Highlights of FTP: 2015-20

Pleased to inform you that the Government of India, Ministry of Commerce and Industry has announced New Foreign Trade Policy 2015-20 on 01.04.2015 with an objective to provide stable and sustainable policy environment for Foreign Trade in merchandise and services, to link incentives for export and import with other initiatives such as “Make in India”, Digital India, skills India, to create an export promotion mission for India. To promote the diversification of India’s export by helping various sectors of the Indian economy. To gain global competiveness with view to expanding its market and better integrating with major regions thereby increasing the demand for Indian’s products and contributing to the Make In India initiatives and to provide a mechanism for regular appraisal in order to rationalize import and reduce trade imbalance.

Please find hereunder the Highlights of the new Foreign Trade Policy 2015-2020. We trust you will find this informative and useful for your professional endeavors.

1.   Merchandise Exports from India Scheme (MEIS): Now 5 different earlier schemes (Focus Product Scheme, Market Linked Focus Product Scheme, Focus Market Scheme, Agri. Infrastructure Incentive Scrip, VKGUY) have been merged into a single scheme, namely Merchandise Export from India Scheme (MEIS).Incentives under this scheme is available on Exports of notified goods to Notified Markets at notified rates.

In order to avail this benefit all exporters are advised to declare on all shipping bills from 01.06.2015 onwards mandatorily as “we intent to claim rewards under Merchandise Exports from India Scheme (MEIS)”.

2. Service Exports from India Scheme (SEIS): Served from India Scheme (SFIS) has been replaced with Service Exports from India Scheme (SEIS).Now, all Service providers located in India and earning foreign exchange, regardless of the constitution or profile of the service provider, who is exporting notified services, would be eligible for this benefits at the rate of 3% or 5% of Net foreign exchange earnings.

The reward issued as Duty Credit Scrip under this scheme and goods imported by using this scrip will be freely transferable and usable for all types of goods/services for payment of custom duty, excise duty and service tax.

3. Chapter -3 Incentives (MEIS & SEIS) now is available to units located in SEZs also.

4. Status Holders: The nomenclature of Export House, Star Export House, Trading House, Star Trading House, Premier Trading House certificate has been changed to One, Two, Three, Four, Five Star Export House. And the criteria for export performance for recognition of status holder have also been changed from Rupees to US dollar earnings.  
 

5. BOOST TO "MAKE IN INDIA" Reduced Export Obligation (EO) for domestic procurement under EPCG scheme, to 75% of normal export obligation      (Normal EO is 6 times of duty saved amount) in order to promote domestic capital goods manufacturing industry. 

6. Online filing of documents/ applications: - Now, hardcopies of applications and specified documents would not be required to be submitted to RA, under Chapter 3 & 4 of FTP. In new system all relevant documents to be uploaded by CA/CS/CWA digitally.

7.  Simplification of procedures/processes, digitization and e-governance

• Under EPCG scheme, obtaining and submitting a certificate from an independent Chartered Engineer, confirming the use of spares, tools, refractory and catalysts imported for final redemption of EPCG authorizations has been dispensed with.

• Now the EPCG Authorization Holders shall be required to maintain records for a period of two years only after redemption of Authorizations.

• Exporter Importer Profile: Facility has been created to upload documents in Exporter/Importer Profile. There will be no need to submit copies of permanent records/ documents (e.g. IEC, Manufacturing license, RCMC, PAN Etc.) repeatedly with each application, once uploaded.

• Communication with Exporters/Importers: Certain information, like mobile number, e-mail address etc. has been added as mandatory fields, in IEC data base. This information once provided by exporters, would help in better communication with exporters. SMS/ email would be sent to exporters to inform them about issuance of authorizations or status of their applications

•  Online message exchange with CBDT and MCA: It has been decided to have on line message exchangewith CBDT for PAN data and with Ministry of Corporate Affairs for CIN and DIN data. This integration would obviate the need for seeking information from IEC holders for subsequent amendments/ updation of data in IEC data base.

•  Communication with Committees of DGFT: For faster and paperless communication with various committees of DGFT, dedicated e-mail addresses have been provided to each Norms Committee, Import Committee and Pre-Shipment Inspection Agency for faster communication.

8.  Other new Initiatives

• EOUs, EHTPs, STPs have been allowed to share infrastructural facilities among themselves.

• Inter unit transfer of goods and services have been allowed among EOUs, EHTPs, STPs, and BTPs.

• EOUs have been allowed facility to set up Warehouses near the port of export.

• STP units, EHTP units, software EOUs have been allowed the facility to use all duty free equipment/goods for training purposes.

• 100% EOU units have been allowed facility of supply of spares/ components up to 2% of the value of the manufactured articles to a buyer in domestic market for the purpose of after sale services

• At present, in a period of 5 years EOU units have to achieve Positive Net Foreign Exchange Earning (NEE) cumulatively. Because of adverse market condition or any ground of genuine hardship, then such period of 5 years for NFE completion can be extended by one year.

• LOP for setting up a 100% EOU will have an initial validity of 2 years to enable the unit to construct the plant and install the machinery. Further extension can be granted by the Development Commissioner up to one year. Extension beyond 3 years of the validity of LOPS; can be granted, in case unit has completed 2/3rd of activities, including the construction activities.

• Procedure for the deboning/exit of the STP/EHTP simplified.

• EOU HAVING EXPORT TURNOVER OF Rs.10Crore or more are allowed to issue the pre authenticated procurement certificate from the Customs/Excise.

9. Facilitating & Encouraging Export of dual use items (SCOMET).

• Validity of the SCOMET authorization has been extended from the present 12 months to 24 months.

• Verification of End User Certificate (EUC) is being simplified if SCOMET item is being exported under Defense Export Offset Policy.

• Export obligation period for the defense items under the Advance Authorization will be 24 months or contracted duration of the exporter whichever is later.

10.E-Commerce Exports  

• Goods falling in the category of handloom products, books / periodicals, leather footwear, toys and customized fashion garments, having FOB value up to Rs.25000 per consignment (finalized using e-Commerce platform) shall be eligible for benefits under FTP.

• Such goods can be exported in manual mode through Foreign Post Offices at New Delhi, Mumbai and Chennai.

• Export of such goods under Courier Regulations shall be allowed manually on pilot basis through Airports at Delhi, Mumbai and Chennai as per appropriate amendments in regulations to be made by Department of Revenue. Department of Revenue shall fast track the implementation of EDI mode at courier terminals.

11. Duty Exemption 

• Imports against Advance Authorization shall also be eligible for exemption from Transitional Product Specific Safeguard Duty.

• In order to encourage manufacturing of capital goods in India, import under EPCG Authorization Scheme shall not be eligible for exemption from payment of anti-dumping duty, safeguard duty and transitional product specific safeguard duty.

12.  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.

13. Duty Free Tariff Preference (DFTP) Scheme

• India has already extended duty free tariff preference to 33 Least Developed Countries (LDCs) across the globe. This is being notified under FTP.

14. Quality complaints and Trade Disputes

• 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.

•  Highlights For resolving such disputes at a faster pace, a Committee on Quality Complaints and 18 Trade Disputes (CQCTD) is being constituted in 22 offices and would have members from EPCs/FIEOs/APEDA/EICs.

15. 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.