFT(Directorate General of Foreign Trade ) is the main governing
body of exim policy.

•All types of changes or modifications related to the EXIM Policy is

normally announced by the Union Minister of Commerce and Industry
who co-ordinates with the Ministry of Finance, the Directorate General
of Foreign Trade and network of DGFT Regional Offices.

•The Government of India notifies the Exim Policy for a period of five
years under Section 5 of the Foreign Trade (Development and
Regulation Act), 1992. The current Export Import Policy covers the
period 2009-2014.

•The Exim Policy is updated every year on the 31st of March and the
modifications, improvements and new schemes become effective from
1st April of every year.
 General provisions regarding export import
• Exports and Imports free unless regulated
• Compliance with Laws
• Interpretation of Policy
• Procedure:
• Exemption from Policy/ Procedure
• Principles of Restriction
• Restricted Goods
• Terms and Conditions of a License
• Importer-Exporter Code Number
• Exemption from Bank Guarantee
• Clearance of Goods from Customs
 Exim Policy Documents

The Exim Policy of India has been described in the following

documents:
Foreign Trade Policy (2009-14)
Handbook of Procedures (Volume 1)
Handbook of Procedures (Volume 2)
ITC (HS) (Indian Trade Clarification Code based on Harmonized
System of Coding) Classification of Import-Export items
•I Schedule – Import Policy
•II Schedule – Export Policy
 Indian Trade Clarification Code
The Export Import Policy regarding import or export of a
specific item is given in the ITC- HS Codes (better known
as Indian Trade Clarification Code based on Harmonized
System of Coding)
This was adopted in India for import-export operations.
Indian Custom uses an eight digit ITC-HS Codes to suit the
national trade requirements. ITC-HS codes are divided into
two schedules. Schedule-I describe the rules and EXIM
guidelines related to import policies where as Export Policy
Schedule-II describe the rules and regulation related to
export policies
 Objectives Of The Exim Policy
• 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 stimulate sustained economic growth by providing access to
essential raw materials, intermediates, components’,
consumables and capital goods required for augmenting
production.
• To enhance the techno local strength and efficiency of Indian
agriculture, industry and services, thereby, improving their
competitiveness.
• To generate new employment.
• Opportunities and encourage the attainment of internationally
accepted standards of quality.
• To provide quality consumer products at reasonable prices.
 Present Scenario
• India's merchandise exports fell for the 13th straight month as it fell
11.4 per cent in October.
• In April-October 2009 , exports contracted by 26.5%.
• Exporter’s working at 4-5 % margins.
• Lakhs of workers losing jobs (13 lakhs, UNCTAD-United Nations
Conference on Trade and Development)
• The WTO report said that India's exports during January-March 2010
increased by a robust 33 per cent.
• Cumulative value of exports for the period April-May registered a 
growth of 35.7  % in Dollar terms and 24.2  % in Rupee terms over
the same period last year.
 Objectives of EXIM Policy (2009-14)
 Short term objective
• Arrest and reverse the declining trend of exports
• Provide additional support to those sectors which have been hit
badly by recession in the developed world.
• Achieving an annual export growth of 15% with an annual export
target of US$ 200 billion by March 2011.

 In the remaining three years of this Foreign Trade Policy the country
should be able to come back on the high export growth path of around
25% per annum.

 Long term policy objective

• double India’s share in global trade by 2020
 Major Decisions
 DEPB (Duty Entitlement Pass Book) scheme to continue till Dec. 2010
 2 % Interest subvention extended till March 2010
 EPCG (Export Promotion Capital Goods) scheme at zero duty and export
obligation relaxed to 50%
 Income tax benefits for IT, EOU to continue till march 2011
 26 new markets added for incentives under Focus Market Scheme
 Reduction in transaction cost
• Application under EPCG simplified
• Fee slashed under FPS, FMS, MAI, MDA
• Time limit for conversion from one scheme to another increased
• Duty free samples increased
 Enhanced ECGC cover at 95% to adversely effected sectors continue.
 EOU allowed to sell 90% of products in DTA.
 Single Window Scheme for perishable farm products
 Committee formed to provide easy credit
 Framework of Foreign Trade Policy
Chapter 1 -1A Legal framework
1B Special focus initiatives
1C Board of trade
Chapter 2 - General provisions
Chapter 3 - Promotional Measures
Chapter 4 - Duty exemption / Remission schemes
Chapter 5 - Export Promotion Capital Goods Scheme
Chapter6 - EOUs (Export Oriented Units), EHTPs (Electronics
Hardware Technology Parks), STPs (Software Technology
Parks), BTPs (Bio-technology Parks)
Chapter 7 - SEZs, 7a Free Trade & warehousing zones
Chapter 8 - Deemed exports