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Foreign Trade Policy Made Easy - 2023

The Foreign Trade Policy 2023 represents a critical turning point in the development and growth of India's trade sector. It is unique in its enduring commitment, given that the government has not set an end date, underlining its significance in shaping the course of the country's import-export landscape indefinitely. Traditionally, FTPs were designated for a five-year period, as with the 2015-2020 policy. However, the effects of the Covid-19 pandemic necessitated a departure from this tradition, leading to the delayed, yet thorough crafting of the FTP 2023. This enduring policy underscores the government's commitment to fostering a robust, adaptable, and resilient trade environment, capable of weathering unforeseen challenges while capitalizing on emerging opportunities. As such, the FTP 2023 can be seen not just as a policy, but a long-term strategy designed to strengthen and sustain the growth and competitiveness of India's trade sector.

When dealing with the Foreign Trade Policy (FTP), there are several practical questions that one must consider:

1. Understanding the Policy: Do you fully comprehend the various provisions of the FTP and how they apply to your business? Are you familiar with the specific policy language and terminology used?
2. Compliance: Are your business practices compliant with the FTP? Are you aware of the legal and regulatory obligations under the policy, and have you taken the necessary steps to meet these requirements?
3. Incentives and Schemes: Are you aware of the various incentives, schemes, and concessions available under the FTP that could benefit your business? Do you know how to access and apply for these incentives?
4. Updates and Changes: Are you keeping up to date with changes and updates to the FTP? Changes in the policy can have significant impacts on your business operations.
5. Export and Import Regulations: Do you understand the specific import and export regulations that apply to your industry and products? Are you aware of the necessary documentation, procedures, and compliance measures?
6. Dispute Resolution: Are you familiar with the dispute resolution mechanisms available under the FTP in case of trade disputes or quality complaints?

Chapter 1: Legal Framework and Trade Facilitation

This chapter encapsulates the operationalization of the Foreign Trade Policy (FTP). It details obligations for recognized exporters, the Status Holders, to impart skills and mentorship in international trade, and addresses MSME trade-related grievances through an Inter-Ministerial Committee. Further, the DGFT's Citizen's Charter and e-governance initiatives assure transparency and efficiency in service delivery. The chapter also outlines the process for Status Holder Certification. Ultimately, the chapter is a testament to our commitment to implementing the FTP in a simple, transparent, and digitally compatible manner, fostering an environment of growth and dynamism in foreign trade.

1. Status Holders: These seem to be exporters recognized under the Foreign Trade Policy (FTP). They are entitled to various benefits, such as exemption from certain bank guarantees, establishment of Export Warehouses, self-certification of their goods as originating from India, and more. The document also states that Status Holders are required to provide skill training in international trade, with the number of trainees depending on their status level.

Skilling and Mentorship Obligations This section refers to the responsibility of Status Holders (export houses) to contribute to the skill development of new professionals in international trade. The number of trainees each Status Holder is expected to mentor each year depends on their status level.

 

For example, based on their status level, each Status Holder is expected to train a certain number of trainees in international trade skills per year. Specifically, a Two Star Export House would be required to mentor 5 trainees, while a Three Star Export House would shoulder the responsibility of training 10 individuals. On the other hand, a Four Star Export House is expected to guide 20 professionals, and the top-tier, a Five Star Export House, would be required to train a substantial 50 people per year. The training program should run for at least six weeks, with the Status Holder given the discretion to determine eligibility requirements, selection criteria, and the training curriculum

 

2. Inter-Ministerial Committee for MSME Trade related grievances: An inter-ministerial committee is to be set up to address trade-related grievances from Micro, Small and Medium Enterprises (MSMEs).

This section refers to the establishment of an inter-ministerial committee tasked with examining trade-related grievances from Micro, Small, and Medium Enterprises (MSMEs) that have implications on policy.

 

For example, if a small business is facing difficulties exporting due to a certain trade policy, they could file a grievance with this committee. The committee would then review the issue and potentially recommend policy changes to resolve the problem. The goal of the committee is to expedite decision making and provide a holistic approach to solving trade-related grievances.

3. Citizen's Charter: The Directorate General of Foreign Trade (DGFT) has a Citizen's Charter in place to provide time schedules for various services to clients.

The Citizen’s Charter of the DGFT outlines the timeframes in which the DGFT promises to provide various services to its clients. This allows businesses to know when they can expect their applications to be processed.

