Anjuman-I-Islams Akbar Peerbhoy College of Commerce & Economics Export-Import Procedures and Documentation.

Anjuman-I-Islam’sAnjuman-I-Islam’sAkbar Peerbhoy College of Akbar Peerbhoy College of

Commerce & EconomicsCommerce & Economics

Export-Import Procedures and Export-Import Procedures and DocumentationDocumentation

IntroductionIntroduction

India adopted inward orientation and self-reliance after

Independence However, after 1991 India opened up by

liberalizing trade, foreign investment, and financial and

industrial trade, foreign investment, and financial and industrial

sector. The reforms helped the country experience a steady

growth of 6-7 percent improving standard of living, availability

of consumer goods, foreign trade and employment

opportunities.

IntroductionIntroduction

The Indian experience with Regional Trading

Arrangements (RTA) and preferential trading taken

up after 1991 as a part of the trade liberalization

strategy, and draws lessons from them to promote

more effective RTAs

India's Preferential Trade Areas (PTAs) India's Preferential Trade Areas (PTAs) Post 1991Post 1991

The South Asia Association for Regional Cooperation (SAARC) member countries have signed SAFTA replacing the ineffective South Asian Preferential Trade Agreement (SAPTA). India also has a framework agreement called BIMSTEC, and is engaging in Free Trade Area (FTA) negotiations with Association of South East Asian Nations, and has worked out a Comprehensive Economic Cooperation Agreement (CECA) with Singapore.

Review of PTAs in IndiaReview of PTAs in India

India has signed the maximum number of bilateral trade agreements. However, as seen in South Asia, the RTAs have not been effective in integrating the region or making a mark globally. In the face of successful trading blocs like North Atlantic Free Trade Area, European Union, So, the agreements merit a review to learn from the mistakes for maximum benefit.

(1)SAARC, SAPTA, SAFTA(1)SAARC, SAPTA, SAFTA

For a number of South Asian nations the 1990s marked liberalizing of trade and investment regimes to intensify their integration with the world economy. The regional cooperation body SAARC, including India, Pakistan, Bangladesh, Sri Lanka, The Maldives, Nepal and Bhutan, has not achieved much since its initiation in 1985, primarily due to the tenuous political relations between India and Pakistan and a general environment of mistrust among member countries.

Trade Liberalization And Trade Liberalization And Corporate PerformanceCorporate Performance

Import Liberalization Initiatives- 1Import Liberalization Initiatives- 1

Moving away from Import Substitution

Phasing out of Quantitative Restrictions on imports

Reduction in and simplification of tariff structure


Sharp Reduction in Customs Duty Rates Simple Average of Basic Duty Rates 1991-92: 128 per cent 2004-05: 22 per cent 2007-08: Peak duty reduced to 10 per cent for non-

agricultural goods Collection Rate (import revenue to value of imports

ratio) 1990-91: 47 per cent


2004-05: 11 per cent 2005-06: 10 per cent Distribution of Duty Rates Has Changed Remarkably 1991-92: 4100 out of 5200 commodities Basic

Rates above 100 per cent 2004-05: 4261 out of 5144 commodities Basic Rates Below

(BRB) 25 per cent 2007-08: 8537 out of 10084 commodities BRB 25

per cent

Exchange Rate ManagementExchange Rate Management

Initial Ex Ante Real Devaluation Switch to a market determined exchange

rate regime since 1993 Focus on management of volatility without

fixed rate target. Underlying demand and supply conditions

determine the exchange rate movements in an orderly way

Negative List for ImportsNegative List for Imports


Free Importable Items:

Free import of goods is not allowed for item included under the Prohibited list. However under Duty Exemption Scheme, certain items of import are allowed free of duty meant for export production. Such items are freely imported means they do not require import licences. Most capital goods are included in this category.


All the second hand goods, except second hand capital goods, may be imported only in accordance with provision of Foreign Trade Policy 2009-2014. Import of second hand capital goods shall be allowed freely.

When import of second hand capital goods are made they must have a minimum residual life of 5 years.


Prohibited List:Under the prohibited list, the following four items has been banned:

a) Unprocessed ivory.b) Animal rennet.c) Tallow fat, andd) Wild animal including their parts and products.


Restricted List:

Restricted items cannot be imported freely. They can be imported with the special permission / licence from DGFT (Director General of Foreign Trade).

The grounds on which importers are restricted includes health, security and environmental protection or the goods are reserved fro production by small entrepreneurs.


Small and tiny sector in India adopt home-based and village based production requiring low skills but making available employment to large number of people.

a) Consumer Goods:i. Camerasii. Exports goods


iii. Consumer telecommunication equipmentiv. Electronic goodsv. Watches and watch casesvi. Gift of consumer goodsvii. Saffronviii. Alcoholic beveragesix. Winesx. Cloves and cinnamonxi. Cotton, woolen, silk, man-made and blended

fabrics.


b) Safety and Security Items:i. Fire armsii. Ammunitioniii. Explosivesiv. Empty cartridges of all sizesv. Paper for security printing, currency paper,

stamp paper and other special types of paper.


c) Electronic Items:i. Audio Magnetic Tapesii. Video Magnetic Tapesiii. 20’’ and 21’’ colour TViv. Printed Circuit Boardsv. Computer system and Personal computer


d) Precious, Semi-Precious Stones:i. Diamondsii. Synthetic stones finished or unfinished,iii. Pearls both real and culturediv. Cubic zirconiav. Onyxvi. Granite, basalt, sand and monumental or

building stones.


e) Drugs and Pharmaceuticals:i. Fetracycline / oxytetracycline and their saltsii. Rifampiciniii. Streptomyciniv. Pencillinv. 6-APAvi. Vitamin B12vii. Vitamin B1, B2 and their salts.


