HIGHLIGHTS OF ANNUAL SUPPLEMENT 2012-13
TO
FOREIGN TRADE POLICY 2009 -14
ANNOUNCED BY
MINISTER FOR COMMERCE, INDUSTRY & TEXTILES
SHRI ANAND SHARMA
On Tuesday, the 5th June 2012
HIGHLIGHTS OF ANNUAL SUPPLEMENT TO FTP 2009 -14
ANNOUNCED BY
MINISTER FOR COMMERCE, INDUSTRY & TEXTILES
SHRI ANAND SHARMA
On 5th June 2012
2 % INTEREST SUBVENTION SCHEME: Continuation and Expansion
- Two per cent Interest Subvention Scheme was available only to Handlooms,
Handicrafts, Carpets and SMEs till 31st March 2012. Now this would
be continued till 31st March 2013. It is also being extended to labour intensive
sectors, namely, Toys, Sports Goods, Processed Agricultural Products and
Ready-Made Garments, in addition to four sectors benefitting from
the scheme earlier.
TECHNOLOGICAL UPGRADATION / EPCG SCHEME
- Zero Duty EPCG Scheme had come to an end on 31st of March 2012. For
continued technological up-gradation of export sectors, this Scheme
has now been extended up to 31st March 2013. There is no change
in the coverage of the sectors benefitting from this scheme.
- Though the coverage of the sectors remains unchanged, scope
of Zero Duty EPCG Scheme has been enlarged. At present, Zero Duty
EPCG Scheme is not available to units that are availing the benefits of
Technology Up-gradation Fund Scheme (TUFS). Henceforth, even if the benefit
of TUFS has been availed, additionally the Zero Duty EPCG Authorisation
can be availed for another line of business by the same applicant. Further,
if it is the same line of business, Zero Duty EPCG Scheme could still be
availed if the benefits of TUFS already availed are surrendered/refunded
with applicable interest.
- Upto 31st March 2012, the benefit of Zero Duty EPCG Scheme was not available
to such applicants who would have availed benefit of Status Holder Incentive
Scrip (SHIS). It is now decided that if such SHIS benefit already availed
is surrendered subsequently with applicable interest to the concerned RA,
and then the benefit of Zero Duty EPCG Scheme would be extended.
- Introduction of A new Post-Export EPCG Scheme: Exporters
if they choose to, may import Capital Goods on payment of duty in cash and
subsequently receive duty credit scrip on completion of export obligation.
Thus there would be no duty remission / duty exemption at the time of import
of the Capital Good (CG). Applicant will have to inform the Regional Office
of DGFT (RA) about the import of CG and based on which RA will fix export
obligation. Since the duties have been paid upfront at the time of import
of CG, the EO would be 85 % of normal EO. On the basis of export performance,
a Duty Credit Scrip will be issued subsequently, by RA, in proportion to
export obligation so fixed. This would obviate the monitoring and reporting
requirements, as the scheme would be self-monitored. Reduced transaction
cost coupled with comparatively reduced EO would make this scheme attractive.
- Under the EPCG Scheme, at present, the condition of maintenance of average
level of exports is not applicable to some sectors, namely, Handicrafts,
Handlooms, Cottage Sector, Tiny Sector, Agriculture, Aquaculture (including
fisheries), Horticulture, Pisciculture, Viticulture, Poultry and Sericulture.
Three new sectors are being added to this list, namely,
Carpet, Coir and Jute. This would provide substantial relief
to these labour intensive industries, which find it difficult to maintain
the average export obligation.
- Presently under EPCG scheme, catalysts are allowed only once for the
initial charge. It has been decided to permit a second charge of the catalysts.
- To facilitate setting up of Common Service Centres located in the town
of export excellence (TEE), a Common Service Provider (CSP) under EPCG Scheme
will henceforth be permitted to give a single Bank Guarantee (BG).
The quantum of BG will be equivalent to the amount of duty foregone. It
is open to CSP to provide the BG for full amount by himself or on a sharing
basis along with the users of the common service.
SUPPORT FOR EXPORT OF PRODUCTS FROM NORTH EASTERN REGION.
- To promote manufacturing activity and employment in the North Eastern
Region of the country, export obligation under the EPCG Scheme shall be
25% of the normal export obligation. This would be applicable
to the States of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram,
Nagaland, Tripura, and Sikkim.
