Government unveils new trade policy

“These measures will infuse necessary confidence in the exporting community and provide required dynamism even in this gloomy time,” Sharma said,adding the government will watch the global economic developments closely and “shall intervene effectively to ensure that Indian exports stay well on course for achieving the targets”.

He,however,expressed confidence that exports would grow by 20 per cent in the current fiscal. India’s exports grew by 21 per cent in 2011-12 to touch USD 303.7 billion.

As part of the seven-point strategy to boost exports,government has accepted the key demand of the industry to extend the 2 per cent interest subsidy till March 2013.

“We have now decided to extend the scheme for another year till March 2013 and expand its coverage to include other labour intensive sectors namely toys,sports goods,processed agricultural products and ready-made garments,” he said.

India Inc including exporters community welcomed the measures,saying that these initiatives would help in tiding over the problem being faced by exporters on account of global demand slowdown.

To encourage exports,the government had came out with an interest subvention scheme,which ended on March 31,2012.

In a major decision,Sharma said,”We will be permitting utilisation of these scrips (duty free scrips) for procurement of goods from domestic market for payment of excise duty.”

Sharma added that this decision has been taken to promote domestic manufacturing and value addition and employment and will be a significant measure of import substitution.

The scrips or certificates can be used for importing goods duty free and is transferable.

Sharma said that one of the key objectives of FTP has been to give a thrust to technology upgradation of exports in order to enhance global competitiveness of products.

“We have taken a decision now to extend it (Zero Duty EPCG Scheme ) up to March 31,2013. We have also decided to enlarge the scope of the scheme,” he said,adding the EPCG scheme was operational till March 2012.

At present,benefits under the scheme are not available to units which are availing benefits under Technology Upgradation Fund Scheme (TUFS) and Status Holder Incentive Scheme (SHIS).

“However,now benefits under the scheme will be allowed to be taken by companies for another line of business for which TUFS benefits have not been availed. Alternately,if benefits under TUFS or SHIS have been availed and were subsequently surrendered or remain unused,the facility of the scheme will be available,” he said.

Under the zero duty EPCG scheme,a domestic manufacturer can import capital goods at zero duty,but subject to some export obligations.

In order to give a thrust to labour intensive exports,the government is doing away with the condition of maintaining average level of exports for sectors like carpets,coir,jute.

In order to reduce transaction costs,the government has introduced a new post-export EPCG scheme,which will provide flexibility to exporters for importing capital goods. Under this,exporters will be entitled to obtain duty free scrip in proportion to the actual exports. To promote manufactured exports of green technology products,export obligation under EPCG scheme is being reduced for 16 products including solar cells,wind turbines,water treatment plants,electrically operated vehicles.

To promote manufacturing activity and generating employment in the North Eastern states,the government has also reduced export obligation under the scheme for exporters of those areas.

Under market diversification scheme,this year,the government has added seven new markets to Focus Market Scheme (FMS) and same number to the Special Focus Market Scheme. The new markets include Austria,Myanmar,the Netherlands Ukraine,Morocco and Uruguay. Forty six new items are being added to Market Linked Focus Product Scheme. It was extended till March 2013 for export to the US and the EU in respect of apparel sector,Sharma said.

To boost manufacturing in the country,SHIS scrip holder may transfer the scrip to another SHIS holder who has a manufacturing facility. The Status Holder Incentive Scrip (SHIS) allow import of capital goods for technology upgradation in specified sectors. Further,it has been decided that exports shipped through courier and e-commerce platform will be eligible for export benefits if shipments are effected from Delhi and Mumbai. Now,he said,exporters will not be required to make any request to banks for issuance of Bank Export and Realisation Certificate and this scheme will ensure seamless connectivity amongst DGFT,Customs,Banks and exporters for settlement and release of export benefits.

“This has been done with the objective of ensuring minimum human interface and reducing transaction cost,” he added.

In order to provide facility to Indian exporters to reach out to new markets,”we administer another scheme Market Access Initiative under which assistance is provided to exporters to organize buyer-seller meets and exhibitions”. Thirteen India shows have been planned for this financial year which will be held in different parts of the world to showcase the best of Indian industry and manufactured products and promote Brand India,he said. Three new towns are being declared as towns of export excellence – Ahmedabad and Kolhapur (Textiles),and Saharanpur (Handicrafts).

Highlights:

Following are the highlights of the supplementary annual Foreign Trade Policy:

* Government aiming 20% export growth in 2012-13

*2% interest subsidy scheme extended till March 2013

* 0% duty EPCG scheme for technology upgradation extended till March’13

* Incentives for exports from north-eastern states

* Shipments from Delhi,Mumbai through post,courier or e-commerce to get export benefits

* Single revolving bank guarantee for different export deals

* Seven new markets added to Focus Market Scheme

* Market linked focus product scheme extended till March’13 for apparel export to USA and EU

* Ahmedabad,Kolhapur and Shaharanpur new Towns of Export Excellence

* Govt to come out with new guidelines to promote SEZs

* Focus on market diversification to continue

* Steps announced to reduce transaction cost of exports

* Foreign Trade Policy document made more user friendly

* 13 shows abroad to promote Brand India

Trade Policy gives incentives to exporters from North East

With an aim to promote exports from the North Eastern states,the Centre today reduced compliance burden to one-fourth for exporters to avail the popular EPCG scheme to import capital goods at very low customs duty.

“We have taken a decision to reduce the export obligation under the EPCG scheme to 25 per cent of the normal export obligation and this facility will be applicable to North Eastern states and Sikkim,” Commerce Minister Anand Sharma said,while releasing the annual supplement to the Foreign Trade Policy.

This,he said,is being done to promote “manufacturing activity and generating employment in the North Eastern states”.

Export Promotion Capital Goods (EPCG) is an export promotion scheme under which an exporter can import certain amount of capital goods at either zero or three per cent customs duty,for upgrading technology related with exports.

However,to avail the scheme,the exporter has to meet a pre-determined export obligation over a certain period.

Besides the EPCG,Sharma also announced incentives to promote exports from customs stations in the region. “We are also going to provide additional incentive of one per cent of FOB (Free On Board) value of exports for specified products through all Land Customs Stations of North Eastern Region,” Sharma said.

This benefit will be in addition to any other advantages that may be available under the Foreign Trade Policy in respect of these exports,the supplement said.

Also,Myanmar has been included in the list of Focused Market Scheme (FMS),which aims to offset high freight cost to certain select international countries with a view to make India more competitive in those markets.

This is also likely to benefit exports from the region as Myanmar borders four North Eastern states — Mizoram,Manipur,Nagaland and Arunachal Pradesh.

The inclusion of Myanmar in FMS list comes close on the heels of Prime Minister Manmohan Singh’s visit to South Asian neighbour.