1. EXIM Policy of India
Ranjan Singh (MT14IND018)
Mechanical Engineering Department
Visvesvaraya National Institute of Technology, Nagpur
What is EXIM policy?
Brief history about EXIM
Objectives of EXIM policy
Documents in Indian EXIM Policy
Indian imports and exports
Comparison of Post and Pre 90’s imports and exports
EXIM policy 2009-2014
Highlights of EXIM Policy 2015-2020
3. What is EXIM policy?
Also knows as Foreign Trade Policy
The foreign trade of India is guided by the Export-Import
policy of India
The Ministry of Commerce and Industry, Government of India, pronounces the
Indian EXIM policy or Export-Import policy of India.
It contains policies in the sphere of Foreign trade i.e. with respect to import &
export from the country and more especially export promotion measures, policies
and procedure related to it.
Export means selling abroad and import as bringing into India, any goods and
The Government of India advises the Exim Policy of India for a phase of five
years under Section 5 of the Foreign Trade Development and Regulation Act,
The Exim Policy is renewed every year on the 31st of March and the revisions,
improvements and new proposals become effective from 1st April of every year.
4. Brief History about EXIM
In the year 1962, the Government of India selected a special Exim Policy
Committee to review the government preceding policies of export import
(Indian Exim policy).
The committee was afterward permitted by the Government of India. Mr. V.
P. Singh, the then Commerce Minister and pronounced the new Exim Policy
of India on the 12th of April, 1985.
Primarily the Export-Import Policy of India was launched for the period of
three years with main intention to boost the export business in India.
5. Objectives of EXIM Policy
To establish the framework for globalisation.
To promote the productivity, competitiveness
of Indian industry.
To encourage the attainment of high &
internationally accepted standards of quality.
To increase export by facilitating access to raw materials, intermediate
components, consumables and capital goods from the international market
To generate new employment.
To provide quality consumer products at reasonable prices.
6. Indian top Imports and Exports
Food and beverage products
Defense products, etc.
8. India’s share in Global Trade
According to the WTO, in merchandise trade, India was the 19th largest
exporter in the world with a share of 1.7 percent and the 12th largest importer with a
share of 2.5 percent in 2013.
In commercial services, India was the 6th largest exporter in the world with a share
of 3.2 percent and the 9th largest importer with a share of 2.8 percent.
9. Comparison of Pre 90’s & Post 90’s
1948-51 650 647 -3 Excess of imports due to pent-up-
demand of war, shortage of food and
raw material due to partition, etc.
1951-56 730 622 -108 Trade deficit was largely due to
programme of industrialization which
gathered momentum and pushed up
the import of capital goods
1956-61 1080 613 -467 Excess of import due to setting of
steel plants, heavy expansion &
renovation on railways &
modernization of many industries.
10. Comparison of Pre 90’s & Post 90’s
1961-66 1224 747 -477 Excess imports due to defence needs
caused by aggression by China & Pakistan,
rapid industrialization, need of food grains
due to failure of crops
1985-90 28,874 18033 -10841 Huge trade balance compelled
government to approach for loan to World
1990-92 45522 38300 -7222 Push was given to export, but as a
consequence of Gulf war govt. failed to
curb imports. Govt. introduced a no. of
measures but failed to boost exports.
11. Comparison of Pre 90’s & Post 90’s
1992-01 140740 118252 -22488 In 1992-01,slow down in exports due to-
•Depressed nature of world markets.
•Saturation of developed countries
•Increased protectionism by industrialized
countries in area of textile and clothing.
•Increasing competition from China &
•In 2000-01 export was largely due to rupee
depreciation along with further trade
liberalization, more openness to foreign
investment in EOU sectors like IT
12. Comparison of Pre 90’s & Post 90’s
2002-03 65422 52512 -12910 Rise in oil imports, food and allied
products, capital goods
2003-04 80177 64723 -15454 Exim policy gave massive thrust to
Duty free import facility for service
sector up to earning 10lakh foreign
Liberalization of duty exemption
Besides all these measures, trade balance
is high because of imports of petroleum
13. Export Import Policy, 2009-14
General Provisions regarding Import and Export
Special Focus Initiatives
Duty Exemption / Remission Schemes
Export Promotion Capital Goods Scheme
Export Oriented Units (EOUs) etc
Special Economic Zones
14. Aims is General
The policy aims at developing export
potential, improving export performance,
boosting foreign trade and earning
valuable foreign exchange. FTP assumes
great significance this year as India's
exports have been battered by the global
A fall in exports has led to the closure of
several small- and medium-scale export-
oriented units, resulting in large-scale
Export Target : $ 200 Billion for 2010-11
Export Growth Target: 15 % for next
two year and 25 % thereafter.
