After the issuance of Annual Supplement of the Foreign Trade Policy 2009-14, the Government maintained a close watch on the exports, especially of those sectors, which were badly hit by recession in the developed world. The Government observed that while the exports have generally shown a rising trend during last few months, certain sectors were still not performing well. To enhance competitiveness for products which are labour/ technology intensive, the Government has announced further export incentives to more than 600 products. Certain procedural simplifications have been announced to help trade facilitation and reduction of transaction costs. Special initiatives for pharmaceutical sector were also announced.

Highlights of the amendments are summarised below:

Initiatives for pharma sector

•        To facilitate fixation of SIONs for pharma products covered by process patents but out of product patents, a new facility of input combination will be provided. Such products if manufactured through non-infringing process would be allowed actual quantum of duty free inputs required.

•        Exporters of pharmaceutical products will be required to affix barcodes on their export products, with effect from 1 July 2011, as per GS 1 global standards, to facilitate tracing and tracking of their products.

Amendments in existing schemes

Focus Product Scheme (‘FPS’)

•        Additional benefit of 2 percent of duty credit entitlement, over and above the existing benefit of 2 percent or 5 percent has been provided for 147 products like engineering items (galvanized flanges of iron and steel, threaded nuts), electrical items like co¬axial cables and other co-axial electric conductors, watches, stationery items, textile items of silk, handmade carpets and tyre cord fabrics.

•        New products have been added to the existing list under FPS, in the category of engineering products, chemicals, paper products, textile products, rubber products, plastic products etc. These will get benefits at the rate of 2 percent of FOB value of exports to all markets.

Market Linked Focus Product Scheme (‘MLFPS’)

New products have been notified which will be eligible for benefits at the rate of 2 percent of FOB value of exports to specified countries as under:

•        Products like agricultural tractors of more than 1800 cc, inorganic chemicals etc for exports to 15 specified markets viz., Algeria, Egypt, Kenya, Nigeria, Tanzania, South Africa, Ukraine, Mexico, Brazil, Australia, New Zealand, Cambodia, Vietnam, China and Japan.

•        All items covered under Chapter 63 of ITC HS like articles of textile including blankets, bed linen etc exported to 27 Countries of European Union.

Vishesh Krishi Gram Udyog Yojana (‘VKGUY’)

•        New products added like castor oil meal-defatted variety and instant coffee for benefits at the rate of 5 percent of FOB value of exports to all markets.

Procedural simplification

Additional facility of filing “on-line” application for obtaining Importer Exporter Code (‘IEC’)

•        In order to minimise human interface and make the application for IEC simple, an additional facility of filing “on-line” application for obtaining IEC is being introduced. The facility is made available on the Director General of Foreign Trade’s website.

Export obligation period in specified cases of advance authorizations counted from the date of clearance of each consignment

•        With a view to provide greater flexibility, export obligation period in specified cases of advance authorizations like drugs (with specific export order and pre-import condition), spices, silk etc shall be counted from the date of clearance of each consignment and not the first consignment.

Technical characteristics/ quality etc of certain specified items is now required to be declared at the time of clearance of import consignment for annual advance authorization

•        For certain specified items of imports like alloy steel, synthetic rubber, solvent, perfumes! essential oils etc, technical characteristics/ quality etc shall be required to be declared at the time of clearance of import consignment and not at the time of filing application for annual advance authorization to Regional Authority.

Advance authorization for Annual Requirement enlarged to allow five authorizations in a licensing year

•        Advance authorization for Annual Requirement is being enlarged to allow upto five authorizations in a licensing year instead of only one at present for the product(s) falling within the same product group.

Conclusion

The sops announced for exporters focus on targeting additional exports from India through various incentives and facilitation measures. The incentives announced are a welcome move for improving the competitiveness of our exports at a time when there is a weak economic recovery in the developed countries and consequent slower demand.

Source: Public Notice No.21 (RE-2011)/ 2009-2014 dated 10 January 2011; Public Notices No.29/ 2009-14 (RE – 2010), 30/ 2009-14 (RE – 2010) 31/ 2009-1 4 (RE – 2010) dated 14 February 2011; Public Notice No. 33/ 2009-1 4 (RE – 2010) dated 15 February 2011; Policy Circular No.10/ 2009-2014 (RE-2010) dated 31 December 2011; Policy Circular No.19/ 2009-2014 (RE – 2010) dated 14 February 2011

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