Context: The Union Commerce and Industry Ministry announced changes in the Foreign Trade Policy (FTP) of the Government of India.
- The present Policy which came into force on 1st April, 2015, is for 5 years and has validity upto 31st March, 2020.
- In view of the unprecedented current situation arising out of the pandemic novel COVID-19, the Government has decided to continue relief under various export promotion schemes by granting extension of the existing Foreign Trade Policy by another one year (i.e. up to 31st March, 2021).
- Several other relief measures have also been announced to support trade and industry.
Salient points of the changes made in the FTP are as follows:
- Benefit under all the Export Promotion Schemes (except SEIS) and other schemes, available as on date, will continue to be available for another 12 months. The decision on continuation of SEIS will be taken and notified subsequently.
- The validity period of the Status Holder Certificates is also extended. This will enable the Status Holders to continue to avail the specified facilities/benefits.
- Exemption from payment of IGST and Compensation Cess on the imports made under Advance/Export Promotion Capital Goods(EPCG) Authorisations and by EOUs etc. has been extended up to 31.03.2021.
- The scheme for providing “Transport Marketing Assistance on the specified Agricultural Products” is further extended for one year.
- Validity period for making imports under various duty free import authorizations has been allowed automatic extension for another six months from the date of expiry, without requirement of obtaining such endorsement on these authorizations.
- Last dates for applying for various duty credit Scrips (MEIS/SEIS) and other Authorisations have been extended.
- Timelines for imposing late cuts, on the applications which are filed after the prescribed dates, have been relaxed.
- Validity period of Letter of Permission/ Letter of Intent as granted to Export Oriented Units(EOUs) is further extended up to 31st December, 2020.
- Last date of filing applications for refund of Terminal Excise Duty(TED)/Drawback, Transport and Marketing Assistance has been extended.
- Extension in time has been allowed for filing various Reports/Returns etc. under various provisions of the FTP.
Foreingn Trade Policy(FTP) or Export Import(EXIM) Policy of India
- Foreign trade in India is regulated by the Foreign Trade (Development and Regulation) Act, 1992 and is guided by the EXIM Policy of the Government of India.
- FTP is a set of guidelines and instructions established by the Directorate General of Foreign Trade (DGFT) in matters related to the import and export of goods in India.
- FTP 2015-20, aims at doubling the overseas sales to $900 billion by 2019-20.
- FTP 2015-20 provides a framework for increasing exports of goods and services as well as generation of employment and increasing value addition in the country, in line with the ‘Make in India’ programme.
- Integrating the foreign trade with “Make in India” and “Digital India” Programme.
- MEIS scheme: A single Merchandise Exports from India Scheme(MEIS) has been formulated by merging five existing schemes to promote merchandize exports.
- The incentives are to be provided in the form of duty scrips as % of FOB (free on board) value of exports.
- SEIS scheme: The Services from India Scheme(SFIS) has been replaced by Service Exports from India Scheme (SEIS). SEIS will be only for India based service providers and will be based on net foreign exchange earned.
- Both the SEIS and MEIS schemes are applicable to SEZ units.
- In order to ensure trade facilitation and ease of doing business, Paperless Trade and Online filling of forms has been provided.
- E-commerce export is applicable to items of worth upto Rs 25,000 per consignment.
- Provision for Export oriented units(EOUs), Export hardware technology park and software technology park.
- The Duty free scrips (form of credits) are provided to the exporters under various export promotion schemes of the government.The scripts may be transferable or nontransferable.
Directorate General of Foreign Trade(DGFT)
- Directorate General of Foreign Trade (DGFT) organisation is an attached office of the Ministry of Commerce and Industry and is headed by Director General of Foreign Trade.
- Right from its inception till 1991, when liberalization in the economic policies of the Government took place, this organization has been essentially involved in the regulation and promotion of foreign trade through regulation.
- Keeping in line with liberalization and globalization and the overall objective of increasing exports, DGFT has since been assigned the role of “facilitator”. The shift was from prohibition and control of imports/exports to promotion and facilitation of exports/imports, keeping in view the interests of the country.
- DGFT is the main governing body in matters related to Exim Policy.
Foreign Trade (Development and Regulation) Act,1992: The main objective of the Foreign Trade (Development and Regulation) Act is to provide the development and regulation of foreign trade by facilitating imports into, and augmenting exports from India. The act has replaced the earlier law known as the Imports and Exports (Control) Act 1947.