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Advantage
Exports: India's
Foreign Trade Policy 2004-09
Commerce
and Industry minister Mr. Kamal Nath announced on April 8, 2005
the Annual Supplement 2005 ("Supplement") to the five-year
foreign trade policy for 2004-09. By announcing the minister aims
to generate employment in the country from the export sector and
seeks to provide a greater role for imports as a tool of economic
activity.
The
important proposals in the Supplement are as follows:
Advance
License Scheme: This scheme, which was available only to status
holders, shall now be extended to all categories of exporters
having a past track record. Further, in order to simplify the
scheme, three categories of advance licences shall be merged
into a single category. Bank Guarantee:
The quantum of bank guarantee for 'other manufacturers' and
'established service providers' shall be reduced to 15 per cent.
Commodity
Cess: In order to reduce the burden of indirect taxes, the cess
levied on export of all agricultural and plantation commodities
levied under various Commodity Board Acts shall be abolished.
Duty-free
Replenishment Certificate (DFRC): The list of sensitive items
restricted for imports under the DFRC shall be reduced to eight
items. Export
Promotion Capital Goods (EPCG) Scheme: In order to accelerate
performance, exporters who complete 75 per cent of their export
obligation within 4 years (as compared to fulfilling 100 per
cent with 8 years as per the conditions of the scheme) shall
be exempt from the balance export obligation. The scheme also
provides for added benefits for the agriculture sector. Export
Oriented Units (EOUs): The de-bonding norms for EOUs shall be
simplified with a move to self-assessment of liability. EOUs
can claim income-tax exemption within a year from the date of
exports. Gems and
Jewellery Export: Entitlement of duty free imports of samples
of gems and jewellery shall be enhanced to INR 300,000. Inter-state
Trade Council: In order to facilitate coordination between the
various states and the center o policy issues and boost international
trade, the Supplement has announced setting up of an inter-state
trade council. Served
from India Scheme: Goods imported under this scheme shall be
transferable within group companies and managed hotels, which
would help them in bulk sourcing and better utilization of entitlement.
Target
Plus Scheme: This scheme shall be made operational, making the
exporters who have a minimum turnover of INR 100 million eligible
for duty credit.
The above
proposals are in addition to the procedural simplifications announced
in the Supplement.
With these
measures, the commerce and industry ministry hopes to achieve
a 15 per cent increase in the export target to US$92 billion for
the current year (as compared to the year 2004 where the exports
touched US$ 80 billion) and to make India as a preferred destination
of manufacturing outsourcing.
Source:
Business
Standard, weekend edition dated April 9/10, 2005
You
can direct your queries or comments to Vikram
Shroff and Kishore
Joshi
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