EXIM FACILITATION MEASURES ANNOUNCED BY DGFT
Date : 28 Jan 2004
Location : New Delhi
The Directorate General of Foreign Trade (DGFT), Department of Commerce, through a series of measures announced today has made sincere efforts to fine tune the 2002-07 EXIM Policy so as to consolidate & accelerate incremental growth rate of exports and make India a manufacturing hub for producing quality goods & services. These pathbreaking EXIM facilitation initiatives coupled with the ballooning foreign exchange reserves, upgradation of India’s international credit rating and the increasing confidence of the international markets in the Indian economy will not only enhance international competitiveness and acceptability of Indian exports but also lead to focussed international investment in areas of India’s core competence.
Far reaching announcements like allowing Capital Goods (CG) imports, based on a Chartered Engineer’s certificate for establishing nexus with the export product under Export Promotion Capital Goods (EPCG) scheme without the need for an examination by an Expert Committee and permitting exports of alternate products and services made by Group Companies for the purpose of discharge of export obligation under EPCG scheme will help create additional export markets, enhance operational efficiency of the exporting community, remove procedural impediments and help expand the manufacturing base in the country. Re-determination of Export Obligation of the past EPCG licences on the principle of 8 times the duty saved instead of 5 times the CIF value will go a long way in correcting the distortion of the past EPCG licence holders vis-à-vis the licensees under the present liberalised Policy. Facility of clubbing of EPCG licences for discharge of export obligation and import of spare refractories, catalyst and consumables under EPCG has also been allowed.
To offset the high power costs faced by the manufacturing industry, duty free fuel will be allowed to be imported with actual user condition under Duty Free Replenishment Certificate (DFRC) scheme. The extension of new benefits relating to Advance Licence for intermediate supplies under Duty Free Replenishment Certificate (DFRC) scheme, facility of grant of export obligation period extension and revalidation facility for Advance Licence for annual requirements being availed by Status Holders, reduction in payment of composition fee for extension of Export Obligation & linking it to duty saved amount and re-introduction of Advance Licence for free of cost material will go a long way in meeting the demands of the industry.
Some of the procedural bottlenecks relating to ‘deemed exports’ benefits have been removed through procedural simplifications. Deemed export benefits for items attracting Zero percent basic Customs duty shall be granted. Deemed export facility shall also be extended to Fertiliser & Refinery projects spilled over from 8th and 9th Plan periods. To reduce transaction costs, fixation of Drawback brand rates for deemed exports has been decentralised and delegated to DGFT regional offices.
Equity base of ECGC is being raised from Rs 500 crores to Rs 800 crores to help the Indian exporters in better risk management. In addition, to underwrite high value projects being implemented by Indian companies abroad, a National Export Insurance Account is being created for ECGC. Details are being worked out in consultation with Ministry of Finance.
A Gold Card Scheme for credit worthy exporters with good track record is also being finalised by RBI to enable them to obtain export credit without difficulty. This would ensure easy availability of export credit to Indian exporters at best terms and enhance the competitiveness of Indian goods and services.
To promote export related infrastructure, rupee payments received for Port handling services shall be counted for discharge of export obligation under EPCG scheme. Import of Prototypes shall be also allowed to Actual Users for R & D purposes without any limit (presently restricted to 10 Nos. per annum). Annual ceiling on export of Gifts has been raised from Rs One Lakh to Rs Five Lakhs.
In a significant move, the Government has also liberalised the import of Gold and Silver. This will provide freedom to procure inputs by jewellery exporters and add to the cost competitiveness of the Indian jewellery exports. Non tariff barriers applicable on imports for export production have also been rationalised for food & textile items.
Increased focus has also been made on procedural simplification by introducing E-Commerce initiatives like Digital Signature, Electronic Fund Transfer & Message exchange with community partners like Customs, Banks etc. All these will not only reduce transaction costs for the exporting community but also impart greater transparency and reduce discretion while availing various benefits under the EXIM Policy.