f) Insecticides and Pesticides:i. DDTii. Pesticide, Insecticide, Weedicide, Herbicide,

Rodentcide and Niticideiii. Other items prohibited under Insecticides Act,

1969.


g) Seed, Plants and Animals:i. Plants, fruits and seedsii. Animals, birds and reptiles both body parts

and their products.iii. Liverstock, pureline, birds eggs, commercial

chicks etc.


h) Chemicals and Allied Items:i. Hazardous chemicalsii. Hazardous wastesiii. Crocidoliteiv. Tris phosphate


i) Items Covering Small Scale Sector:i. Paper cutting knives of all sizesii. Wire stitching machines single headediii. Domestic water metersiv. Copper oxychloridev. Flavouring essencevi. Drawing and mathematical instruments


j) Miscellaneous Items:i. Newsprintii. Silveriii. Cotton Yarniv. Batteries and Tyresv. Natural Rubbervi. Raw Silk


Canalised List:

These are the items which are imported

through canalsing agencies like STC, MMTC,

MTC etc.


Canalised Items of imports are:a. Petroleum Products (through Indian Oil

Corporation)b. Mica waste and scrap (through MMTC)c. Mineral oils and concentrates (MMTC and

MOIL)d. Niger seeds (through NAFED)


e. Maize unfit for human consumption but fit for use as poultry or animal feed (through food Corporation of India)

f. Vitamin A drugs (through STC)g. Coconut oil, RBD palm oil and RBD pal

steanin (through STC)

Categories of ImportersCategories of Importers

Importer means a person who

imports or intends to import and

hold an Importer-Exporter Code

Number.

Two CategoriesTwo Categories

1.Actual User (industrial)

2.Actual user (non-industries)

Actual User (Industrial)Actual User (Industrial)

It refers to a person who uses the imported

good for manufacturing in his own industrial

unit or manufacturing for his own use in

another unit including a jobbing unit

Actual User (Non-Industrial)Actual User (Non-Industrial)

It refers to person who uses the imported

goods for his own use in:

Any commercial establishment carrying on

any business trade or profession

Any laboratory, scientific or research and

other educational institution, university or

any other educational institution or hospital

Any service industry

Non-Actual UsersNon-Actual Users

It refers to such user who import

but not meant for commercial use

and includes

Personal imports

Imports of gift

Import for stock and sale

Special Scheme for Special Scheme for ImportersImporters

Special Scheme for ImportersSpecial Scheme for Importers

Under the Foreign Trade Policy 2009-2014, import of goods is permitted provided it helps to boost exports. The following special schemes for importers have been finalized:

1) Export Promotion Capital Goods Schemes (EPCG) Scheme:

Under The Export promotion capital (asset) goods (EPCG)scheme, the import of capital goods, both new and second hand, jigs, fixtures, dies & moulds are allowed. Spares upto 20% of CIF value may also be imported subject to export obligation.

EPCG scheme offers two windows. Under the first window, the capital goods may be imported at a concessional rate of custom duty of 10%. The importer is under obligation to export 4 times of the CIF value of capital goods over a period of 5 years.

The second window offers zero duty imports if CIF value of capital(asset) goods is 20 crore or more. In this case, the export obligation in 6 times of CIF value of capital goods to be fulfilled over a period of 8 years.

Features of EPCG Scheme:Features of EPCG Scheme:

a) The EPCG licence holder can buy capital (assets) goods from domestic manufacturers. Such domestic manufacturers are permitted to import components at concessional custom duty of 10%.

b) Whatever capital (assets) goods are imported, it is subject to actual user conditions.

c) The EPCG licence holder will submit a certificate from his banker when payment is received from abroad.

2) Duty Entitlement Passbook (DEPB) Scheme:

The main objective of DEPB scheme is to neutralize the incidence of the basic custom duty and surcharge on the import content of the export product. Import duty credit is granted against the export product.

Features of DEPB Scheme:Features of DEPB Scheme:

a) DEPB was introduced in the EXIM Policy 1997-2002.

b) An Exporter can import raw materials, parts, components (machinery), packing materials etc., Except those items mentioned as restricted items for imports.

c) DEPB shall be valid for 12 months from the date of its issue.

3) Duty Free Import Authorization (DFIA) scheme:

Under the Foreign Trade Policy 2009-2014 DFIA is issued to allow duty free import of Fuel, Oil, Inputs, Energy sources, Catalyst (vehicle) which are required for production of Export Product.

Features of DFIA Scheme:Features of DFIA Scheme:

a) A minimum 20% addition shall be required for issue of DFIA expect for items in Gems & Jewellery sector.

b) Goods Imported against transferable DFIA which are found defective or unfit for use may be Re-Exported.

c) Once Export obligation is fulfilled and required documents have been submitted, RA shall make authorization transferable.

Practical WorkPractical Work

Gold Touch Tea

They are working since last 12 years.

They make import of tea from —

Srilanka Assam Calcutta

They usually prefer to import from Assam and Calcutta, due to complexity involved in International Trade.

They market it in areas of Mumbai and out of Mumbai as well.

They had also exported tea in England and France to their known dealer.

After then they have not exported tea to other countries, due to unfavourable climatic condition in other countries and also due to the perishability of tea.

During transportation of tea it usually gets damaged.

They think if they import from other country it would reduce their profit margin.

They said that both export and import involves lengthy and time consuming procedure.

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Anjuman-I-Islams Akbar Peerbhoy College of Commerce & Economics Export-Import Procedures and Documentation.

Documents

cent slide

imports slide

documentation slide

free import of goods

hand goods

india india

negative list

industrial trade