 

For example, if a business submits an application for an export license, the Citizen's Charter may specify that the DGFT aims to process these applications within a certain number of days. The exact timeline for disposal of an application is given in Chapter 11 of the Handbook of Procedures (HBP).

4. E-governance of Foreign Trade in DGFT: The DGFT has taken various IT initiatives for easier and transparent administration of foreign trade, such as the DGFT Online Customer Portal, Exporter Importer Profile, online filing and processing of applications, and more.
5. Status Holder Certification: There are guidelines for applying for Status Certificate, its validity, maintenance of accounts and submission of annual export statement, grounds for refusal/suspension/cancellation of the certificate, and provision for appeal.
6. Objective: The document aims to implement provisions of the Foreign Trade (Development & Regulation) Act, the Rules/Orders made thereunder and the provisions of Foreign Trade Policy in a simple, transparent, and digitally compatible manner.

Inter-Ministerial Committee for MSME Trade related grievances:

The Inter-Ministerial Committee for MSME Trade related grievances is proposed to handle and examine trade-related grievances from the MSME sector that have policy implications. The purpose of this committee is to expedite decision-making through a 'whole of government approach'.

The process of applying for consideration by the Inter-Ministerial Committee, and specific timelines for doing so, are not explicitly provided in the document. Typically, such processes involve formally lodging a complaint or grievance with the relevant ministry (in this case, likely the Ministry of Micro, Small and Medium Enterprises or the Directorate General of Foreign Trade) detailing the issue and how it relates to existing policies.

For instance, suppose an MSME is facing challenges with import tariffs that make it hard to import necessary raw materials. If this issue has policy implications - for example, if the tariffs are a result of a recent policy change - they could bring their grievance to the Inter-Ministerial Committee for consideration and potential policy amendment.

Applications requiring Inter-Ministerial Consultation:

In many countries, certain items are restricted for import or export due to various reasons such as national security, environmental protection, or public health. When exporters or importers wish to trade in such items, they need to apply for a special permit or license. These applications often require consultation between different ministries or government bodies to ensure all relevant regulations and concerns are addressed.

(i) Import of Restricted Items: An example might be a pharmaceutical company that wishes to import a certain chemical compound which is restricted due to potential health risks. The company would apply for a permit, and the application might require consultation between the health ministry, the trade and industry ministry, and potentially others. The inter-ministerial consultation would balance the need for the chemical in pharmaceutical production with potential risks.

(ii) Export of Restricted Items: Suppose a manufacturing firm wants to export machinery which has dual-use potential (can be used for civilian as well as military purposes) to a foreign country. Given the sensitive nature of such items, the application would require consultations between the Ministry of Defence, Ministry of External Affairs, and Ministry of Commerce and Industry.

(iii) SCOMET Items: SCOMET stands for Special Chemicals, Organisms, Materials, Equipment, and Technologies. These items have dual-use potential or can contribute to the production of weapons of mass destruction. An example might be a biotechnology research institute that wishes to export a SCOMET-listed organism to a foreign lab. This would require consultation between various ministries to ensure that the export complies with international non-proliferation agreements.

(iv) Fixation of norms-by-Norms Committees: This is often about setting standards or rules for certain items or processes. For example, suppose a textile manufacturing industry proposes a new dyeing technique and applies for its recognition as a standard norm. The Norms Committee would consult with the environment ministry about potential pollution risks, the health ministry about worker safety, and so on.

In the proposed online environment, all these application processes and inter-ministerial consultations will be handled digitally. This means that exporters and importers will be able to apply for permits, track the status of their applications, and see the results of inter-ministerial consultations all through a single online portal. This can greatly simplify the process and increase transparency.

API stands for Application Programming Interface. It's a set of rules that allows different software applications to communicate with each other. In this context, it refers to systems that allow different governmental departments and agencies to share data and communicate with each other digitally.

Here are examples of how these API message exchanges might work:

(i) API Message Exchange with CBIC (Central Board of Indirect Taxes and Customs):

(a) Importer Exporter Code Number: This is a unique code given to every importer or exporter in the country. CBIC can verify the code through API exchange with DGFT (Directorate General of Foreign Trade).

(b) Authorizations/Scrips including of DFIA (Duty Free Import Authorization), AA (Advance Authorization), EPCG (Export Promotion Capital Goods): These are various forms of import/export authorizations and incentives. An exporter can apply for these through DGFT, and the status can be verified by CBIC via API exchange.

(c) Shipping Bills and Bills of Entry: These are documents required for export and import respectively. CBIC can access these digitally from DGFT via API exchange.

