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Friday, August 28, 2009

Understand New FTP 2009 – introduction of towns for export excellence,diamond bourses,EDI & more technology benefits apart from increase in duty scrips and extension of time limits

The New FTP Policy is released and shall come into force w.e.f. 27th August, 2009.  Kindly note, FTP is a Export Import (EXIM) policy published by Director General of Foreign Trade (DGFT)  under Ministry of Commerce under the powers of Foreign Trade (Development & Regulation) Act, 1992.  FTP is published for every 5 years.

Source : Foreign Trade Policy 2009-2014 & Foreign Trade Procedures 2009-2014 [Handbook of Procedures (Volume 1) & Appendices]

Erstwhile foreign trade policy (FTP) 2004-2009 had set two objectives, namely,

(i) to double our percentage share of global merchandize trade within 5 years and (ii) use trade expansion as an effective instrument of economic growth and employment generation.

Understand the basics of Policy from WTO - FTP - Understand this way ....

FOREIGN TRADE POLICY [FTP] 2009 – 2014

Understand the basic amendments,

  • To make the environment conducive for foreign trade and it was decided to continue with the DEPB Scheme upto December 2010 and income tax benefits.
  • Further under Section 10A for IT industry (STPI) and under Section 10B of Income Tax Act for 100% export oriented units for one additional year till 31st March 2011.
  • To encourage value addition in our manufactured exports and towards this end, have stipulated a minimum 15% value addition on imported inputs under advance authorization scheme.
  • The Government seeks to promote Brand India through 6 or more ‘Made in India’ shows to be organized across the world every year.
  • Technological upgradation of exports is sought to be achieved by promoting imports of capital goods for certain sectors under EPCG at 0% duty.  Additional Duty Credit Scrips shall be given to Status Holders @ 1% of the FOB value of past exports.  The duty credit scrips can be used for procurement of capital goods with Actual User condition.  This Scheme will be available for engineering & electronic products, basic chemicals & pharmaceuticals, apparels & textiles, plastics, handicrafts, chemicals & allied products and leather & leather products (subject to exclusions of current beneficiaries under Technological Upgradation Fund Schemes (TUFS), administered by Ministry of Textiles and beneficiaries of Status Holder Incentive Scheme in that particular year). The scheme shall be in operation till 31.3.2011.
  • For upgradation of export sector infrastructure, ‘Towns of Export Excellence’ and units located therein would be granted additional focused support and incentives.  For instance, Jaipur, Srinagar and Anantnag have been recognised as ‘Towns of Export Excellence’ for handicrafts; Kanpur, Dewas and Ambur have been recognised as ‘Towns of Export Excellence’ for leather products; and Malihabad
    for horticultural products.
  • To enable support to Indian industry and exporters, especially the Micro Small & Medium Enterprises, in availing their rights through trade remedy instruments under the WTO framework, we propose to set up a Directorate of Trade Remedy Measures.
  • In order to reduce the transaction cost and institutional bottlenecks, the e-trade project would be implemented in a time bound manner to bring all stake holders on a common platform.  Additional ports/locations would be enabled on the Electronic Data Interchange (EDI) over the next few years.
  • To further EDI initiatives, Export Promotion Councils/Commodity Boards have been advised to issue RCMC through a web based online system. It is expected that issuance of RCMC would become EDI enabled before the end of 2009. 
  • An Inter-Ministerial Committee has been established to serve as a single window mechanism for resolution of trade related grievances.
  • In an endeavour to make India a diamond international trading hub, it is planned to establish “Diamond Bourse(s)”.

Understand more highlights from Highlights of Foreign Trade Policy

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