special focus & initiative

8/9/2019 Special Focus & Initiative

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Special Focus & initiative in foreign trade Policy 2004-09Highlights of Foreign Trade Policy

Strategy

It is for the first time that a comprehensive Foreign Trade Policy is being notified. TheForeign Trade Policy takes an integrated view of the overall development of India's foreigntrade.

The objective of the Foreign Trade Policy is two-fold:

(i) to double India's percentage share of global merchandise trade by 2009; and

(ii) to act as an effective instrument of economic growth by giving a thrust to employmentgeneration, especially in semi-urban and rural areas.

The key strategies are:

(i) Unshackling of controls;

(ii) Creating an atmosphere of trust and transparency;

(iii) Simplifying procedures and bringing down transaction costs;

(iv) Adopting the fundamental principle that duties and levies should not be exported;

(v) Identifying and nurturing different special focus areas to facilitate development of Indiaas a global hub for manufacturing, trading and services.

Special focus initiatives

Sectors with significant export prospects coupled with potential for employment generationin semi-urban and rural areas have been identified as thrust sectors, and specific sectoralstrategies have been prepared.

Further sectoral initiatives in other sectors will be announced from time to time. For thepresent, Special Focus Initiatives have been prepared for agriculture, handicrafts,handlooms, gems & jewellery and leather & footwear sectors.

The threshold limit of designated `Towns of Export Excellence' is reduced from Rs 1,000crore to Rs 250 crore in these thrust sectors.

Package for agriculture

The Special Focus Initiative for Agriculture includes:


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A new scheme called Vishesh Krishi Upaj Yojana has been introduced to boost exports offruits, vegetables, flowers, minor forest produce and their value added products.

Duty free import of capital goods under EPCG scheme.

Capital goods imported under EPCG for agriculture permitted to be installed anywhere inthe agri export zone.

ASIDE funds to be utilized for development for Agri Export Zones also.

Import of seeds, bulbs, tubers and planting material has been liberalised.

Export of plant portions, derivatives and extracts has been liberalized with a view topromoting export of medicinal plants and herbal products.

Gems & jewellery

Duty free import of consumables for metals other than gold and platinum allowed up to 2%of FOB value of exports.

Duty free re-import entitlement for rejected jewellery allowed up to 2% of FOB value ofexports.

Duty free import of commercial samples of jewellery increased to Rs 1 lakh.

Import of gold of 18 carat and above shall be allowed under the replenishment scheme.

Handlooms & handicrafts

Duty free import of trimmings and embellishments for handlooms & handicrafts sectorsincreased to 5% of FOB value of exports.

Import of trimmings and embellishments and samples shall be exempt from CVD.

Handicraft Export Promotion Council authorised to import trimmings, embellishments andsamples for small manufacturers.

A new handicraft special economic zone shall be established.

Leather & footwear

Duty free entitlements of import trimmings, embellishments and footwear components forleather industry increased to 3% of FOB value of exports.

Duty free import of specified items for leather sector increased to 5% of FOB value ofexports. Machinery and equipment for effluent treatment plants for leather industry shallbe exempt from customs duty.


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Export promotion schemes

Target Plus:

A new scheme to accelerate growth of exports called `Target Plus' has been introduced.

Exporters who have achieved a quantum growth in exports would be entitled to duty freecredit based on incremental exports substantially higher than the general actual exporttarget fixed. (Since the target fixed for 2004-05 is 16%, the lower limit of performance forqualifying 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 FOB value ofincremental exports.

Vishesh Krishi Upaj Yojana:

Another new scheme called Vishesh Krishi Upaj Yojana (Special agricultural producescheme) has been introduced to boost exports of fruits, vegetables, flowers, minor forestproduce and their value added products. Export of these products shall qualify for duty freecredit entitlement equivalent to 5% of FOB value of exports. The entitlement is freelytransferable and can be used for import of a variety of inputs and goods.

