EXPORT MARKETING MODULE IIInktdegreecollege.org/uploads/students/export_mkt__SemV... · 2020. 8. 1. · Incentive scrip, and VKGUY. •Duty credit scrip-benefit to exporter on Notified

EXPORT MARKETING

MODULE IIIDr. J.V.Kulkarni

Module 3. India's Foreign Trade Policy

• (a) Foreign Trade Policy (FTP) 2015-20 –

Highlights and Implications, Export Trade

Facilitations and ease of doing business as per the

new FTP.

• b) Role of Directorate General of Foreign Trade (DGFT), Negative List of Exports, Deemed Exports

• (c) Benefits to Status Holders and Towns of Excellence, Common Benefits For EHTP, BTP and STP

• Benefits enjoyed by (IIAS) Integrated Industrial Areas (SEZ), EOU, AEZ

Objectives-FTP2015-20

• To provide a framework for increasing exports of goods

and services.

• To generate employment.

• To increase value addition in the country.

• to enable India to respond to the challenges of the

external environment,

• To keep pace with a rapidly evolving international trading

architecture

• To lead to country’s economic growth and development

Highlights-2015-20 FTP

• The Foreign Trade Policy (FTP) 2015-20 was unveiled by

Ms Nirmala Sitharaman, Minister of State for Commerce &

Industry (Independent Charge), Government of India on

April 1, 2015.

• ‘Make in India’ programme.

• Merchandise Exports from India Scheme (MEIS)

• Services Exports from India Scheme (SEIS) for

increasing exports of notified services.

Highlights—FTP contd…

• EPCG scheme.

• EOU/STP scheme

• Scheme for status holders

• Approved Exporter scheme

• Online filing of documents

• e commerce exports

• Quality control and trade disputes

• Duty exemption

• Export of defense items

Merchandise Exports from India Scheme

(MEIS)

• Merged 5 schemes viz: Focus Product Scheme,

Market Linked Focus Product Scheme, Agri. Infra.

Incentive scrip, and VKGUY.

• Duty credit scrip-benefit to exporter on Notified goods.

• Notified goods means

• Goods having Domestic content , labour intensive

products, hi tech products, pharma, leather,steeland

wooden products.

MEIS-contd..

• Duty Credit Scrip:-2-5% of FOB

• Notified Markets: 239 countries are included.

• Used for payment of customs duty, excise duty, service

tax.

• Benefit extended to SEZ units

Service Exports from India Scheme

SEIS• Service providers located in India.

• Notified services.

• Duty credit scrip-benefit to service exporters.

• SEIS scrip: 3-5% of Net Foreign Exchange.(NEF)

• NEF of US$ 15,000/ in the preceding financial year are

eligible.

• Benefits extended to SEZ units.

EPCG scheme

• Goods imported should be supported by exports –6 times

to imports.

• Installation certificate

EOU/STP scheme

• Exporters having physical Export turnover—at least rs.10

crore are eligible.

• Fast track clearance

• Warehouse facility near port

• Extension of one year achieving.

Status Holder Scheme

• Status of export houses has been changed.

• Export Performance during current and previous 2 years is considered.

• The status is as follows:

• 1 Star: 3 million US $

• 2 Star:25 million US $

• 3 Star: 100million US $

• 4 Star:500million US $

• 5 Star:2000million US $

Other schemes.

❑Approved Exporter Scheme/Self Certification:

• Goods originated in India will get preferential treatment.

❑ Online filling of documents

❑E-commerce exports-handloom,books,leather footwear, toys, fashion garments –upto rs. 25000/ per cosignmentreceive benefit.

❑Committee to solve disputes regarding quality complaints /disputes.

Other Schemes

❑Duty exemption: Advanced authorisation, duty free tariff

preference to 33 least developed countries.

❑Export of defense items: export obligation period is

increased up to 24 months.

Highlights—FTP contd…

• Measures have been taken to give a boost to exports of defense and hi-tech items.

• E-Commerce exports of handloom products, books/periodicals, leather footwear, toys and customised fashion garments through courier or foreign post office would also be able to get benefit of MEIS (for values up to INR 25,000).

• Manufacturers, who are also status holders, will now be able to self-certify their manufactured goods in phases, as originating from India with a view to qualifying for preferential treatment under various forms of bilateral and regional trade agreements. This ‘Approved Exporter System’ will help manufacturer exporters considerably in getting fast access to international markets.

