The Foreign Trade Policy is the framework of strategy or the set of guidelines introduced by the Government of India to promote the export of goods/services from the country and generate employment by encouraging foreign trade. The Policy is notified by the Ministry of commerce and industry for the period of 5 years and updated on 31st March every year and comes to effect on 1st April. “The existing FTP 2015-20 which is valid up to September 30, 2022 is extended up to March 31, 2023. Notification in this regard was issued by the Directorate General of Foreign Trade (DGFT).
Before the Foreign Trade Policy 2015-20, there were 5 different incentive schemes in the country. The schemes included the Focus Product Scheme, Focus Market Scheme, Market Linked Focus Product Scheme, Agricultural Infrastructure Incentive Scheme, Vishesh Krishi.
These schemes were abolished and under the policy, only 2 schemes have been maintained. Merchandise Export from India Scheme (for goods) and Service Exports from India Scheme (for services).
MERCHANDISE EXPORTS FROM INDIA SCHEME (MEIS)
The scheme is available for manufacture and exports of notified goods/products with ITC (HS) Code, to notified markets under Appendix 3B. It also lists the rate(s) of rewards on various notified products [ITC (HS) code wise]. The reward is calculated based on the realized FOB value of exports in free foreign exchange, or as given in shipping bills in freely convertible foreign currencies, whichever is less, unless otherwise specified. This scheme has been withdrawn and MEIS benefits availed only up to 31.12.2020 and last date of filing of this scheme 31.08.2022.
SERVICES EXPORTS FROM INDIA SCHEME (SEIS)
The scheme was launched to promote service exports of notified services from India. The list of notified services and rates of rewards is available in Appendix 3D/3X on net foreign exchange earned. Payment in Indian rupees for specified services shall be treated as deemed foreign exchange according to RBI guidelines. The list of these services is available in Appendix 3E.
SEIS offers reward @ 3 or 5% of net foreign exchange earned, and is only available for Mode 1 and Mode 2 services.
The schemes shall come into force with effect from the date of notification of this Policy, i.e. the rewards under SEIS shall be admissible for services rendered on or after the date of notification of this Policy.
REMISSION OF DUTIES AND TAXES ON EXPORT PRODUCTS (RODTEP)
Government of India announce a new scheme as RoDTEP stands for Remission of Duties and Taxes on Export Products. It is an applicable with effect from January 1st, 2021, formed to replace the MEIS (Merchandise Export from India Scheme). It also lists the rate(s) of rewards on various notified products (8555 Nos). The reward is calculated Product based % is yet to be notified. The notified rates under the RoDTEP scheme for several sectors include the rates at 0.5%, 1.4%, 2.4% and 4%. The scheme will ensure that the exporters receive the refunds on the embedded taxes and duties previously non-recoverable.
STATUS HOLDER CERTIFICATE
The main objective of foreign trade policies is to make the import-export process simple and attractive for importers, exporters, and traders. There are various export promotion schemes, and Status Holder Certificate is one of them. The Objective of the Export House Certificate or Status Holder Certificate is to boost export performance. As per the updates to the Foreign Trade Policy of 2015-2020, exporters are assigned status holder positions by their export performance. The existing valid up to June 30, 2022 is extended up to March 31, 2023. Public Notice in this regard was issued by the Directorate General of Foreign Trade (DGFT).
DUTY EXEMPTION / REMISSION SCHEMES
Schemes under this Chapter enable duty free import of inputs for export production, including replenishment of input or duty remission.
(a) Duty Exemption Schemes.
(i) Advance Authorisation (AA), Advance Authorisation for Annual (AAA), Special Advance
Authorisation (SAA) for export of Articles of Apparel and Clothing accessories
(ii) Duty Free Import Authorisation (DFIA).
(b) Duty Remission Scheme.
(i) Duty Drawback (DBK) Scheme, administered by Department of Revenue.
(c) Scheme for Rebate on State and Central Taxes and Levies (RoSCTL), as notified by the Ministry of Textiles on 07.03.2019, and implemented by the DGFT.
(d) Scheme for Rebate of State Levies (RoSL), as notified in para 6.3 of Ministry of Textiles Notification No. 14/26/2016-IT (Vol-II) dated 07.03.2019 and as amended vide Notification No. 12015/11/2020-TTP Dated 09.06.2020 will be implemented by the DGFT in scrip mode, for which procedures will be laid Down separately.
The Authorisation under this Chapter shall be issued in accordance with the Policy and Procedures in force on the date of issue of the Authorisation.
EXPORT PROMOTION CAPITAL GOODS (EPCG) SCHEME
The EPCG Scheme is to facilitate import of capital goods for producing quality goods and services and enhance India’s manufacturing competitiveness.
EPCG Scheme allows import of capital goods (except those specified in negative list in Appendix 5F) for pre-production, production and postproduction at zero customs duty. Capital goods imported under EPCG Authorisation for physical exports are also exempt from IGST.
Imported capital goods shall be subject to Actual User condition till export obligation is completed and EODC is granted.
The Authorisation under this Chapter shall be issued in accordance with the Policy and Procedures in force on the date of issue of the Authorisation.
EXPORT ORIENTED UNITS (EOUs), ELECTRONICS HARDWARE TECHNOLOGY PARKS (EHTPs), SOFTWARE TECHNOLOGY PARKS (STPs) AND BIO-TECHNOLOGY PARKS (BTPs)
Units undertaking to export their entire production of goods and services(except permissible sales in DTA), may be set up under the Export Oriented Unit (EOU) Scheme, Electronics Hardware Technology Park (EHTP) Scheme, Software Technology Park(STP) Scheme or Bio-Technology Park (BTP) Scheme for manufacture of goods, including repair, re-making, reconditioning, re-engineering, rendering of services, development of software, agriculture including agro-processing, aquaculture, animal husbandry, bio-technology, floriculture, horticulture, pisciculture, viticulture, poultry and sericulture. Trading units are not covered under these schemes. These schemes are to promote exports, enhance foreign exchange earnings, and attract investment for export production and employment generation.
DEEMED EXPORTS
To provide a level-playing field to domestic manufacturers in certain specified cases, as may be decided by the Government from time to time.
Purpose of this FTP refer to those transactions in which goods supplied do not leave country, and payment for such supplies is received either in Indian rupees or in free foreign exchange. Supply of goods as specified in Paragraph 7.02 below shall be regarded as “Deemed Exports” provided goods are manufactured in India. The benefits of GST and conditions applicable for such benefits would be as specified by the GST Council and as per relevant rules and notification.
Supply of goods under following categories (a) to (d) by a manufacturer and under categories (e) to (h) by main / sub-contractors shall be regarded as “Deemed Exports” as per para 7.02. Eligibility for any / all of following benefits in respect of manufacture and supply of goods, qualifying as deemed exports, subject to terms and conditions as given in HBP and ANF-7A:
