FOREIGN TRADE POLICY (2015-

2020)

-Prof. Neha Rawal

INDIA’S FOREIGN TRADE POLICY
(2015-2020)
The Foreign Trade of India is guided by the Export Import (EXIM) policy of the
Government of India and is regulated by the Foreign Trade(Development and Regulation)
Act 1992.
The Foreign Trade Policy contains various decisions taken by the government in the sphere
of foreign trade i.e. with respect to import and export of the country.
It is the set of guidelines and instructions established by DGFT (Directorate General of
Foreign Trade) in matters related to imports and exports in India.
*DGFT( DIRECTORATE GENERAL OF FOREIGN TRADE) is the main governing
body in matters related to EXIM policy.

*The policy is prepared and announced by the Central Government (Ministry

of Commerce) which aims at:-

1)Developing export potential

2)Improving export performance
3)Encouraging foreign trade and creating favorable balance of payment in
general.
Objectives of Foreign Trade Policy (2015-2020)

 FTP (2015-2020) 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 program”.
 Restricting Imports so that it can lead to favorable BOP( Balance of Payment).
 FTP aims at improving ease of doing business.(by introducing e-governance).
 To provide a stable and sustainable policy environment for foreign trade in
merchandise and services ( provides regulatory framework for imports and
exports).
 To encourage exports through a mix of various incentives and schemes.
An overview of some of the major initiatives (for ease
of doing business) under the Foreign Trade Policy:

 Niryat Bandhu Scheme

DGFT has come up with the Niryat Bandhu Scheme for mentoring new and potential
exporters and mentor them through orientation programmes, counselling sessions, etc., for
being able to get into international trade and boost exports from India.
 Issue of e- IEC:-Importer Exporter code is mandatory for carrying out exports and
imports from/to another country. DGFT has facilitated the online filing of IEC
application. Applicant can upload the documents and pay the requisite fee through net
banking. Applicant can however submit the application duly signed digitally.
 e-BRC:- The initiative of Electronic Bank Realization Certificate (e-BRC) enables
DGFT to capture essential details of realization of export proceeds directly from the
banks by means of secured electronic mode. This paves the way for implementation of
various export promotion schemes without any physical interface with the stake
holders.

Exporter Importer Profile
Exporter importer profile is created to upload various documents, and to
reduce the cost of transaction and time. One of the featured advantages of the
system is that after the documents are uploaded, it isn’t necessary to submit
the documents or copies of the same to Regional Authority repeatedly with
each application.

Online Filing of Applications

The DGFT has facilitated the online filing of applications to obtain IEC and
various Authorizations/scrip. The furnished applications are digitally signed
and submitted electronically to the concerned Regional Authority of DGFT,
post which it is electronically processed by the Regional Authority and
Authorization/scrip’s are issued.

E-Mail Notification Service

The Central Board of Excise and Customs (CBEC) has commenced an e-mail
notification service to assist the importers with information pertaining to all
important stages of import clearances.
Reduction in mandatory documents for imports and exports ( only 3
documents are required- Bill of Lading, Commercial Invoice cum
packing list, Shipping bill)

Free passage of Export consignment:- Consignments of items meant

for exports shall not be withheld/ delayed for any reason by any
agency of Central/ State Government. In case of any doubt,
authorities concerned may ask for an undertaking from exporter and
release such consignment.

24*7 custom clearance.

 Export promotion schemes and incentives:-

Advance Authorization Scheme: Under this scheme, an exporter is issued a letter of

authorization to allow duty free import of inputs, which are physically incorporated in
export product (making normal allowance for wastage).
Imports of commodities under this scheme is exempted from the payment of basic customs
duty, additional customs duty, education cess, anti-dumping duty, and safeguard duty.
Inputs imported under Advance Authorization generally require a minimum value addition
of 15% ( the amount of duty saved + 15%) that is the EXPORT OBLIGATION. Time limit
for EO is 18months or specified, whichever is more.
Note: The scheme is for actual user and is non-transferable.
Export experience of minimum 2years is required to avail the scheme.
Duty Free Import Authorization:-

Duty Free Import Authorisation is issued to allow duty free import of inputs. Duty
Free Import Authorisation shall be exempted only from payment of Basic Customs
Duty.

Duty Free Import Authorisation shall be issued on post export basis for products
for which Standard Input Output Norms have been notified. Application is to be
filed online to the Regional Authority concerned before effecting export under this
scheme.