Highlights of FTP contd…• A number of steps have been taken for encouraging manufacturing and exports

under 100 per cent EOU/EHTP/STPI/BTP Schemes. The steps include a fast track clearance facility for these units, permitting them to share infrastructure facilities, permitting inter unit transfer of goods and services, permitting them to set up warehouses near the port of export and to use duty free equipment for training purposes.

• 108 MSME clusters have been identified for focused interventions to boost exports. Accordingly, ‘Niryat Bandhu Scheme’ has been galvanised and repositioned to achieve the objectives of ‘Skill India’.

• Trade facilitation and enhancing the ease of doing business are the other major focus areas in this new FTP. One of the major objective of new FTP is to move towards paperless working in 24x7 environment.

Implications of FTP 2015-20

• Reduced export obligations under Make in India.(90% to 75%)

• MEIS: reduced complications

• SEIS: Broad range of notified services to boost service sector of India.

• EOU/STP/EHTP/BTP scheme: boost concerned products/services

• Self certification of manufacturing goods: Reduce complications

Implications of FTP 2015-20

• Deemed exports to status holders: more exporters get

status of export house.

• Boost to e commerce.

• Fast settlement of trade disputes.

• Boost to SEZ Unit.: all benefits of MSIS,SEIS schemes

given to SEZ units

Export Trade facilitation –New Export

Trade policy❑Objective: to make Indian exports more competitive by

giving them priority in cutting down cost and time for

exports.

❑Measures:

• Niryat Bandhu

• Online complaint registration and monitoring system

• Issue of e IEC: Import Export Code

Measures contd..

• E BRC: Bank reconciliation statement

• MOU with State Govt.

• Exporter Importer Profile

• Reduction in documents

• EDI

• Free passage of Export consignment

• 24 By & customs clearance

Measures contd…

• Single window customs clearance

• Self assessment of Customs duty

• Facilitate exports of perishable goods

• Prior filing facility for shipping bill

• Simplified procedures

• Online filing of documents

• Online inter ministerial consultation

Directorate General of Foreign Trade

(DGFT)

• Role

• Negative List of Exports,

• Deemed Exports

DGFT

• Directorate General of Foreign Trade (DGFT) organisation

is an attached office of the Ministry of Commerce and

Industry

• Headed by Director General of Foreign Trade.

• DGFT is responsible for implementing the Foreign Trade

Policy

• Main objective of promoting India’s exports.

Role/Functions of DGFT

• Implementation of FTP

• Granting IEC

• Permits transit of goods

• Solves export related problems

• Interacts with trade and industry

• Coordinates with other offices

• Pulications for the benefit of exporters

• Trade facilitator

• E governance initiative : working on EDI

Negative List of Exports

• Goods those can not be freely exported.

1. Prohibited:

2. Restricted:

3. Canalised:

1. Prohibited goods

• Wild animals

• Exotic birds

• Wood and wood products

• Plants

• Human skeleton

• Tallow/fat/oil from animal

• Notified Chemicals

• Notified Sandle wood items

• Red sandle wood in any form

2. Restricted Items

❑ TO be exported only with special license issued by

DGFT-31 items.

• Cattle.

• Camel.

• Chemical fertilizers and micronutrient fertilizers.

• Fabric with excerpts/verses of Quran

• De oiled ground nut cake.

Restricted items contd…

• Fresh and frozen silver pompfrets

• Fur of domestic animals

• Fodder

• Hides and skins as mentioned in FTP Policy

3. Canalised itemsTo be exported through canalised agencies only

Item

• Petroleum Products

• Gum Karya

• Mica waste/scrap

• Mineral Ores and

concentrates

• Nigar Seeds

• Onions

Canalised Agency

• Indian Oil Corporation

• TRIFED

• MMTC/ MITCO

• Indian Rare Earths Ltd.

• Kerala Minerals and Metals

• MMTC/MOIL

• NAFED/TRIFED/2 more

• 13 STCs including

NAFED/Spice Trading Cop.

Deemed Exports

• DGFT; Transactions in which goods do not leave the

Country and

• Payment for those is made either in Indian Rupees or in

foreign currency.

