NEW FOREIGN TRADE POLICY 2015-2020

Minister of Commerce & Industry Smt. Nirmala Sitharaman released the much awaited Foreign Trade Policy - 2015-20

The Major highlights are given below for your ready reference:

1. Merchandise Export from India Scheme (MEIS) : A New Scheme introduced in place of existing (five) Chapter 3 Schemes. 

2. The benefit under MIES will be determined based on Exporting Product and Exporting Country divided in various Groups. The benefit will range between 2% to 5% of FOB Value of Exports.

3. Served From India Scheme (SFIS) is being replaced by a New Scheme - Services Export from India Scheme (SEIS)

4. All Service Providers of Notified Services located in India will be eligible for the benefits regardless of their constitution or profile of service provider.

5. The SEIS benefit of 3% or 5% will be based on Net Foreign Exchange Earned. 

6. The Duty Credit Scrips issued under both MEIS and SEIS will
    a. without any actual user condition
    b. Freely Transferable
    c. No longer restricted for any specified types of goods.
    d. Can be used for payment of Customs Duty /Excise Duty/Service Tax 

7. The units in SEZ will also be allowed to claim incentive under MIES and SIES Schemes.

8. The Nomenclature of Status Holder Scheme has been changed to One, Two, Three, Four and Five Star Export House.

9. The Criteria for Export performance for the recognition of status holder have been also changed from Rupees to US Dollar. The Minimum Export Performance in FOB Value during current and previous 2 Years is now 3 Million USD.

10. Manufacturer Status Holders will now enabled to Self Certify Country of Origin from India to qualify under various PTA, FTA, CECAs and CEPAs

11. To Boost "Make in India" Specific Export Obligation under EPCG will be reduced to 75% if goods are procured from domestic capital goods manufacturer.

12. Hard Copies of CA /CE / CS Certificates will not be required for various application. Online Upload facility of its soft copy will be made available in the new Online Application Process for Chapter 3 & Chapter 4 Schemes. 

13. Document Records of EPCG Authorisation will now be required to be maintainedonly for 2 Years after redemption.

14. A facility has been created to upload documents in Exporter Importer Profile which will hold copies of IEC, PAN, RCMC, Industrial Licence etc.. Once uploaded, No separate submission of these copies will be required with each application.

15. Communication with Exporter/Importer will be done through SMS/Email and thus mandatory fields like mobile no. and email address will be added in the IEC data base.

16. Application of refund of TED will now be made online.

17. EOUs, EHTPs, STPs have now been allowed 
      a) Share Infrastructural facilities among themselves
      b) Inter unit transfer of goods and Services
      c) To set up facility of Warehouses near the port of export.

18. Goods falling in the category of handloom products, books/periodicals, leather footwear, toys and customized fashion garments, having FOB Value upto Rs. 25,000/- per Consignment (finalized using e-commerce platform) shall be eligible for benefits under FTP.

19. e-Commerce Exports will allowed to be done under Manual Mode through Foreign Post Offices at New Delhi, Mumbai and Chennai and under Courier Regulations through Airports at Delhi, Mumbai and Chennai Only.

20. A New Chapter is introduced to resolve Quality Complaints and Trade Disputes. A Committee on Quality Complaints and Trade Disputes (CQCTD)  is being constituted. 

21. Vishakhapatnam and Bhimavaram in Andhra Pradesh are to be recognised as towns of export excellence for product category - Seafood.

22. New ANF & Appendices have also been notified along with the new FTP. 

Please note that specific Application, procedures and documentation will have to be prepared, applied and submitted as defined under the New FTP and Handbook of Procedures to avail of any of the said benefits under the new   FTP.

The Official Highlights of the NEW FTP is available on the below link: 
(Highlights of the FTP 2015-20)

India imposes anti-dumping duty on chemical from China

India has imposed an anti-dumping duty of up to $ 0.556 per kg on cheap imports of 'Sodium Tripoly Phosphate' from China for a period of five years.

The chemical is primarily used in industrial cleaning processes and ceramics manufacture.

The Directorate-General of Anti-Dumping and Allied Duties (DGAD), a nodal agency under the Commerce Ministry, recommended the imposition of the duty after an investigation. A DGAD probe concluded that the domestic industry had suffered material injury on account of dumping of the product by China.

The duty would range between $ 0.238 per kg and $ 0.556 per kg, it said.

Government: Import of Rubber chemical may attract safeguard duty

After a petition filed by M/s. NOCIL Ltd, which accounts for more than 50 per cent of the rubber chemical output, the Revenue Department has notified the imposition of safeguard duty on an imported product commonly used in treating natural rubber.

The Office of the Directorate-General of Safeguards identified the rubber chemical as PX-13 or 6PPD, which is extensively used in treating natural rubber, synthetic rubber, butadiene rubber, nitrilie rubber, carboxylated rubber and other synthetic rubber-based compounds, and availed of in the manufacture of various rubber products.

Arguing that the product has had a history of dumping since 2003, the domestic industry, in its petition, presented before the Court the import and injury-related data from 2000-01 to 2010-11 (December 2010).

According to Mr I.D. Majumder, Director-General (Safeguards), the petitioner claimed "a sudden, sharp and significant increase" during the injury period despite the imposition of anti-dumping duty on the product.

Government mulling rollback of countervailing duty on coal imports

The Finance Ministry is mulling over a rollback of the countervailing duty (CVD) on coal imports meant for power infrastructure projects.

Government sources said that the consideration was for relaxing the five per cent CVD for imports specifically meant for thermal power generation or coal-based power plants and related infrastructure projects. Currently, there is five per cent Customs duty on non-coking coal, in addition to one per cent excise duty announced on 130 items in the last Budget.

In the 2011-12 Budget, the government had imposed CVD of five per cent on coal imports in cases where the importers avail of Cenvat credit facility. This move was initiated when a levy of one per cent excise duty was proposed by the government on 130 items without Cenvat credit. But if Cenvat credit is taken, then these goods would attract a tariff rate of five per cent, which is applicable for all categories of coal imports such as lignite, coke, tar and others.

Finance Ministry officials contend that the CVD was imposed to provide a level-playing field for domestic manufacturers and was charged at a rate equal to the excise duty rate.

Cenvat credit rate denotes the credit availed by a manufacturer of goods in the form of a deduction of input tax paid on the purchase of raw materials, fixed assets, packing material etc. from the total tax payable to the government, while CVD is also known as anti-subsidy duty.

 

Government may impose import duty on sugar in a week

The government is likely to impose import duty on sugar in a week as cane planting gathering speed in the country

The Finance Ministry, which is seeking 15 per cent import duty, is likely to take a decision on the Food Ministry's proposal to end duty-free imports of sugar. It may be recalled that the Ministry, while extending an earlier deadline in April, had given the nod for duty-free imports till June 30.

A Food Ministry official, who foresees the Finance Ministry making an announcement regarding the increase in duty soon, believes that the government does not want the industry and farmers to be disadvantaged by imports.

Nevertheless, experts reckon that with the decline in domestic prices due to surplus output, the likelihood of imports was anyway low, even without duty.

Being the world's top sugar consumer and the biggest producer after Brazil, India's production is forecast to touch 24.5 million tonnes, against an annual consumption of about 22 million tonnes in the 2010-11 year ending in September. In the previous season, production was 19 million tonnes.

Meanwhile, the domestic sugar industry has been putting pressure on the government to convince the Food and Commerce ministries of the need to urgently open the exports quota as it has almost been used up. With sugar production in 2011-12 projected to be higher than the previous seasons at around 29.3 million tonnes, a decision on opening up exports becomes all the more essential.

As of now, sugar mills have exported close to 400,000 tonnes, of the half million tonnes permitted by the government under open general licence (OGL) for the 2010-11 sugar year, which began in October

Finance Minister gives DEPB 3-month extension for one last time

THE Duty Entitlement Passbook (DEPB), the popular-export incentive scheme, has got a three-month extension from the Finance Ministry. It was to end on June 30.

However, the Ministry has made it clear that exporters should brace themselves to switch to the duty drawback scheme by October as it would not grant any further extensions to DEPB.

According to a source, by permitting exporters to enjoy the benefits offered by DEPB for three more months, the government wants to ensure a smooth transition to the new scheme.