16. Legal Framework
The Foreign Trade Policy (FTP) 2009-14 operated with effect from 27th
August 2009 till 31st March 2014
An annual supplement is issued and forms part of the FTP.
The Central Government can make any amendment in the FTP by issuing a
notification in the public interest
Authorizations issued before commencement of FTP shall continue to be
valid for the purpose and duration for which such authorization was issued
In case an export or import which is permitted freely under FTP, is
subsequently subjected to any restriction or regulation, such export or import
will ordinarily be permitted not withstanding such restriction or regulation.
17. General Provisions
Exports and Imports free unless regulated
Compliance of Imports with Domestic Laws
The norms applicable to domestically produced goods shall apply to imports, unless specifically
Interpretation of Policy
The decision of DGFT shall be final and binding on all matters relating to interpretation of
DGFT may, specify procedure to be followed by an exporter or importer or by any licensing/
regional authority or by any other authority
Exemption from Policy / Procedure
DGFT may exempt any person or class or category of persons from any provision of FTP or
any procedure and may, while granting such exemption, impose some conditions
Principles of Restriction
Protection of public morals
Protection of human, animal or plant life or health
Protection of patents, trademarks and copyrights, and the prevention of deceptive practices
18. General Provisions
Prevention of use of prison labour
Protection of national treasures of artistic, historic or archaeological value
Conservation of exhaustible natural resources
Protection of trade of fissionable material or material from which they are derived; and
Prevention of traffic in arms, ammunition and implements of war
Export/Import of Restricted Goods/Services
‘Restricted’ goods / services may be exported or imported only in accordance with an
Authorization / Permission/ License
Terms and Conditions of a license / Certificate / Permission / Authorization
Every Authorization shall be valid for prescribed period of validity and shall contain such terms
and conditions as may be specified by Regional Authority (RA), which may include:
(a) Description, quantity and value of goods;
(b) Actual User condition;
(c) Export obligation;
(d) Minimum value addition to be achieved; and
(e) Minimum export / import price
19. General Provisions
Importer-Exporter Code (IEC) Number is mandatory unless specifically
Transit Facility shall be regulated in accordance with bilateral treaties between India
and those countries
Actual User Condition
Capital goods, raw materials, intermediates, components, consumables, spares,
parts, accessories, instruments and other goods, which are importable without any
restriction, may be imported by any person. However, if such imports require an
Authorization, actual user alone may import such goods unless actual user
condition is specifically dispensed with by DGFT
Second Hand Goods
Import of second hand goods, except second hand capital goods, shall be restricted
for imports and may be imported only in accordance with the provisions of FTP,
ITC(Indian Trade Classification) (HS), HBP v1(Handbook of Procedures), Public
notice or an Authorization in this regard. Import of re-manufactured goods shall
be allowed only against a license
20. General Provisions
Import of Gifts shall be ‘free’ unless otherwise specified/ restricted
These may be imported as part of passenger baggage without an
Authorization- household goods and personal effects, samples of items
that are freely importable, exporters coming from abroad are also allowed
to import drawings, patterns, labels, price tags, buttons, belts, trimming
and embellishments required for export
Import on Export basis
Freely exportable new or second hand capital goods, equipments,
components, parts and accessories, containers meant for packing of goods
for exports, jigs, fixtures, dies and moulds may be imported for export
without an Authorization on execution of BG(Bank Guarantee) with
21. General Provisions
Clearance of Goods from Customs
Goods already imported / shipped / arrived, in advance, but not cleared from
Customs may also be cleared against an Authorization issued subsequently
Private / Public Bonded Warehouses for Imports
Private / Public bonded warehouses may be set up in DTA(Domestic Tariff Area).
Any person may import goods, except prohibited items, arms and ammunition,
hazardous waste and chemicals and warehouse them in such bonded warehouses.
Such goods may be cleared for home consumption whenever required. Customs
duty as applicable shall be paid at the time of clearance.
All goods may be exported without any restriction except to the extent that such
exports are regulated by ITC (HS) or any other provision of FTP or any other law
for the time being in force. DGFT may however, specify through a public notice
such terms and conditions according to which any goods, not included in ITC(HS),
may be exported without an Authorization
22. Special Focus Initiatives
The Chapter on Special Focus Initiatives
is broadly classified into:
Support to status holders
Agriculture and Village Industry
Gems & Jewellery
Leather and Footwear
Electronics and IT Hardware
Sports Goods and Toys
Green products and technologies
Incentives for Exports from the
North Eastern Region
26. Promotional Measures
Assistance to States for Developing Export Infrastructure and Allied Activities
The objective of scheme is to establish a mechanism for involving the State governments to
participate in funding of infrastructure critical for growth of exports by providing export
performance linked financial assistance to them
Market Access Initiative (MAI)
Financial assistance is provided for export promotion activities on focus country, focus
product basis. The Government may provide financial assistance ranging from 25% to
100% of total cost. A whole range of activities can be funded under MAI scheme. These
1) Market survey/studies
2) Setting up of showroom houses
3) Participation in international trade fairs
4) Brand promotion
5) Publicity campaigns, etc.