❑ Purpose:

• The supplier can claim duty drawback.

• Refund of excise duty can be claimed.

• Duty free imports are possible.

Deemed Exports

Types of transactions• Supply of goods to duty free license issued.

• Supply of goods to Units under SEZ/STP?EHTP/EOU.

• Supply of capital goods to license holder under EPCG.

• Supply of goods to projects under multilateral or bilateral

agencies/funds.

• Supply of capital goods to fertiliser plants.

Deemed Exports

Types of transactions• Supply of goods to projects under power/oil and gas

sectors notified by Ministry of Finance.

• Supply of marine freight containers.

• Supply of projects funded by UN agencies.

• Supply of goods to nuclear power projects under

competitive bidding.

• Any other category as specified by GOI.

Benefits to status holders

• Incentive scrip for import of capital goods.

• Foreign Exchange retention.

• Exemption for negotiation of documents through Banks.

• Custom clearance on self declaration.

• Longer credit period.

• Exemption from furnishing bank guarantee.

• Fixation of Input Out put norms.

• Approved exporter scheme

Towns of excellence

• Industrial clusters: to maximise their export potentials.

Speciality of the area.

• 2015—35 towns

• E.g. Bhiwandi in Maharashtra for textiles.

• Kolhapur in Maharashtra for Textiles

• Ludhiana in Punjab for woollen knitwear.

• Shrinagar in J&K for handicrafts.

Benefits to Town of Excellence

• MAI :Market Access Initiative.

Finance provided for exhibitions, fairs,promotion, Market

survey abroad.

• EPCG benefits: Common service provider in the area is

given benefit to enable the exporter to import heavy

machinery.

• .ASIDE benefits: Development of infrastructure.

EHTP

• Electronic Hardware Technology Park

• 100% EOU. for manufacturing electronic, hardware

equipments, components.

• Central/state Govt./public or Pvt. Sector undertaking can

set up it.

• Anywhere in India

• Duty free bonded area under sec.65 of Customs Act

1962.

• Hardware Technology Park Scheme

• Software Technology Parks of India Under Ministry of Electronics and Information Technology

• Units undertaking to export their entire production of goods and services may be set up under the Electronic Hardware Technology Park (E.H.T.P.) Scheme. Such units may be engaged in manufacture and services.

• Commensurate with the policy to give a special thrust to export of electronic hardware, such units would be encouraged to be set up under the aforementioned export oriented scheme.

EHTP

Scheme Benefits & Highlights• Overall benefits of the scheme are as follow:

• Electronics Hardware Technology Park unit may import free of duty all types of goods, including capital goods as defined in the Export Import (E.X.I.M.) Policy, required by it for manufacture, services, production and processing or in connection therewith.

• The units shall also be permitted to import goods, including capital goods, free of cost or on loan from clients required for the approved activity.

EHTP

Scheme Benefits & Highlights• Electronics Hardware Technology Park units may procure goods

required by them for manufacture, services, production and processing or in connection therewith, duty free, from bonded warehouses in the Domestic Tariff Area set up under the Export Import (E.X.I.M.) Policy.

• Few Additional Financial benefits provided by the scheme are as follow:

• 100% FDI investment permitted through automatic route

• Duty free imports/ domestic procurement permissible for Capital goods, Raw materials, Components and other inputs

• Central Sales Tax refundable

Eligibility

• MSMEs

• Minimal "Minimum Export Performance" norms i.e., US Dollar one million or three times C.I.F. Value of imported goods whichever is higher & Positive Net Foreign Exchange Earnings against Export Earnings to be achieved over a period of five years.

• Additional details are at: https://www.stpi.in/11026

•

https://www.stpi.in/11026

Membership Procedures• In order to become a certified member unit under STP

scheme, approval from the competent authority i.e.

Director, STPI-Mumbai is required. Following documents

are required for obtaining approval.

• Gist of application

• Application in triplicate

• Project report

• Board resolution

• Memorandum or Articles of association

• Export order / contract or MOU

• List of Directors

• Importer - Exporter code number

• Proof of STP location premises ( e.g. Leave and licence)

• Valid data communication proof (e.g. Receipt of payment,

service acceptance letter)

BTP

• Bio Technology Park:

• Specialsed Indusrial Parks in the area of Bio Technology .

