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FTP – FOREIGN TRADE POLICY 2012-13

(W.E.F. 06TH JUNE 2012)

Presentation on Highlights of

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FOREIGN TRADE POLICY 2012-13

Exporters will be henceforth permitted to give single revolvingBank Guarantee for different transactions

New e-BRC INITIATIVE: A MAJOR EDI INITIATIVE: Anextremely challenging and significant EDI initiative, e-BRC hasbeen launched by DGFT. e-BRC would herald electronictransmission of Foreign Exchange Realization from therespective Banks to the DGFT server on a daily basis. Exporterwill not be required to make any request to bank for issuance ofBank Export and Realization Certificate (BRC). This will establisha seamless EDI connectivity amongst DGFT, Banks andExporters. e-BRC would facilitate early settlement and release ofFTP incentives / entitlements. This is a significant step to reducetransaction cost to the exporters

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FOREIGN TRADE POLICY 2012-13

SEARCH BASED ITC (HS) ON DGFT WEBSITE

DGFT has published a new, updated, ITC (HS) classification ofExport and Import items. On the DGFT website(http://dgft.gov.in), a facility has been provided to search / enquire about the current Import Policy of an item by enteringeither ITC (HS) Code of that item or brief description of that item.

This would be of major help to trade and industry as well toacademicians and researchers.

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FOREIGN TRADE POLICY 2012-13

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FOREIGN TRADE POLICY 2012-13

Removal of Scrap / Waste from SEZ

A SEZ unit/Developer/ Co-developer may be allowed to dispose offin DTA, any waste or scrap, including any form of metallic wasteand scrap, generated during manufacturing or processing activity,

without an authorization, on payment of applicable Customs Duty,provided these are freely importable.

Exemption from Service Tax in SEZ

Units in SEZ shall be exempted from service tax.

3 new towns are being declared as Towns of Export Excellence(TEE). These are Ahmedabad (Textiles), Kolhapur (Textiles), andShaharanpur (Handicrafts)

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FOREIGN TRADE POLICY 2012-13

PROMOTIONAL MEASURES IN DEPARTMENT OF COMMERCE

Creation of new Export Promotion Industrial Parks/Zones (SEZs/Agri.Business Zones) and augmenting facilities in the existing ones.Setting up of electronics and other related infrastructure in export

conclave.Equity participation in infrastructure projects including the setting up ofSEZs.Meeting requirements of capital outlay of EPIPs/EPZs/SEZs.Development of complementary infrastructuresuch as, roads connecting the production centers with the ports,setting up of Inland Container Depots and Container Freight Stations.Stabilizing power supply through additional transformers andislanding of export production centre etc.Development of minor ports and jetties to serve export purpose.Assistance for setting up Common Effluent

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FOREIGN TRADE POLICY 2012-13

EXPORT AND TRADING HOUSES

Eligibility for Export and Trading Houses Status Merchant as well asManufacturer 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)shall be eligible for recognition as a status holder.

Status Category Status recognition depends upon exportperformance. An applicant shall be categorized as status holder upon

achieving export performance indicated in table below. The exportperformance will be counted on the basis of FOB value of exportproceeds realized during current plus previous three years (takentogether).For Export House (EH) Status, export performance isnecessary in at least two out of four years.

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FOREIGN TRADE POLICY 2012-13

Status CategoryExport Performance

Export House (EH)

Star Export House (SEH)

Trading House (TH)

Star Trading House (STH)

Premier Trading House (PTH)

FOB / FOR Value(Rupees in Crores)

20

100

500

2500

7500

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FOREIGN TRADE POLICY 2012-13

     1  2005-2006  25.35 2  2006-2007  158.58 3  2007-2008  620.53 4  2008-2009  804.08 5  2009-2010  2096.98    

The above table shows our export performance. We can apply for Export House Status

A Star Export House shall be eligible for the following facilities:

Licence/certificate/permissions and Customs clearances for both imports andexports on self-declaration basis.

Fixation of Input-Output norms on priority within 60 days;Exemption from compulsory negotiation of documents through banks. Theremittance, however, would continue to be received through banking channels;100% retention of foreign exchange in EEFC account;Enhancement in normal repatriation period from 180 days to 360 days.Entitlement for consideration under the Target Plus SchemeExemption from furnishing of Bank Guarantee in Schemes under this Policy.

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FOREIGN TRADE POLICY 2012-13

FOCUS MARKET SCHEME (FMS)

Objective of FMS is to offset high freight cost and other externalities toselect international markets with a view to enhance India’s export

competitiveness in these markets.

Ineligible Exports Categories / Sectors for FMSThe following categories of export products / sectors shall be ineligiblefor Duty Credit Scrip, under FMS:

Supplies made to SEZ units;Service Exports;

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FOREIGN TRADE POLICY 2012-13

DUTY ENTITLEMENT PASSBOOK (DEPB) SCHEME

The DEPB Scheme stands discontinued in respect of exports made onor after 1.10.2011. Component of Special Additional Duty shall also beallowed under DEPB (as brand rate) in case of non-availment ofCENVAT credit. Neutralisation shall be provided by way of grant of duty

credit against export product.

An exporter may apply for credit, at specified percentage of FOB valueof exports, made in freely convertible currency. In case of supply by aDTA unit to a SEZ unit / SEZ Developer/Co- developer, an exporter may

apply for credit for exports made in freely convertible currency orpayment made from foreign currency account of SEZ Unit/SEZDeveloper/Co-Developer. In addition, the exporter shall also be entitledfor DEPB benefit in case payment is made in Indian Rupees by SEZDeveloper/Co-Developer for supplies received w.e.f 10.2.2006.

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