Introduction: The Directorate General of Foreign Trade (DGFT) under the Ministry of Commerce and Industry, Government of India, has issued Policy Circular No. 07/2023 on 21st December 2023. This circular addresses the clarification on the applicability of the minimum value addition as specified under para 4.09 (v) of the Foreign Trade Policy (FTP) 2023, specifically concerning spices.
Detailed Analysis: Para 4.09 (v) of the FTP 2023 mandates a minimum value addition of 25% for spices. However, the recent circular provides crucial clarification, stating that this condition is applicable only when both the export and import items fall under Chapter 9 of the ITC HS Code.
This clarification is significant for exporters and importers dealing with spices, as it refines the scope of the minimum value addition requirement. It ensures a more precise understanding of when the 25% value addition becomes mandatory, focusing on the specific category of Chapter 9 in the ITC HS Code.
Exporters and members of the trade community need to take note of this clarification to align their operations with the FTP 2023 requirements accurately. The clarification prevents ambiguity and promotes compliance, contributing to smoother international trade practices in the spices sector.
Conclusion: In conclusion, DGFT’s Policy Circular No. 07/2023 brings clarity to the application of minimum value addition for spices under Para 4.09 (v) of FTP 2023. The directive emphasizes that the 25% value addition requirement is only applicable when both export and import items belong to Chapter 9 of the ITC HS Code.
This specific guidance enhances transparency and facilitates adherence to trade policies, benefitting exporters, members of the trade, and custom authorities. Stakeholders should review and implement this clarification to ensure seamless and compliant trading practices in the spices sector, aligning with the regulations outlined in FTP 2023.
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Government of India
Ministry of Commerce and Industry
Department of Commerce
Directorate General of Foreign Trade
Vanijya Bhawan, New Delhi
Policy – 4 Division
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Policy Circular No. 07/2023-DGFT | Dated: 21st December 2023
To
All Regional Authorities of DGFT
All Exporters/Members of Trade
All Custom Authorities
Subject: Clarification on the applicability of minimum Value Addition as provided under para 4.09 (v) of FTP 2023, in case of spices -reg.
Attention is drawn towards Para 4.09 (v) of Foreign Trade Policy 2023 which mandates 25% minimum value addition in the case of spices. It is clarified that the condition of minimum value addition of 25% in the case of spices is applicable only where both export as well as import items pertain to Chapter 9 of ITC HS Code.
This issues with the approval of the Competent Authority.
(K.M. Harilal)
Jt. Director General of Foreign Trade
(Issued from file no. 01/94/180/021/AM24/PC-4)