`Served from India' Scheme:

To accelerate growth in export of services so as to create a powerful and unique `Servedfrom India' brand instantly recognized and respected the world over, the earlier DFECscheme for services has been revamped and recast into the `Served from India' scheme.

Individual service providers who earn foreign exchange of at least Rs 5 lakh, and otherservice providers who earn foreign exchange of at least Rs 10 lakh will be eligible for aduty 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 caseof hotels, it shall be 5%.

Hotels and restaurants can use their duty credit entitlement for import of food items andalcoholic beverages.

EPCG:

(i) Additional flexibility for fulfillment of export obligation under EPCG scheme in order toreduce difficulties of exporters of goods and services.

(ii) Technological upgradation under EPCG scheme has been facilitated and incentivised.

(iii) Transfer of capital goods to group companies and managed hotels now permittedunder EPCG.


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(iv) In case of movable capital goods in the service sector, the requirement of installationcertificate from Central Excise has been done away with.

(v) Export obligation for specified projects shall be calculated based on concessional dutypermitted to them. This would improve the viability of such projects.

DFRC :

Import of fuel under DFRC entitlement shall be allowed to be transferred to marketingagencies authorized by the Ministry of Petroleum and Natural Gas.

DEPB:

The DEPB scheme would be continued until replaced by a new scheme to be drawn up inconsultation with exporters.

New status holder categorisation

A new rationalized scheme of categorization of status holders as Star Export Houses hasbeen introduced as under:

Category - Total performance over three years

One Star Export House - Rs 15 crore

Two Star Export House - Rs 100 crore

Three Star Export House - Rs 500 crore

Four Star Export House - Rs 1,500 crore

Five Star Export House - Rs 5,000 crore

Star Export Houses shall be eligible for a number of privileges including fast-trackclearance procedures, exemption from furnishing of bank guarantee, eligibility forconsideration under target plus scheme etc.

EOUs

EOUs shall be exempted from service tax in proportion to their exported goods and

services.

EOUs shall be permitted to retain 100% of export earnings in EEFC accounts.

Income tax benefits on plant and machinery shall be extended to DTA units which convertto EOUs.

Import of capital goods shall be on self-certification basis for EOUs.


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For EOUs engaged in Textile & Garments manufacture leftover materials and fabrics up to2% of CIF value or quantity of import shall be allowed to be disposed of on payment ofduty on transaction value only.

Minimum investment criteria shall not apply to brass hardware and handmade jewelleryEOUs (this facility already exists for handicrafts, agriculture, floriculture, aquaculture,

animal husbandry, IT and services).

Free trade and warehousing zone

(i) A new scheme to establish Free Trade and Warehousing Zone has been introduced tocreate trade-related infrastructure to facilitate the import and export of goods and serviceswith freedom to carry out trade transactions in free currency. This is aimed at making Indiainto a global trading-hub.

(ii) FDI would be permitted up to 100% in the development and establishment of the zonesand their infrastructural facilities.

(iii) Each zone would have minimum outlay of Rs.100 crores and five lakh sq. mt. built uparea.

(iv) Units in the FTWZs would qualify for all other benefits as applicable for SEZ units.

Import of second- hand capital goods

Import of second-hand capital goods shall be permitted without any age restrictions.

Minimum depreciated value for plant and machinery to be re-located into India has beenreduced from Rs 50 crore to Rs 25 crore.

Services export promotion council

An exclusive Services Export Promotion Council shall be set up in order to mapopportunities for key services in key markets, and develop strategic market accessprogrammes, including brand building, in co-ordination with sectoral players andrecognised 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 theservices export arena.

Procedural simplification & rationalisation measures


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All exporters with minimum turnover of Rs.5 crores and good track record shall be exemptfrom furnishing bank guarantee in any of the schemes, so as to reduce their transactionalcosts.

All goods and services exported, including those from DTA units, shall be exempt fromservice tax.

Validity of all licences/entitlements issued under various schemes has been increased to auniform 24 months.

