S.R.T.E.P.C
HIGHLIGHTS OF FOREIGN TRADE POLICY 2009-2014
 
Higher Support for Market and Product Diversification
 
(1) 26 new markets have been added under Focus Market Scheme. These include 16 new markets in Latin America and 10 in Asia-Oceania.
   
(2) The incentive available under Focus Market Scheme (FMS) has been raised from 2.5% to 3%.
   
(3) The incentive available under Focus Product Scheme (FPS) has been raised from 1.25% to 2%.
   
(4) A large number of products from various sectors have been included for benefits under FPS. These include Technical Textiles.
   
(5) Market Linked Focus Product Scheme (MLFPS) has been greatly expanded by inclusion of products classified under as many as 153 ITC(HS) Codes at 4 digit level. Some major products include Synthetic textile fabrics among others. Benefits to these products will be provided, if exports are made to 13 identified markets (Algeria, Egypt, Kenya, Nigeria, South Africa, Tanzania, Brazil, Mexico, Ukraine, Vietnam, Cambodia, Australia and New Zealand).
   
(6) A common simplified application form has been introduced for taking benefits under FPS, FMS and MLFPS.
   
(7) Higher allocation for Market Development Assistance (MDA) and Market Access Initiative (MAI) schemes is being provided.
   
Technological Upgradation
   
(8) To aid technological upgradation of the export sector, EPCG Scheme at Zero Duty has been introduced. This Scheme will be available for apparels & textiles 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.
   
EPCG Scheme Relaxations
   
(9) To increase the life of existing plant and machinery, export obligation on import of spares, moulds etc. under EPCG Scheme has been reduced to 50% of the normal specific export obligation.
   
(10) Taking into account the decline in exports, the facility of Re-fixation of Annual Average Export Obligation for a particular financial year in which there is decline in exports from the country, has been extended for the 5 year Policy period 2009-14.
   
Status Holders
   
(11) To accelerate exports and encourage technological upgradation, 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 facility shall be available for the textiles sectors (subject to exclusions of current beneficiaries under Technological Upgradation Fund Schemes (TUFS)]. This facility shall be available upto 31.3.2011.
   
DEPB Scheme
   
(12) The Duty Entitlement Passbook (DEPB) Scheme is extended beyond 31-12-2009 till 31.12.2010.
   
(13) DEPB rate shall also include factoring of custom duty component on fuel where fuel is allowed as a consumable in Standard Input-Output Norms.
   
Interest Rate subvention
   
(14) Interest subvention of 2% for pre-shipment credit for 7 specified sectors has been extended till 31.3.2010.
Income Tax Exemption
   
(15) Income Tax exemption to 100% EOUs has been extended for the financial year 2010-11 .
ECGC cover
   
(16) The adjustment assistance scheme initiated in December, 2008 to provide enhanced ECGC cover at 95%, to the adversely affected sectors, is continued till March, 2010.
   
Handloom Sector
   
(17) To simplify claims under FPS, requirement of ‘Handloom Mark’ for availing benefits under FPS has been removed.
   
EOUs
   
(18) EOUs have been allowed to sell products manufactured by them in DTA upto a limit of 90% instead of existing 75%, without changing the criteria of ‘similar goods’, within the overall entitlement of 50% for DTA sale.
   
(19) EOUs will now be allowed to procure finished goods for consolidation along with their manufactured goods, subject to certain safeguards.
   
(20) During this period of downturn, Board of Approvals (BOA) to consider, extension of block period by one year for calculation of Net Foreign Exchange earning of EOUs.
   
(21) EOUs will now be allowed CENVAT Credit facility for the component of SAD and Education Cess on DTA sale.
   
Advance Authorisation Scheme
   
(22) A minimum 15% value addition on imported inputs under Advance Authorization Scheme has been prescribed.
   
Flexibility provided to exporters
   
(23) Payment of customs duty for Export Obligation (EO) shortfall under Advance Authorisation / DFIA / EPCG Authorisation has been allowed by way of debit of Duty Credit scrips. Earlier the payment was allowed in cash only.
   
(24) Import of restricted items, as replenishment, shall now be allowed against transferred DFIAs, in line with the erstwhile DFRC scheme.
   
Waiver of Incentives Recovery, On RBI Specific Write off
   
(25) In cases, where RBI specifically writes off the export proceeds realization, the incentives under the FTP shall now not be recovered from the exporters subject to certain conditions.
   
Simplification of Procedures
   
(26) To facilitate duty free import of samples by exporters, number of samples/pieces has been increased from the existing 15 to 50. Customs clearance of such samples shall be based on declarations given by the importers with regard to the limit of value and quantity of samples.
   
(27) To allow exemption for up to two stages from payment of excise duty in lieu of refund, in case of supply to an advance authorisation holder (against invalidation letter) by the domestic intermediate manufacturer. It would allow exemption for supplies made to a manufacturer, if such manufacturer in turn supplies the products to an ultimate exporter. At present, exemption is allowed upto one stage only.
   
(28) Greater flexibility has been permitted to allow conversion of Shipping Bills from one Export Promotion scheme to other scheme. Customs shall now permit this conversion within three months, instead of the present limited period of only one month.
   
(29) To reduce transaction costs, dispatch of imported goods directly from the Port to the site has been allowed under Advance Authorisation scheme for deemed supplies. At present, the duty free imported goods could be taken only to the manufacturing unit of the authorisation holder or its supporting manufacturer.
   
(30) Disposal of manufacturing wastes / scrap will now be allowed after payment of applicable excise duty, even before fulfillment of export obligation under Advance Authorisation and EPCG Scheme.
   
(31) The application and redemption forms under EPCG scheme have been simplified.
   
Reduction of Transaction Costs
   
(32) No fee shall now be charged for grant of incentives under the Schemes in Chapter 3 of FTP. Further, for all other Authorisations/ licence applications, maximum applicable fee is being reduced to Rs. 100,000 from the existing Rs 1,50,000 (for manual applications) and Rs. 50,000 from the existing Rs.75,000 (for EDI applications).
   
(33) 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.
   
(34) Electronic Message Exchange between Customs and DGFT in respect of incentive schemes under Chapter 3 will become operational by 31.12.2009. This will obviate the need for verification of scrips by Customs facilitating faster clearances.
   
(35) For EDI ports, with effect from December ’09, double verification of shipping bills by customs for any of the DGFT schemes shall be dispensed with.
   
(36) In cases, where the earlier authorization has been cancelled and a new authorization has been issued in lieu of the earlier authorization, application fee paid already for the cancelled authorisation will now be adjusted against the application fee for the new authorisation subject to payment of minimum fee of Rs. 200.
   
(37) An Inter Ministerial Committee will be formed to redress/ resolve problems/issues of exporters.
   
Directorate of Trade Remedy Measures
   
(38) To enable support to Indian industry and exporters, especially the MSMEs, in availing their rights through trade remedy instruments, a Directorate of Trade Remedy Measures shall be set up.