HIGHLIGHTS OF THE FOREIGN TRADE POLICY 2015-2020

A. SIMPLIFICATION & MERGER OF REWARD SCHEMES 

Export from India Schemes:

1. Merchandise Exports from India Scheme (MEIS)

• Earlier there were 5 different schemes (Focus Product Scheme, Market Linked Focus Product Scheme, Focus Market Scheme, Agri. Infrastructure Incentive Scrip, VKGUY) for rewarding merchandise exports with different kinds of duty scrips with varying conditions (sector specific or actual user only) attached to their use. 
• Now all these schemes have been merged into a single scheme, namely Merchandise Export from India Scheme (MEIS) and there would be no conditionality attached to the scrips issued under the scheme. 
• The main features of MEIS, including details of various groups of products supported under MEIS and the country groupings are at Annexure-1.
• Rewards for export of notified goods to notified markets under ‘Merchandise Exports from India Scheme (MEIS) shall be payable as percentage of realized FOB value (in free foreign exchange). 
• The debits towards basic customs duty in the transferable reward duty credit scrips would also be allowed adjustment as duty drawback. 
• At present, only the additional duty of customs / excise duty / service tax is allowed adjustment as CENVAT credit or drawback, as per Department of Revenue rules.

2. Service Exports from India Scheme (SEIS) 

•  Served From India Scheme (SFIS) has been replaced with Service Exports from India Scheme (SEIS). SEIS shall apply to ‘Service Providers located in India’ instead of ‘Indian Service Providers’. 
• Thus SEIS provides for rewards to all Service providers of notified services, who are providing services from India, regardless of the constitution or profile of the service provider. 
• The list of services and the rates of rewards under SEIS are at Annexure-2. 
• The rate of reward under SEIS would be based on net foreign exchange earned. 
• The reward issued as duty credit scrip, would no longer be with actual user condition and will no longer be restricted to usage for specified types of goods but be freely transferable and usable for all types of goods and service tax debits on procurement of services / goods. 
• Debits would be eligible for CENVAT credit or drawback.

3. Chapter -3 Incentives -(MEIS & SEIS) to be available for SEZs 

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

4. Duty credit scrips to be freely transferable and usable for payment of custom duty, excise duty and service tax.

5. Concept of Status Holders

• Approved Exporter Scheme - Self certification by Status Holders
• BOOST TO "MAKE IN INDIA"
• TRADE FACILITATION & EASE OF DOING BUSINESS

6. Online filing of documents/ applications and Paperless trade in 24x7 environment.

7. Online inter-ministerial consultations

8. Simplification of procedures/processes, digitisation and e-governance

9. Forthcoming e-Governance Initiatives

          DGFT is currently working on the following EDI initiatives: 

• (i) Message exchange for transmission of export reward scrips from DGFT to Customs. 
• (ii) Message exchange for transmission of Bills of Entry (import details) from Customs to DGFT. 
• (iii) Online issuance of Export Obligation Discharge Certificate (EODC). (iv) Message exchange with Ministry of Corporate Affairs for CIN & DIN. 
• (v) Message exchange with CBDT for PAN. 
• (vi) Facility to pay application fee using debit card / credit card. 
• (vii) Open API for submission of IEC application. 
• (viii) Mobile applications for FTP 

10. New initiatives for EOUs, EHTPs and STPs

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

12. Facilitating & Encouraging Export of Defence Exports

13. e-Commerce Exports

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

15. Additional Ports allowed for Export and import

16. 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. 

17. Quality complaints and Trade Disputes

18. Vishakhapatnam and Bhimavaram added as Towns of Export Excellence.

Comment on FTP-2015-20

The new foreign trade policy aims to double India’s exports to $900 billion by 2020. To achieve this target, the exports need to grow at about 14% every year. This growth is a function of global recovery, which seems to be distant at present. However, the policy must be lauded for its recognition that exports cannot be made competitive just by throwing sops for exporters. The government has made the duty free scrips freely transferable as per the global norms. This would be used by exporters to pay indirect taxes and duties and will be available to SEZs too. Further, the Export obligation under the Export Promotion Capital Goods Scheme has also been reduced, ostensibly to give a boost to “Make in India”. All these are efforts towards making exports more competitive. What India needs to do is to raise the share of manufacturing in its economy and promote exports of manufactured goods. Towards this direction, the government needs to slash and rationalize import duties further.