Number of returns and forms to be filed have been reduced. This process shall becontinued in consultation with Customs & Excise.

Enhanced delegation of powers to Zonal and Regional offices of DGFT for speedy and lesscumbersome disposal of matters.

Time bound introduction of Electronic Data Interface (EDI) for export transactions. 75% of

all export transactions to be on EDI within six months.

Pragati Maidan

In order to showcase our industrial and trade prowess to its best advantage and leverageexisting facilities, Pragati Maidan will be transformed into a world-class complex. Thereshall be state-of-the-art, environmentally-controlled,

visitor friendly exhibition areas and marts. A huge Convention Centre to accommodate10,000 delegates with flexible hall spaces, auditoria and meeting rooms with high-techequipment, as well as multi-level car parking for 9,000 vehicles will be developed withinthe envelope of Pragati Maidan.

Legal aid

Financial assistance would be provided to deserving exporters, on the recommendation ofExport Promotion Councils, for meeting the costs of legal expenses connected with trade-related matters.

Grievance redressal

A new mechanism for grievance redressal has been formulated and put into place by aGovernment resolution to facilitate speedy redressal of grievances of trade and industry.

Quality policy

DGFT shall be a business-driven, transparent, corporate oriented organization.

Exporters can file digitally signed applications and use Electronic Fund Transfer Mechanismfor paying application fees.


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All DGFT offices shall be connected via a central server making application processingfaster. DGFT HQ has obtained ISO 9000 certification by standardising and automatingprocedures.

Biotechnology parks

Biotechnology parks to be set up which would be granted all facilities of 100% EOUs.

Co-acceptance/ Avalisation introduced as equivalent to irrevocable letter of credit toprovide wider flexibility in financial instrument for export transaction.

Board of Trade

The Board of Trade shall be revamped and given a clear and dynamic role. An eminentperson or expert on trade policy shall be nominated as President of the Board of Trade,which shall have a Secretariat and separate Budget Head, and will be serviced by theDepartment of Commerce.

INDUSTRY & ECONOMY

OUTSOURCINGCar design outsourcing the next gold rushNEXT YEAR the US alone will see the launch of 50 new cars, and parts of these cars will bedesigned in India through outsourcing of engineering drawings. Carmakers in the US areincreasingly facing a major challenge in terms of designing more .

AWARDS & HONOURS

National Mineral Award

ECONOMYGrowth in tax revenues helps rein in fiscal deficitBOLSTERED by a 20.12 per cent growth in net tax revenues, the Centre has managed torein in its fiscal, revenue and primary deficit numbers so far during the current fiscal.During April-July 2004, the Centre's fiscal deficit the gap .

ENVIRONMENTCII-Kerala calls for conciliatory bid to tackle hazardous waste`Confrontation in any manner between the stakeholders will not solve environmental

concerns.

FERTILISERSCentre mulls reopening HFC's Durgapur unitWITH emerging prospects of coal-bed-methane, underground and surface coal gasificationprojects in the country's oldest coal mining in the State, the Centre is considering aproposal to re-open the closed fertiliser plant of Hindustan Fertiliser .


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FOREIGN TRADEFTA `rules of origin' notifiedTHE Finance Ministry on Tuesday notified the `interim rules of origin' for the early harvestscheme under the Indo-Thai Free Trade Agreement (FTA). The rules would come into forcefrom September .

HEALTHK&K Health in talks with banks for fitness financeK&K Health Care (P) Ltd, the Delhi-based fitness and healthcare equipment manufacturingand marketing company, is currently negotiating with banks and lending institutions forproviding finance to customers for the purchase of fitness equipment.

FitnessOne opens in Chennai todayFITNESSONE, a health and fitness club, will start functioning here from Wednesday. Spreadover 12,000 sq.ft. of air-conditioned space, it will offer a range of imported equipment,which are among the best that a gym can offer.