27. Promotional Measures
Market Development Assistance (MDA)
Financial assistance is provided for a range of export promotion activities
implemented by EPCs and Trade Promotion Organizations by way of
participation in Trade Fairs, Buyer Seller meets, Export promotion
Brand Promotion and Quality
The primary objective is to promote and create international awareness of
the “Made in India” label in markets overseas
Central Government will assist in modernization and up gradation of test
houses and laboratories to bring them at par with international standards
28. Promotional Measures
Export and Trading Houses: Status Category
Served From India Scheme (SFIS)
Focus Market Scheme (FMS)
Focus Product Scheme (FPS)
Market Linked Focus Products Scrip (MLFPS)
Status Holders Incentive Scrip (SHIS)
Incremental Exports Incentivization Scheme
Vishesh Krishi And Gram Udyog Yojana (VKGUY)
29. Duty Exemption/Remission Schemes
The schemes initiated by the Government under this category are as
Export Promotion Capital Goods Scheme (EPCG)
Advance Authorization Scheme
Duty Free Import Authorization Scheme (DFIA)
Duty Entitlement Passbook (DEPB) Scheme
Duty Drawback (DBK) Scheme
30. Export Promotion Capital Goods
This scheme has been discussed in Foreign Trade Policy under following
Zero duty EPCG Scheme
Concessional 3% duty EPCG Scheme
EPCG for projects
EPCG for Retail Sector
EPCG Authorization for Annual Requirement
Provisions for BIFR Units
31. Export Promotion Capital Goods
EPCG for agro units
Indigenous Sourcing of capital goods and benefits to domestic supplier
Fixation of Export Obligation
Technological Up gradation of existing EPCG machinery
Incentives for Fast Track Companies
EPCG for Green Technology Products -reduced EO
32. EPCG scheme – Eligibility Criteria
Scheme covers manufacturer exporter, merchant exporter and service provider
Manufacturer exporter : A person who exports goods manufactured by him or
intends to export such goods
Merchant exporter : A person engaged in trading activity and exporting or
intending to export such goods
Service provider : A person providing
Supply of a service from India to other country
Supply of a service from India to the service consumer of any other country in India
Supply of a service from India through commercial / physical presence in the territory of any
Supply of a service in India relating to exports paid in free foreign exchange or in Indian Rupees
which are otherwise considered as having being paid for in free foreign exchange by RBI.
33. Export Promotion Capital Goods (EPCG) Scheme also covers a service
provider who is designated / certified as a Common Service Provider (CSP)
by the DGFT
Exports by Users of the common service, to be counted towards fulfillment
of EO of the CSP
A 100 % Bank Guarantee equivalent to the portion of duty foregone by
users of CSP apportioned in terms of quantum of export obligation is to be
As regards details of users, the CSP is required to inform to the concerned
Regional Authority prior to exports, and the quantum of Bank Guarantee
shall be equivalent to duty foregone amount and BG can be given by CSP or
any one of the users or a combination thereof, at the option of CSP.
EPCG scheme – Eligibility Criteria
34. EPCG scheme–Procurements allowed
Service : It includes all the tradable services covered under General Agreement on
Trade in Services and earning free foreign exchange (Refer Appendix 10 ‘List of
services’ of FTP)
Imports allowed under the EPCG scheme
Capital goods for pre production, production and post production activities
Spares (including refurbished/ reconditioned spares), tools, jigs, fixtures, dies, moulds
and components used for assembly or manufacture of capital goods
Second hand capital goods also allowed
Import of motor cars, sports utility vehicles allowed only to hotels, travel agents, tour
operators, golf resorts etc
Import of restricted items under the ITC-HS allowed only subject to approval from
EFC at Headquarters.
35. EPCG scheme–Procurements allowed
Domestic procurements also allowed
EPCG license holder required to file a request with the Regional Authority
for invalidation of direct imports and allowing domestic procurements
Domestic supplier entitled to ‘deemed exports’ benefit
Deemed exports benefit include refund of terminal excise duty
However, for EO computation, duty saved would be notional customs duty
Imports subject to Actual user condition
Goods can be imported only by the actual user
36. Post Export EPCG Scheme
Exporters if they choose to, may import Capital Goods on payment of duty
in cash and subsequently receive duty credit scrip on completion of export
Thus there would be no duty remission / duty exemption at the time of
import of the Capital Good (CG).