The source apprised that a three-member panel, comprising Secretaries from the Commerce and Finance ministries, would work out the modalities of migration to the duty drawback scheme.

Last week, the Finance Minister, Mr Pranab Mukherjee and Commerce Minister, Mr Anand Sharma met and discussed the issue and decided to extend the scheme.

It is a known fact that the Finance Ministry is firm on ending DEPB, contending that it allows exporters double benefit instead of just neutralising the import duty on inputs that go into exports.

In 2010-11, the scheme cost the exchequer Rs 8,520 crore, of which more than 60 per cent was exploited by large engineering and chemical exporters.

In contrast, the drawback scheme just neutralises levies paid on inputs. The rates are fixed annually, based on the changes in the duty structure in the Budget.

In this direction, an expert panel headed by Planning Commission member Mr Saumitra Choudhury will evaluate the duty drawback rates for all export products, including those covered under DEPB now.

Besides, the Finance Ministry has also asked the Commerce Ministry to direct export promotion councils to provide relevant data to the panel. The industry is not against the DEPB phase-out, as long as a substitute scheme is in place.

Fieo asks Mr. Anand Sharma for interest subvention, DEPB extension

DRAWING attention to the concerns over constant increase in export credit rate over the last one year, Mr Ramu S. Deora, President, Federation of Indian Export Organisations (Fieo), pointed out recently that exporters were competing with countries having credit rates below 5 per cent.

Speaking at an Interactive Session in Chennai recently, Mr Deora said that the base rate of Indian banks had moved up between 2-2.50 per cent in the last 7 to 8 months, pushing up export credit, but on the contrary, interest subvention for exports had been withdrawn from April 1, 2011.

According to the Fieo Chief, export finance cost, which was 7 per cent in July 2010, had now moved up to somewhere between 11-11.5 per cent, which is a whopping increase of about 57-64 per cent. Hence, Mr Deora urged the Commerce and Industry Minister, Mr Anand Sharma to prevail upon the government to draw the line between exports and domestic finance and make available export credit to the MSME sector at 7 per cent, and to others at 9 per cent in order to maintain export momentum.

On the DEPB scheme, Mr Deora acknowledged that it had been a time-proven instrument, helping Indian exports grow to the present level. "DEPB is well suited to the needs of small exporters, since it is not feasible for them to effect imports on their own account as economic volumes are not generated," Mr Deora said.

The Fieo chief observed that the uncertainty over continuation of the DEPB Scheme after June 30, 2011 had been a cause of concern to exporters, which could taper down growth. Hence, he urged Mr Sharma to extend the DEPB scheme till GST becomes operational or at least till the fiscal-end.

While suggesting a host of measures to cut transaction cost of exports, ranging between 7- 10 per cent of exports value, Mr Deora also alluded to the occurrences of long delay while ratifying the Norms for Advance Authorisation, issued under Paragraph 4.7 on self-declaration basis where SION does not exist.

Raising concern on the delays and paperwork involved in closure of advance authorisation at DGFT, the Fieo president contends that the same procedure should be put in force at the Customs also.

Mr Deora also asked the government to implement full EDI connectivity amongst the agencies involved in import/exports for seamless movement of cargo, which could go a long way in reducing transaction time and cost to a large extent.

Meanwhile, on the issue of DEPB extension and re-introduction of interest subvention, the Commerce Minister, Mr Sharma has made it clear that both issues have been taken up with the Finance Minister, who had given an assurance of adequately addressing the exporters' concerns.

Mr Sharma also announced that from now on the DGFT's zonal office would provide time-bound clearances, which would be audited every quarter. Besides, he also apprised that he was trying to make available the discharge of export obligations electronically in order to do away with the voluminous documents and delays.

The minister also assured that he would review the delays in imposition of provisional anti-dumping duty so that the same could be imposed in reasonable time, compared with the best practices. For providing commercial information to exporters, Mr Sharma agreed to strengthen commercial missions abroad and open more such missions.

With regard to the new manufacturing policy, Mr Sharma said it would be announced shortly with the aim of augmenting the share of manufacturing in GDP from 16 per cent to 25 per cent.