INFRASTRUCTURE

Cybercity Magarpatta gets best infrastructure awardCYBERCITY Magarpatta, a four million sq. ft. software technology park that is part of thesprawling 400-acre `Magarpatta city' township in Pune, has been awarded the first prize atthe Maharashtra IT Awards in the IT infrastructure category.

PETROLEUMHPCL stalls ONGC bid to buy out Mangalore Refinery stake Fears losing `strategicbusiness interest'OIL and Natural Gas Corporation's move to buy out Hindustan Petroleum Corporation Ltd's16.95 per cent stake in Mangalore Refinery and Petrochemicals Ltd is facing an obstacle.According to sources, HPCL has reportedly made a fresh .

Only way for IBP to survive is to merge with IOC: ChairmanTHE Chairman of IBP Co Ltd and Indian Oil Corporation Ltd, Mr M.S. Ramachandran, todaypresented a strong case in favour of the former's merger with the latter and said that wasthe only way to ensure the survival of IBP Co Ltd in the long.

IOC to boost capacity at Paradip refineryINDIAN Oil Corporation Ltd is firming up plans to augment the capacity of itspetrochemicals refinery project at Paradip and even embark upon the manufacture ofvalue-added petrochemical products there, according to Mr M.S. Ramachandran, Chairman

BPCL weighing merger of KRL with itselfBHARAT Petroleum Corporation Ltd is considering the possibility of merging its subsidiary

Kochi Refineries Ltd with itself. A merger with KRL will add the subsidiary's refining profitsto BPCL's balance sheet, according to senior officials.

POWERKSEB hopes to save Rs 800 cr this yearWITH the blessings of rain gods and effective water management, the Kerala StateElectricity Board (KSEB) could do without thermal power from last May. As a result, duringthe current water year (June-May), the Board will be making a saving.


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TEXTILES`Little for organised textile industry'THOUGH the sectoral initiatives as promised by the Commerce Ministry would go a longway in strengthening the export potential of the traditional sectors including the textiles,the Ministry has not specifically spelt out anything for the

WATERMaster plan to tap rainwater for irrigation in APTHE Andhra Pradesh Government is preparing a Master Plan to tap all of rainwater andutilise the same for irrigation. Announcing this at a press conference here on Tuesday, DrA. Chandra Sekhar, Minister for Minor Irrigation

EXIM POLICYService tax goes for all exporters Kamal Nath aims to double India's share of globaltrade by 2009EXPORTERS of all goods and services, including those from domestic tariff area (DTA),have now been exempted from service tax. Also exporters with minimum turnover of Rs 5crore and a sound track record have been exempted from furnishing bank

It is now `Served from India' schemeTHE Foreign Trade Policy 2004-2009, unveiled by the Commerce Minister, Mr Kamal Nath,has revamped and recast the earlier duty-free entitlement certificate (DFEC) scheme into`Served from India' scheme. The new scheme seeks to create a

Duty-free import of capital goods for agri unitsTHE new Foreign Trade Policy (FTP) has a few new initiatives for agri-exporters, includingallowing duty-free import of capital goods under the Export Promotion Capital Goods(EPCG) scheme and providing duty credit entitlement to horticulture .

Highlights of Foreign Trade Policy

It is for the first time that a comprehensive Foreign Trade Policy is being notified. TheForeign Trade Policy takes an integrated view of the overall development of India's foreigntrade. The objective of the Foreign Trade Policy.

Facilitation of exports will be the prime focus: DGFTTHE Foreign Trade Policy (2004-09) aims at augmenting the country's exports of bothgoods and services in order to ensure employment opportunities with export facilitationbeing the focus of the policy.

`Export target challenging, but achievable' New scheme soon to replace dutyentitlement passbook, says Kamal NathTHE Union Commerce and Industry Minister, Mr Kamal Nath, on Tuesday said that the goalof pushing up the country's merchandise exports to 1.5 per cent of world trade by 2009was challenging but not insurmountable.