(d) RBI's EDPMS (Export Data Processing and Monitoring System) for Export Realization details: This is a system by Reserve Bank of India to monitor payments related to export deals. CBIC can access these data via API exchange.

(ii) API Message Exchange with CBDT (Central Board of Direct Taxes) for PAN (Permanent Account Number) related services: CBDT can verify the PAN of an exporter or importer via API exchange with DGFT.

(iii) API Message Exchange with MCA (Ministry of Corporate Affairs) for company related information: MCA can verify company registration details of an exporter or importer via API exchange with DGFT.

(iv) Message Exchange with Banks, PFMS (Public Financial Management System) & Bharat Kosh:

(a) Application Fee: The payment of various application fees by an exporter or importer can be verified by DGFT via message exchange with banks and Bharat Kosh.

(b) electronic Bank Realisation Certificate (e-BRC) data: Banks issue e-BRCs to exporters upon realization of export proceeds. DGFT can access these data via message exchange with banks.

(v) API message exchange with M/o MSME (Ministry of Micro, Small and Medium Enterprises) for Udyam Registration: This is a registration for MSMEs in India. M/o MSME can verify the Udyam Registration of an exporter or importer via API exchange with DGFT.

These API exchanges help to ensure data accuracy, speed up processing times, and increase transparency in the system.

An e-BRC (Electronic Bank Realisation Certificate) is a document issued by banks to exporters as proof that they have realized the export proceeds. It's important for calculating and documenting the foreign exchange earned by an exporter.

(a) Currencies, where Exchange rates are notified by CBIC: The CBIC (Central Board of Indirect Taxes and Customs) publishes exchange rates between the Indian Rupee (INR) and various foreign currencies. If the foreign currency in which the export proceeds were realized is one of these currencies, then the value is converted to INR using the published exchange rate as of the Let Export Order (LEO) date.

(b) Currencies, where Exchange rates are not notified by CBIC: If the foreign currency is not one for which the CBIC publishes an exchange rate, then the value of the realized proceeds in INR is converted to US dollars using the exchange rate between the INR and the US dollar as published by CBIC on the date of realization.

LEO Example: If an exporter realized proceeds of 10,000 Euros on a date when the CBIC published exchange rate was 80 INR to 1 Euro, the value in INR would be calculated as 10,000 Euros * 80 INR/Euro = 800,000 INR.

Realization Example: If an exporter realized proceeds of 1,000,000 INR in a currency not listed by the CBIC, and the exchange rate on the date of realization was 70 INR to 1 US dollar, then the value in US dollars would be calculated as 1,000,000 INR / 70 INR/US dollar = approximately 14,286 US dollars.

This conversion process helps maintain a standardized system for tracking export proceeds and the foreign exchange earned by exporters. It also aids in applying any benefits or incentives that are tied to the amount of foreign exchange earned.

In some cases, an exporter might not receive payment directly from an overseas customer, but instead, through an insurance agency. This could be due to a trade credit insurance policy that covers non-payment risks, for example.

(a) When export proceeds are realized through an Insurance Agency, the exporter (applicant) must present proof of payment from the insurance agency to the concerned Regional Authority (RA) of the DGFT (Directorate General of Foreign Trade). The RA, after verifying the authenticity of the payment, will seek approval from the Export Goods & Trade Facilitation (EG&TF) Division of the DGFT Headquarters. Once approval is received, the RA will then upload the value of the payment (which takes the place of the usual eBRC value) into the EDI (Electronic Data Interchange) system of the DGFT for case processing.

Example: Let's say an exporter has a trade credit insurance policy and the overseas customer defaults on payment. The insurance company pays the exporter the owed amount of $10,000. The exporter would then approach the RA with proof of this payment. The RA would verify the payment, seek approval from the EG&TF Division, and then upload the $10,000 payment into the DGFT's EDI system.

(b) If the insurance agency's proof of payment includes the claim value in both foreign exchange and INR, the RA will use the foreign exchange value for processing. If the claim value is mentioned only in INR, the RA will convert this INR value into equivalent US dollars using the exchange rate published by the CBIC on the date of the insurance claim settlement.

Example: If the insurance agency's proof of payment states the claim value as both $10,000 and 700,000 INR, the RA would use the $10,000 for processing. But if the proof of payment only shows a claim value of 700,000 INR, and the CBIC's published exchange rate on the claim settlement date was 70 INR to 1 US dollar, then the RA would convert the value to about $10,000 for processing.