- Export of specified products through notified Land Customs Stations
of North Eastern Region shall be provided additional incentive to
the extent of 1% of FOB value of exports. This benefit shall be
in addition to any other benefit that may be available under Foreign Trade
Policy in respect of these exports.
SUPPORT FOR EXPORT OF GREEN TECHNOLOGY PRODUCTS
- To promote exports of 16 identified green technology products, export
obligation for manufacturing of these products, under the EPCG Scheme, is
being reduced to 75% of the normal export obligation.
- The 16 products are: Equipment for Solar Energy decentralized and grid
connected products, Bio-Mass Gassifier, Bio-Mass / Waste Boiler, Vapour
Absorption Chillers, Waste Heat Boiler, Waste Heat Recovery Units, Unfired
Heat Recovery Steam Generators, Wind Turbine, Solar Cells, Solar Collector
and Parts thereof, Water Treatment Plants, Wind Mill, Wind Turbine/Engine,
Other Generating Sets; wind powered, Electrically Operated Vehicles – Motor
Cars, Electrically Operated Vehicles – Lorries and Trucks, Electrically
Operated Vehicles – Motor Cycles / Mopeds.
SUPPORT FOR INFRASTRUCTURE FOR AGRICULTURE SECTOR
- Status holders exporting products under ITC (HS) Chapter 1 to Chapter
24 (both inclusive) are provided Duty Credit Scrip equivalent to 10% of
FOB value of agricultural products so exported. These scrips are issued
for import of Capital Goods and equipments for Cold Storage Units, Pack-houses
etc. Now these scrips will be eligible for import of 14 specified equipments
for setting up of Pack-houses.
- The 14 equipments are: Packing grading equipments for fruits and vegetables,
Equipments for ripening of fruits including ethylene generator, Adiabatic
humidifies for cold rooms, Gas sensor and controlled system covering CO2,
ethylene and oxygen levels, ethylene scrubbers, CO2 Scrubbers, Blast freezers
for IQF plants, Doors for gastight rooms, applications like CA, Banana/fruit
ripening, Nitrogen generators, Gas controlling systems for CA stores, Bulk
bins for CA stores, Reach stakers for cold stores and warehouses, Belt driven
conveyors for bulk handling of cargo, Gantry cranes, unloading, mechanized
loaders for bulk and break bulk cargo.
INCENTIVES FOR PROMOTING INVESTMENT IN LABOUR INTENSIVE SECTORS
- Status holders are issued Status Holders Incentive Scrip (SHIS) to import
Capital Goods for promoting investment in up-gradation of technology of
some specified labour intensive sectors like Leather, Textile & Jute, Handicrafts,
Engineering, Plastics and Basic Chemicals. It is now decided that up to
10% of the value of these scrips will be allowed to be utilized to import
components and spares of capital goods imported earlier. Such a dispensation
was not available earlier.
- At present these scrips are subject to Actual User Condition and are
not transferable. Since a status holder may or may not have manufacturing
facility, it is now decided to allow limited transferability of SHIS scrip.
However, such Transferee shall have to (a) be a status holder and (b) have
manufacturing facility.
ENCOURAGEMENT FOR MANUFACTURING SECTOR IN DOMESTIC MARKET
- The present Policy allows scrips under different schemes of Chapter
3 of Foreign Trade Policy, namely, Focus Product Scheme (FPS), Focus Market
Scheme (FMS), Vishesh Krishi and Gram Udyog Yojana (VKGUY) Scheme, Status
Holder Incentive Scrip (SHIS) Scheme, Market Linked Focused Product (MLFPS)
Scheme, Served From India Scheme (SFIS) and Agri. Infrastructure Incentive
Scrip (AIIS) Scheme, for import of goods as per conditions of these Schemes.
Now these scrips shall be permitted to be utilized for payment of Excise
Duty for domestic procurement. Earlier only scrips under SFIS were so permitted
for procurement of goods from domestic market. Now all scrips would be permitted
to source from domestic market so as to encourage manufacturing, value addition
and employment. This will be an important measure for import substitution
and will help in saving of foreign exchange in addition to creating additional
employment.
