TRADE POLICIES & REGULATIONS

Foreign Trade Policy (2004-2009)

India’s foreign trade is governed on the basis of foreign trade policies from time to time. India is making extensive efforts to enhance the trade opportunities to improve it competitiveness in the world trade scenario. And for the first time a comprehensive Foreign Trade Policy has been developed to improve the trading system.  The objective of the new Foreign Trade Policy is the overall development of India’s foreign trade. 
Two fold objective of foreign trade policy 2004-2009

• Double India’s percentage share of global merchandise trade by 2009; and
• Act as an effective instrument of economic growth by giving a thrust to employment generation, especially in semi-urban and rural areas. 

 And to achieve this goal following strategies are set forth

• Unshackling of controls;
• Creating an atmosphere of trust and transparency;
• Simplifying procedures and bringing down transaction costs;
• Neutralizing incidence of all levies and duties on inputs used in export products, based on the fundamental principle that duties and levies should not be exported.
• Identify the areas to facilitate develop India as a global hub for manufacturing, trading and services. 
• Sectors with significant export prospects and potential for employment generation in semi-urban and rural areas have been identified as thrust sectors, and specific sectoral strategies have been prepared.  

Higlights of trade policy 2004-2009

Export Promotion Schemes: 

Schemes for Agriculture

Vishesh Krishi Upaj Yojana

This is a Special Initiative for Agriculture included in the new policy

• Vishesh Krishi Upaj Yojanahas been introduced to boost exports of fruits, vegetables, flowers, minor forest produce and their value added products.  
• Duty free import of capital goods under Export promotion of Capital Goods (EPCG) scheme. 
• Capital goods imported under EPCG for agriculture permitted to be installed anywhere in the Agri Export Zone. 
• Assistance to states for Infrastructure Development for Exports (ASIDE) and these funds are to be utilized for development for Agri Export Zones also.  
• Import of seeds, bulbs, tubers and planting material has been liberalized.  
• Export of plant portions, derivatives and extracts has been liberalized with a view to promote export of medicinal plants and herbal products. 

Apart from schemes for Agriculture there are many other special schemes for

• gems and Jewellery
• Handlooms and Handicrafts
• Leather and footwears

Target Plus

A new scheme to accelerate growth of exports called ‘Target Plus’ has been introduced
The new duty free credit based on incremental exports for those exporters who have achieved a quantum growth in exports. This is based on a target fixed for each year (Target fixed for 2004-05 is 16%, the lower limit of performance for qualifying for rewards is pegged at 20% for the current year). 
Rewards will be granted based on a tiered approach.  For incremental growth of over 20%, 25% and 100%, the duty free credits would be 5%, 10% and 15% of Freight On Board  (FOB) value of incremental exports. 

‘Served from India’ Scheme: 

Under this scheme Individual service providers who earn foreign exchange of at least Rs.5 lakhs, and other service providers who earn foreign exchange of at least Rs.10 lakhs will be eligible for a duty credit entitlement of 10% of total foreign exchange earned by them.   
In the case of stand-alone restaurants, the entitlement shall be 20%, whereas in the case of hotels, it shall be 5%. 
Hotels and Restaurants can use their duty credit entitlement for import of food items and alcoholic beverages. 

Free Trade and Warehousing Zone

A new provides for Free Trade and Warehousing Zone to facilitate the import and export of goods and services with freedom to carry out trade transactions in free currency. 

Services Export Promotion Council

An exclusive Services Export Promotion Council shall be set up in order to map opportunities for key services in key markets, and develop strategic market access programmes, including brand building, in co-ordination with sectoral players and recognized nodal bodies of the services industry. 

Common Facilities Centre

Government shall promote the establishment of Common Facility Centres for use by home-based service providers, particularly in areas like Engineering & Architectural design, Multi-media operations, software developers etc., in State and District-level towns, to draw in a vast multitude of home-based professionals into the services export arena. 

Procedural Simplification & Rationalisation Measures

There new policy has introduced simplified procedures and restrictions to support trade

Last Updated On: 04-01-2008