The Status Holder Certification is a recognition granted under India's Foreign Trade Policy (FTP) to businesses that have achieved certain export performance thresholds. The status certificate is important because it affords certain benefits and privileges to the holder under the FTP.

1.08 Status Holder: Application for grant of Status Certificate

The export performance threshold for different Status Holder categories in terms of Indian Rupees (INR) with the conversion rate of 1 USD to 82 INR would be as follows:

• One Star Export House: 3 million USD = 246,000,000 INR
• Two Star Export House: 15 million USD = 1,230,000,000 INR
• Three Star Export House: 50 million USD = 4,100,000,000 INR
• Four Star Export House: 200 million USD = 16,400,000,000 INR
• Five Star Export House: 800 million USD = 65,600,000,000 INR

Please note that the actual amounts in INR could vary slightly due to fluctuations in the USD to INR exchange rate.

1.27 Grant of Double Weightage

This clause indicates that some categories of exporters are given "double weightage" for their export performance when being considered for the status of "One Star Export House." This essentially means that the value of their exports is counted as double for the purpose of achieving this status. This benefit, however, is not applicable to higher status categories (Two Star, Three Star, Four Star, and Five Star Export House).

The categories of exporters who can avail this benefit are: i. Micro and Small Enterprises as defined in the MSME Development Act, 2006. ii. Manufacturing units having ISO/BIS certification, showing they adhere to certain standards. iii. Units located in North Eastern States including Sikkim, and Union Territories of Jammu, Kashmir, and Ladakh. This is likely to encourage economic activity in these regions. iv. Exporters of fruits and vegetables under Chapters 7 and 8 of ITC HS (Indian Trade Clarification based on Harmonized System of Coding).

To give an example, let's say a small enterprise located in Sikkim exported goods worth 1.5 million USD. Because it falls under the categories that receive double weightage, its export performance would be considered as 3 million USD (double of 1.5 million), making it eligible for the One Star Export House status.

Privileges to Status Holders

(a) Authorization and Customs Clearances: Status holders can self-declare their imports and exports for customs purposes. This means they can complete the paperwork themselves without the need for a customs broker.

(b) Input-Output norms: The Norms Committee will prioritize setting the input-output norms for status holders within 60 days. Input-output norms specify the amount of input required to produce a certain amount of output. For example, if a textile manufacturer is a status holder, the Norms Committee will specify how much raw cotton is needed to produce a certain quantity of finished garments.

(c) Exemption from Bank Guarantee: Status holders are exempt from providing a bank guarantee for schemes under the Foreign Trade Policy (FTP) and Handbook of Procedures (HBP), unless specified otherwise. A bank guarantee is a type of financial backstop that guarantees a borrower will repay their debts.

(d) Exemption from Compulsory Negotiation of Documents via Banks: Status holders are exempt from having to negotiate documents such as DP/DA/LC through banks. However, they must still receive remittances and make payments through banking channels even if they trade into “Open Account” payment terms.

(e) Export Warehouses: Two-star and above Export houses are allowed to establish export warehouses according to the guidelines set by the Department of Revenue.

(f) Preferential Treatment: Status holders get preferential treatment and their consignments are prioritized by concerned agencies. This could mean faster processing or fewer inspections, for example.

(g) Self-Certification of Origin: Manufacturers who are also status holders (Three Star, Four Star, Five Star) can self-certify their manufactured goods as originating from India. This is important for receiving preferential treatment under trade agreements.

(h) Free of Cost Export: Status holders can export freely exportable items (excluding Gems and Jewelry, Articles of Gold, and precious metals) for promotional purposes up to a certain limit without cost. This could mean, for example, sending samples of their products to potential buyers overseas. The limits are based on their annual export performance.

For example, let's consider a pharmaceutical company that is a status holder. They have an average annual export realization of 50 crores INR during the last three licensing years. As per the rules, they would be allowed to export products free of cost for promotional purposes up to 2% of this amount, i.e., 1 crore INR. If these products are supplied to international health programs, the limit increases to 8% of the average annual export realization.

Keep in mind that these free-of-cost supplies are not entitled to duty drawback or other export incentives under any export promotion scheme.

