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Introduction: The Directorate General of Foreign Trade (DGFT), under the Ministry of Commerce and Industry, Government of India, has issued Policy Circular No. 10/2023-2024 on 22nd February 2024, introducing relief measures for sectors facing a decline in exports. The circular focuses on adjusting the Average Export Obligation (EO) in alignment with the decline in total exports for specific sectors, as outlined in the Handbook of Procedures (HBP) of FTP, 2023.

Detailed Analysis: Para 5.17 of the HBP, FTP 2023, forms the basis for providing relief to exporters in sectors where there is a decline of more than 5% in total exports compared to the previous year. The circular specifies that the Average EO for the year may be reduced proportionately to the reduction in exports of the particular sector or product group during the relevant year compared to the preceding year.

An annexed list within the circular details the product groups that experienced a percentage decline in exports during 2022-23 compared to 2021-22. Regional Authorities are directed to re-fix the Annual Average EO for EPCG Authorizations for the year 2022-23 accordingly. Reductions in EO should be properly endorsed in the license file of the Office of RA and in the amendment sheet issued to the EPCG Authorization holder.

While processing requests for the discharge of EO, Regional Authorities are instructed to consider earlier Policy Circulars under specific paras of HBP, emphasizing a comprehensive approach before issuing demand notices or EODC.

Conclusion: DGFT’s Policy Circular No. 10/2023-2024 reflects the government’s proactive stance in supporting sectors facing export decline. By providing relief in Average Export Obligation, the circular acknowledges the challenges exporters may face and seeks to mitigate their economic impact. The directive to Regional Authorities to consider previous Policy Circulars ensures a holistic evaluation, aligning with the government’s commitment to fostering a conducive environment for trade.

This circular serves as a guide for exporters and authorities, outlining the steps to be taken in response to export decline in specific sectors. The email contact provided in the circular facilitates communication and clarification for stakeholders affected by these adjustments. Overall, this policy initiative demonstrates the government’s responsiveness to the evolving economic landscape, promoting adaptability and resilience in India’s foreign trade policies.

***

Government of India
Ministry of Commerce and Industry
Department of Commerce
(Directorate General of Foreign Trade)
Vanijya Bhawan, New Delhi
Web Site: http://dgft.gov.in
****

Policy Circular No. 10/2023-2024- DGFT | Dated 22nd February, 2024

To,

All Regional Authorities of DGFT/

All Customs Authorities

Subject: Relief in Average Export Obligation in terms of the para 5.17(a) of Hand Book of Procedures (HBP) of FTP, 2023.

The para 5.17 of the Handbook of Procedures of the FTP, 2023 envisages that to provide relief to exporters of those sectors where total exports in that sector/product group has declined by more than 5% as compared to the previous year, the Average Export Obligation (EO) for the year may be reduced proportionate to reduction in exports of that particular sector/product group during the relevant year as against the preceding year. This implies that the sector/product group that witnessed such decline in 2022- 23 as compared to 2021-22 would be entitled for such relief.

2. A list of product groups showing the percentage decline in exports during 2022-23 as compared to
2021-22 is Annexed.

3. All Regional Authorities are requested to re-fix the Annual Average EO for EPCG Authorizations for the year 2022-23 accordingly. Reduction, if any, in the EO should be appropriately endorsed in the licence file of the Office of RA as also in the amendment sheet to be issued to the EPCG Authorisation holder.

4. Regional Authorities while considering requests of discharge of EO will ensure that in case of shortfall in EO fulfilment, Policy Circulars issued earlier in terms of Para 5.11.2 of HBP, 2009-14 and Para 5.19 of HBP, 2015-20 are also considered before issuance of demand notice, EODC etc. This stipulation should be part of Check-Sheet for the purpose of EODC.

5. This issues with the approval of Director General of Foreign Trade.

Encl: As mentioned above.

(Randheep Thakur)
Joint Director General of Foreign Trade
Tel. No. 011-2303 8731
E-mail: randheep.thakur@gov.in

(Issued from File No. 18/33/AM-24/P-5)

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