Minimum value addition of 20% shall be required to be achieved i.e. Export

Obligation (amount of duty saved + 20%)
Time period for completion of Export Obligation is 12 months. It is transferable.
Export Promotion Capital Goods – EPCG Scheme:-
Export Promotion Capital Goods (EPCG) Scheme helps facilitate import of capital
goods into India for producing quality goods and service and to enhance India’s
export competitiveness. EPCG scheme allows for import of capital goods used in
pre-production, production and post-production at zero customs duty.

Export Obligation- 6 times of duty saved, to be fulfilled in 6years from the date of
issue of authorization.

In case, EPCG authorisation holder fails to fulfil prescribed export obligation, the
importer is required to pay customs duties plus interest as prescribed by Customs
authority. Export obligation can be fulfilled by the EPCG authorisation holder
through export of goods which are manufactured by him or his supporting
manufacturer/services rendered by him, for which EPCG authorisation has been
granted.
Note:- Second hand capital goods are not eligible for EPCG scheme.
Reward Schemes:-
Merchandise Export from India (MEIS):-The Government of India has
introduced Exports from India Schemes through the Foreign Trade Policy (FTP)
2015-20 with effect from April 1, 2015.

The aim of Merchandise Exports from India Scheme (MEIS) is to offset

infrastructural inefficiencies and associated costs involved in export of goods or
products, which are produced or manufactured in our country, especially products
having high export intensity, employment potential and to enhance India’s export
competitiveness in the world market. It replaces five similar incentive schemes
available under the Foreign Trade Policy 2009-2014:
Schemes replaced by MEIS are as under:- (i) Focus Product Scheme (FPS), (ii)
Market Linked Focus Product Scheme (MLFPS), (iii) Focus Market Scheme
(FMS), (iv) Agri. Infrastructure Incentive Scrip (AIIS), (v) Vishesh Krishi Gramin
Upaj Yojana (VKGUY).
Under this scheme rewards in the form of Duty Credit Scrip are given to the
exporter on export of notified goods, which have been produced/ manufactured in
India.
Scrip itself and Goods imported/ domestically procured against the scrip are freely
transferable.

Different rates have been notified for different destination countries and different
commodities.
Rewards 2%-5% under MEIS are payable as a percentage of realized FOB value.
Service Exports from India Scheme (SEIS) :-
Aims to promote export of services from India by providing duty scrip credit for
eligible exports.
Under the scheme, service providers, located in India, would be rewarded under
the SEIS scheme, for all eligible export of services from India.
To be eligible, a service provider (Company / LLP / Partnership Firm) should have
a minimum net free foreign exchange earnings of USD15000 in the preceding
financial year to be eligible for duty credit scrips.

For proprietorships or individual service providers, a minimum net foreign

exchange earnings of USD10,000 in the preceding financial year is required to be
eligible for the scheme.
In order to claim reward under the SEIS scheme, the service provider shall have
to have an active Import Export Code (IE Code) at the time of rendering such
services for which rewards are claimed.
Service providers of eligible services shall be entitled to duty credit scrip at
notified rates on the net foreign exchange earned. Duty credit scrips can be used
for the payment of custom duties, excise duties, service tax on procurement of
services.
Rate of Reward:-
Professional Services- 5%
(legal services, medical, engineering, services provided by midwives, nurses,
architectural services, accounting, etc.)

Educational Services – 5%
(Primary, Secondary, higher education, adult education)

Health and Social Services – 5% Rate of Reward

Hospital services

Tourism and Travel Services – 3% or 5% Rate of Reward

Hotel (3% Rate of Reward)
Restaurants (3% Rate of Reward)
Travel agencies and tour operators services (5% Rate of Reward)
Tourist guides services (5% Rate of Reward)
Recreational, Cultural and Sporting Services – 5%
Entertainment services (including theatre, live bands and circus services), News
agency services
Libraries, archives, museums and other cultural services
Sporting and other recreational services.
Other Business Services:
(Advertising, market research, packaging, printing , publishing, etc.)

Status Holder Scheme is for business leaders who have excelled in

international trade and have successfully contributed to country’s foreign trade.

All exporters having an IEC no. shall be eligible for recognition as a status holder
depending upon a certain level of export performance
The export performance will be calculated for the current year plus the previous
two years.
The exporters are given star ratings from 1-5 stars according to their volume of
exports and earnings.
All the status holders get various kind of privilages.
Status Category Export Performance FOB (as
converted) value in USD million

One star Export House USD 3 million

Two star Export House USD 25 million
Three star Export House USD 100 million
Four Star Export House USD 500 million
Five star Export House USD 2000 million
THANK YOU