Leather sector hails concessionsTHE $2-billion Indian leather export industry is upbeat about the relaxations offered in theimport norms on a slew of input items in the Foreign Trade Policy. According to industryplayers, the steps would lead to enhanced competitiveness.


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`Free warehousing zones to make India a trading hub'The Free Trade and Warehousing Zones proposed in the Foreign Trade Policy would makeIndia a veritable trading hub after Dubai which had emerged as the world's biggestwarehousing/trading centre, the Union Commerce and Industry Minister, Mr Kamal said

A shot in the arm for exports: India Inc

INDIA Inc has welcomed the Foreign Trade policy unveiled by the Union Minister ofCommerce and Industry, Mr Kamal Nath, by and large. Simultaneously, the industrychambers have expressed hope that they would find adequate representation.

Exporters, trade bodies welcome new policyVARIOUS exporters and trade bodies have welcomed the five-year Foreign Trade Policyannounced by the Commerce Ministry on Tuesday. Mr S.L. Deoras, Managing Director, TataInternational Ltd and co-chairman of the National Committee on Exports.

FAPCCI hails Foreign Trade PolicyTHE Federation of Andhra Pradesh Chambers of Commerce and Industry (FAPCCI) haswelcomed the Foreign Trade Policy announced by Mr Kamal Nath, Union Minister forCommerce and Industry, on Tuesday. "It is a well thought out holistic approach,"

RADIO/TVA CAS of status quo in ChennaiTHE conditional access system (CAS) is one-year-old in Chennai today but the city'stelevision viewing populace still doesn't seem fascinated by set-top boxes devices thathelp access pay channels. According to estimates, over 40,000 .

EDUCATIONPravara college ties up with Adelaide varsityTHE Pravara Rural Education Society of Loni in Ahmednagar has entered into amemorandum of understanding (MoU) with the University of Adelaide, Australia, for aneducational partnership with their engineering colleges in all disciplines.

GEMS & JEWELLERYJewellery sector confident of achieving $16-b export targetTHE domestic gems and jewellery industry is expected to achieve the export target of $16billion by the year 2007 set by the Commerce Ministry following the special focus initiativesannounced in the Foreign Trade Policy on Tuesday.

LEATHERLeather units hail proposals

THE leather industry has welcomed the Foreign Trade Policy. Both leather garment andleather shoe manufacturers said the proposals would help them become more cost-competitive. Mr M. Rafeeque Ahmed, Chairman of Farida Group, which makes shoesmore.Acceptable in the foreign market.

INDUSTRY ASSOCIATIONS

FAPCCI awards deadline


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CINEMAGovt can subsidise Kannada films, says theatre bodyIN a bid to end the imbroglio concerning the film industry in the State, the KarnatakaCinema Theatre Owners' Association has drafted an "Interim Resolution", which, ifimplemented, will work "towards the betterment of the Kannada film .

RURAL DEVELOPMENT`Bengal a role model in rural sanitationWHEN it comes rural sanitation, West Bengal shows the way not only to the country butalso to the entire developing world. In a joint press conference, UNICEF and West BengalGovernment on Tuesday announced that the State had become a model .

HUMAN RESOURCES

Training centre for nurses at Mangalore

TRADE & LABOUR UNIONS

Demand to revoke suspension of KSCARDB employees

EXPORTS & IMPORTSNew Foreign Trade Policy Going for the big leagueIn a clear signal that economic reforms are back on track, the thrust of the New ForeignTrade Policy is on export promotion, moving away from quantitative restrictions andimproving competitiveness of industry to meet global market requirements. But will therebe real change on the ground in terms of quick and seamless implementation, askPravakar Sahoo and Geethanjali Nataraj.

A macro policy with micro focus tooTHE approach and content of the National Foreign Trade Policy (NFTP) should enthuseeveryone in the export business. By addressing a large number of their concerns to theextent possible.

TOURISMJWT plans segmented campaign to promote Pondicherry Tourism"The idea of weekend holidays in Pondicherry will be aggressively promoted amongpotential domestic tourists.

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