USE OF “DELIVERY AGAINST ACCEPTANCE (DA)” TERMS NOT TO BE ENCOURAGED FOR
EXPORT OF CARPETS / HANDICRAFTS.
- Export of Handicraft items and export of Hand-Made Woollen Carpets including
other floor coverings like Woolen Durries, Druggets, Gabbas, Namdhas and
Shaggy shall not be allowed on the basis of “Delivery against Acceptance
(DA)” terms, unless they are covered by Bank Guarantee or ECGC guarantee.
This would significantly protect the business and financial interests of
small exporters.
SIMPLIFICATION OF PROCEDURES
- Import under Advance Authorisation (AA) will henceforth be permitted
at any of the EDI ports, irrespective of EDI port in which the AA has been
registered. There would be no requirement of Transfer Release Advice (TRA).
This would facilitate imports under AA and would significantly bring down
transaction costs of the exporters.
- Exports shipments from Delhi & Mumbai through Post, through Courier
or through e-Commerce shall be entitled for export benefits under FTP. An
Inter-Ministerial Task Force constituted by the Ministry of Finance would
expeditiously look into various aspects to the feasibility of enabling shipments
through all postal locations.
- Exporters will be henceforth permitted to give single revolving Bank
Guarantee for different transactions.
VISAKHAPATNAM AIRPORT RECOGNISED UNDER EXPORT PROMOTION SCHEMES
- Visakhapatnam Airport has been identified as a new Port for the purpose
of benefits under Export Promotion Schemes.
DUTY FREE IMPORT OF EMBELLISHMENTS FOR EXPORTS OF SYNTHETIC MADE-UPS
- At present duty free import of embellishments is allowed against exports
of Handloom made-ups, Cotton made-ups and Polyester made-ups. This facility
will now be extended to the export of Synthetic made-ups.
NEW “e-BRC” INITIATIVE: A MAJOR EDI INITIATIVE
- An extremely challenging and significant EDI initiative, “e-BRC” has
been launched by DGFT. “e-BRC” would herald electronic transmission of Foreign
Exchange Realization from the respective Banks to the DGFT’s server on a
daily basis. Exporter will not be required to make any request to bank for
issuance of Bank Export and Realization Certificate (BRC). This will establish
a seamless EDI connectivity amongst DGFT, Banks and Exporters. “e-BRC” would
facilitate early settlement and release of FTP incentives / entitlements.
This is a significant step to reduce transaction cost to the exporters.
SEARCH BASED “ITC (HS)” ON DGFT WEBSITE
- DGFT has published a new, updated, ITC (HS) classification of Export
and Import items. On the DGFT website (http://dgft.gov.in), a facility has
been provided to search / enquire about the current Import Policy of an
item by entering either ITC (HS) Code of that item or brief description
of that item. This would be of major help to trade and industry as well
to academicians and researchers.
RE-WRITING OF FTP/HBP TO MAKE IT MORE USER-FRIENDLY
- DGFT has undertaken a through revision of Foreign Trade Policy / Handbook
of Procedures, Vol.1 to make it more user friendly. Substantial efforts
have been made to remove ambiguities in language, delete repetitions and harmonise the text with amendments to policy and new policy announcements.
MARKET & PRODUCT DIVERSIFICATION
- 7 new markets are being added to Focus Market Scheme (FMS). These countries
are Algeria, Aruba, Austria, Cambodia, Myanmar, Netherland Antilles, and
Ukraine
- 7 new markets are being added to the Special Focus Market Scheme (Special
FMS). These countries are Belize, Chile, El Salvador, Guatemala, Honduras,
Morocco, and Uruguay.
- 46 new items are being added to Market Linked Focus Product Scheme (MLFPS).
This would have the effect of including 12 new markets for the first time.
- MLFPS is being extended till 31st March 2013 for export to USA and EU
in respect of items falling in Chapter 61 and Chapter 62.
- 110 new items are being added to the Focus Product Scheme (FPS) list.
- 2 new items are being added to VKGUY. These are roasted cashew kernel,
and protein concentrates & textured protein substances.
TOWNS OF EXPORT EXCELLENCE
- 3 new towns are being declared as Towns of Export Excellence (TEE).
These are Ahmedabad (Textiles), Kolhapur (Textiles), and Shaharanpur (Handicrafts)