Applicant will have to inform the Regional Office of DGFT (RA) about the
import of CG and based on which RA will fix export obligation.
Since the duties have been paid upfront at the time of import of CG, the EO
would be 85 % of normal EO.
37. Export Of Products From North East
To promote manufacturing activity and employment in the North Eastern
Region of the country, export obligation under the EPCG Scheme shall be
25% of the normal export obligation.
However, export of specified products through notified Land Customs
Stations of North Eastern Region shall be provided additional incentive to
the extent of 1% of FOB value of exports.
38. Special Economic Zones (SEZ)
This Chapter is governed by the Special Economic Zone Act, 2005.
The main objectives of the SEZ Act are:
Generation of additional economic activity
Promotion of exports of goods and services
Promotion of investment from domestic and foreign sources
Creation of employment opportunities
Development of infrastructure facilities
The SEZ Rules provide for:
Simplified procedures for development, operation, and maintenance of the Special Economic
Zones and for setting up units and conducting business in SEZs
Single window clearance for setting up a unit in a Special Economic Zone
39. Special Economic Zones (SEZ)
Single Window clearance on matters relating to Central as well as State
The incentives and facilities offered to the units in SEZs for attracting
investments into the SEZs, including foreign investment are:
Duty free import/domestic procurement of goods for development, operation and
maintenance of SEZ units
100% Income Tax exemption on export income for SEZ units under Section
10AA of the Income Tax Act for first 5 years, 50% for next 5 years thereafter and
50% of the ploughed back export profit for next 5 years
External commercial borrowing by SEZ units upto US $ 500 million in a year
without any maturity restriction through recognized banking channels
Exemption from Central Sales Tax
40. Special Economic Zones (SEZ)
Exemption from Service Tax
Single window clearance for Central and State level approvals
Exemption from State sales tax and other levies as extended by the
respective State Governments
41. Highlights of EXIM Policy 2015-2020
1st April 2015 to 31st March 2020.
Vision, Mission and objectives:
• The vision is to make India a significant partner in world trade
• Government aims to increase India’s exports of merchandise and
services from USD 465.9 billion in 2013-14 to approximately
USD 900 billion by 2019-20.
• Raise India’s share in world exports from 2 percent to 3.5
• Initiatives such as “Make in India”, “Digital India” and “Skills
India” to create an “Export Promotion Mission” to provide a
stable and sustainable policy environment for foreign trade.
42. The Mega Agreements: Implications for India
• Trans Pacific Partnership,
• Trans-Atlantic Trade and Investment Partnership and
• Regional Comprehensive Economic Partnership (RCEP)
These will add a completely new dimension to the global trading
43. Market Strategy
India’s future bilateral/regional trade engagements will be with countries
that are not only promising markets but also major suppliers.
Employment-generating sectors such as textiles, agriculture, leather and gems
& jewellery will continue to receive major attention for promoting exports to
the US market.
India will focus trade promotion activities on new products with higher
value addition particularly in the categories of defence equipment,
medical equipment, construction material, processed foods, as also services.
India is negotiating Comprehensive Economic Cooperation/Partnership
Agreements with Australia and New Zealand.
Another focus area is South-East Asia. Trade integration with the
CLMV (Cambodia, Lao PDR, Myanmar and Vietnam), to enable the Indian
private sector to set up manufacturing hubs in this region
44. Product strategy
The focus will be on promoting exports of high value
products with a strong domestic manufacturing base,
including engineering goods, electronics, drugs and
Government aims to encourage and promote hi-tech products
and, as a first step, certain products have been identified for
a special focus for the duration of the policy.
The potential of the MSME sector, the problems it faces and its
requirements have been kept in view while framing the FTP.
45. The Services Sector
Efforts will be made to gain effective market access abroad through
comprehensive economic partnership agreements with important markets.
A Global Exhibition on Services will be held annually, which will provide a
forum for showcasing India’s strengths in the Services sector.
Institutional Mechanisms for Trade Promotion:
The schemes for trade promotion under the Department of Commerce,
namely, the Market Access Initiative (MAI) Scheme and the Market
Development Assistance Scheme
The present allocation for the MAI scheme is inadequate; efforts will be made
to augment resources for the scheme.
A major convention-cum exhibition centre will be developed at Pragati
Maidan in Delhi.
Project exports will be encouraged through special lines of credit offered
by the Ministry of External Affairs and the Buyers‟ Credit Scheme of
the Department of Commerce through Exim Bank of India.
1. Write the full form of these terms related to EXIM policy: FMS,
ITC, FOB, FOR, SEZ.
2. What is EXIM policy?
3. Objectives of EXIM policy?
4. Comparison between pre and post 90’s EXIM policy of India?
5. Discuss in short about EXIM policy 2015-2020.