• Financial and Logistic support to new entrepreneurs in the

area.

• Popular in the states: Tamil nadu, Andhra Pradesh,Kerala,

Karnataka,Punjab,Maharashtra.Gujarat, UP.

Benefits

• NFE benefit: BTP units get this benefit.

• Tax holiday: 10 years

• DTA sale: Domestic Tariff Area to BTP .

• Inter unit transfer of capital goods with permission of Development Commissioner.

• Foreign Capital Investment: In BTP by foreign firms up to 100% are allowed.

• Sale of unutilised material.

• Convergence and merger to EOU.

• Single window clearance

STP

• Software Technology Park: 1991

• 100% Export Oriented Scheme.

• Development of exports of computer software.

• Any Indian Company/Subsidy of Foreign Company/a

branch of it can become STP

Benefits of STP

• Duty free imports.

• Duty free DTA (Domestic Tariff Area) purchases

• Import of second hand capital goods.

• Deemed Export benefits.

• NFE benefit: STP units get this benefit.

• Tax holiday: 10 years

Benefits of STP

• DTA sale: Domestic Tariff Area to STP .

• Inter unit transfer of capital goods with permission of

Development Commissioner.

• Foreign Capital Investment: In STP by foreign firms up to

100% are allowed.

• Sale of un utilised material.

• Convergence and merger to EOU.

• Single window clearance

SEZ

• Special Economic Zone.

• India was one of the first in Asia to recognize the effectiveness

of the Export Processing Zone (EPZ) model in promoting

exports, with Asia's first EPZ set up in Kandla in 1965.

• The Special Economic Zone (SEZ) policy in India first came

into inception on April 1, 2000. The prime objective was to

enhance foreign investment and provide an internationally

competitive and hassle free environment for exports.

• The idea was to promote exports from the country and realising

the need that level playing field must be made available to the

domestic enterprises and manufacturers to be competitive

globally.

SEZ

• A special economic zone (SEZ) is an area in which the

business and trade laws are different from the rest of the

country.

• located within a country's national borders, and their aims

include increased trade balance, employment, increased

investment, job creation and effective administration.

• To encourage businesses to set up in the zone, financial

policies are introduced. Such as investing, taxation, trading,

quotas, customs and labour regulations.

Benefits/incentives to SEZ

• Duty free imports

• Duty free purchase from DTA

• Sales in home market

• FDI

• Tax benefit

• Customs and excise benefits

• Repatriation of profits

• Extention in credit period

• No std. input output norms

• No norms of export obligation.

• Sale in domestic tariff area with full customs duty.

• Allowed to manufacture items reserved for SSI

EOU

• Export Oriented Units

• 100% EOU scheme Introduced in 1981

• Engaged in manufacturing, service,repairing,re

engineering, agriculture, horticulture.

• Units having investments not less than rs50 lakhs and

above in P and M are considered under EOU.

EOU-Objectives

• To increase exports,

• To earn foreign exchange to the country,

• To transfer of latest technologies

• To stimulate direct foreign investment

• To generate additional employment.

Major Sectors in EOUs:

• GRANITE

• TEXTILES / GARMENTS

• FOOD PROCESSING

• CHEMICALS

• COMPUTER SOFTWARE

• COFFEE

• PHARMACEUTICALS

• GEM & JEWELLERY

• ENGINEERING GOODS

• ELECTRICAL & ELECTRONICS

• AQUA & PEARL CULTURE

Benefits of EOU

• 100% FDI allowed.

• Banks—prime lending

• Longer credit period to overseas buyers by EOU.

• Central excise exemption

• DBK

EOU-Benefits

• Tax holiday for 10 years.

• Incentives under MAI.

• Duty free imports

• Rejects may be sold in DTA

AEZ

• In 2001.

• Agricultural Export Zone

• Specific area for agri. based processing industries.

• To promote exports of agri. Products.

• 60 AEZ for 40 products.

• e.g. Grapes of Nashik, oranges of Nagpur

Questions• Highlights of 2015-20 FTP

• Write a note on Negative list of exports.

• Explain the role of DGFT

• Write a note on Town of excellence

• Write a note on STP/EHTP/BTP

• What is SEZ . What are its objectives and benefits

• Write a note on EOU

• Write a note on AEZ