BRIEF OVERVIEW OF FOREIGN TRADE POLICY (2015-2020)

BRIEF OVERVIEW OF FOREIGN TRADE POLICY (2015-2020)

FTP 2015-20 is introduced with the objective of increasing exports of goods and services as well as generation of employment and increasing value addition in the country so that schemes like  ‘Make in India’ and " digital Inda" can be realised.The focus of the new policy is to support both the manufacturing and services sectors, with a special emphasis on improving the ‘ease of doing business’.

kEY HIGHLIGHTS OF THIS SCHEMES ARE:-

1.MEIS and SEIS schemes
► Merchandise Exports from India Scheme (MEIS): There were several reward schemes in for export promotion and in this policy an attempt is being made to rationalize and consolidate them into MEIS and SEIS .Five existing schemes to promote merchandize exports have been merged into a single Merchandise Exports from India Scheme (MEIS). In this scheme, the incentives are to be provided in the form of duty scrips as % of FOB {free on board} value of exports. One scheme for services exports called Served from India Scheme (SFIS) have been replaced in one scheme called Service Exports from India Scheme (SEIS). The benefits of this scheme will be only for India based service providers and will be based on net foreign exchange earned. The benefits of MEIS and SEIS have been extended to the SEZ units also.
MEIS has replaced following 5 different schemes of earlier FTP:-
1) Focus Product Scheme (FPS)
2) Market-Linked Focus Product Scheme (MLFPS)
3) Agri-Infrastructure Incentive Scrip
4) Vishesh Krishi Gram Udyog Yojana (VKGUY)

5) Incremental Export Incentive Scheme

For the purpose of granting incentibes, the countries have been grouped into three categories as followsS

Category A: traditional marketS

Category B: emerging & focus marketS

Category C: other markets

2.Status Holders

Merchant as well as Manufacturer Exporters, Service Providers, Export Oriented Units (EOUs) and Units located in Special Economic Zones (SEZs), Agri. Export Zones (AEZs), Electronic Hardware Technology Parks (EHTPs), Software Technology Parks (STPs) and Bio-Technology Parks (BTPs) are recognized as various status holders as follows:


STATUS                                                                        BUSINESS IN MILLION DOLLARS

ONE STAR EXPORT HOUSE                                              3

TWO STAR EXPORT HOUSE                                             25

THREE STAR EXPORT HOUSE                                       100

FOUR STAR EXPORT HOUSE                                          500

FIVE STAR EXPORT HOUSE                                           2000

3..Transferable Duty Scrips

A scrip literally means a “chit” and refers to a form of credit. The Duty free scrips are provided to the exporters under various export promotion schemes of the government s. Under these schemes, the exporters get incentives at a certain percentage of the export value and these incentives can also be used to reimburse duties on imported inputs. The scrips may be transferable or non-transferable. If they are transferable the holder of these scrips can sell them in market at discount. If the scrips are non-transferable, they come with actual user condition and the holder can use it to import inputs or capital goods duty free.
The foreign Trade Policy 2015 makes all duty free scrips freely transferable. These scrips can be used for payment of custom duty, excise duty and service tax also.

4.Prohibited Items

India’s Foreign Trade Policy prohibits the following:
Import & Exports trade in “arms and related material ” with Iraq
Any defense related equipment from North Korea
Any content which might enhance the nuclear energy adventures of Iran
Import of Charcoal from Somalia.

5. OTHER HIGHLIGHTS OF FTP 2015-2020.

• Raise India's share in world exports from 2% to 3.5%.

• Additional Ports allowed for Export and import Calicut Airport, Kerala and Arakonam ICD, Tamil Nadu have been notified as registered ports for import and export.

•  In an endeavour to resolve quality complaints and trade disputes, between exporters and importers, a new chapter, namely, Chapter on Quality Complaints and Trade Disputes has been incorporated in the Foreign Trade Policy

• Trade facilitation and enhancing the ease of doing business are the other major focus areas in this new FTP. One of the major objective of new FTP is to move towards paperless working in 24x7 environment.

•  Unlike annual reviews, FTP will be reviewed after two-and-Half years.

• Trade facilitation and ease of doing business by way of online filing of documents and emphasis on paperless trade

•  Facilitating & Encouraging Export of Defence Exports

• Vishakhapatnam and Bhimavaram added as Towns of Export Excellence Government has already recognized 33 towns as export excellence towns. It has been decided to add Vishakhapatnam and Bhimavaram in Andhra Pradesh as towns of export excellence (Product Category– Seafood)

• Export obligation under EPCG scheme reduced to 75% to Promote domestic capital goods manufacturing.

• It is proposed to have Online inter-ministerial consultations for approval of export of SCOMET items, Norms fixation, Import Authorisations, Export Authorisation, in a phased manner, with the objective to reduce time for approval.

• Higher level of support for export of defence, farm Produce and eco-friendly products.