 

1.28 Other Conditions for Grant of Status

This clause sets out some specific conditions for the status recognition: (a) The export performance of one IEC (Importer Exporter Code) holder cannot be transferred to another IEC holder. So, for instance, if Company A with IEC A1 has exported goods worth 5 million USD, it can't transfer this performance credit to Company B with IEC B1. (b) Exports made on a re-export basis are not counted for status recognition. This means that if goods are imported into India and then exported without substantial transformation, such exports don't count towards the status recognition. (c) Exports of items under authorization, including SCOMET (Special Chemicals, Organisms, Materials, Equipment, and Technologies) items, are included in the calculation of export performance. For instance, if a company has been authorized to export certain controlled goods under SCOMET, these exports are counted towards its performance.

(a) Exporters who wish to obtain Status Holder recognition must file an online application in the ANF 1B form along with the required documents.

(b) This application for the status certificate should be filed with the jurisdictional Regional Authority (RA) based on the location of the company's registered office, or in the case of other entities, the location of the head office.

Example: If a garment exporter in Mumbai wishes to become a Status Holder, they would have to fill out the ANF 1B form and submit it online with the necessary documents to the Mumbai jurisdictional RA.

1.09 Validity of status certificate

(a) Any Status Certificate issued under FTP 2015-20 to an IEC holder will only be valid until September 30, 2023.

(b) Status Certificates issued under the current FTP will be valid for five years from the date the application for recognition was filed.

(c) If a firm achieves a higher status threshold, they can upgrade their status holder category by surrendering the previous certificate and applying as per para 1.08.

Example: If the Mumbai garment exporter had a Status Certificate under FTP 2015-20, it would be valid until 30th September 2023. However, if they apply and receive a Status Certificate under the current FTP in 2023, it will be valid for 5 years from the date of application. If they perform exceptionally well and exceed a higher export threshold, they can surrender their existing certificate and apply for an upgraded status.

1.10 Maintenance of Accounts and Submission of Annual Export Statement

Status Holders are required to maintain accurate records of their exports and imports for a period of two years from the date of the grant of the status certificate. These records should be available for inspection by the RA or any authority authorized by DGFT.

Example: The Mumbai garment exporter must keep detailed records of all its export and import transactions for at least two years. If requested by the DGFT or the RA, the exporter must provide these records for inspection.

1.11 Refusal /Suspension /Cancellation of Certificate

The RA can refuse, suspend, or cancel a Status Certificate if the status holder or their authorized representative fails to meet certain obligations, tampers with authorizations, is involved in corruption or fraud, breaches certain acts or rules, or fails to furnish required information. The status holder will be given a reasonable opportunity to respond before any action is taken.

Example: If the Mumbai garment exporter fails to meet their export obligation or is found to have misrepresented information on their application, their Status Certificate can be suspended or cancelled.

1.12 Appeal

If a Status Certificate is suspended or cancelled and the holder disagrees with the decision, they can file an appeal to the DGFT within 45 days. The decision of the DGFT on the appeal is final.

Example: If the Mumbai garment exporter's Status Certificate was cancelled and they believed the decision was unjust, they could file an appeal to the DGFT within 45 days. The DGFT's decision on the appeal would be final.

 

Chapter 2: General Provisions Regarding Imports and Exports

This chapter dissects the intricate specifications for various goods such as metals, and provides an understanding of the Tariff Rate Quota (TRQ) for items ranging from lentils to cotton for the calendar years 2022 and 2023. It explores the concept of non-preferential Rules of Origin and the process of acquiring a Certificate of Origin. The chapter briefly touches upon the Approved Exporter Scheme (AES) and Self-Certification, directing to further information. Finally, it delves into procedures for policy interpretation, relaxations, and interactions with relevant committees, ensuring comprehensive insight into the realm of import and export.

1. Specifications for Different Goods: This section discusses specific requirements for items such as copper and other metals, detailing the tariff rates and specifications over the years.
2. Tariff Rate Quota (TRQ): This section covers the TRQ for different items including lentils, almonds, oranges, mandarins, pears, and cotton, indicating the in-quota rate and the TRQ quantities for calendar years 2022 and 2023.
3. Rules of Origin (Non-Preferential): The document outlines the criteria that define the origin of goods, including the manufacturing process, the level of processing operations that imported inputs must undergo, and simple operations that do not count towards defining the origin of goods.
4. Certificate of Origin (CoO): This section describes the process for applying for a Non-Preferential Certificate of Origin. The nominated agencies, application procedure, required documents, fees, and criteria for granting the CoO are detailed.
5. Approved Exporter Scheme (AES) and Self-Certification: The document briefly mentions these aspects and refers to other parts of the documentation for more information.
6. Policy Interpretation and Relaxations: Procedures for applications to the Policy Interpretation Committee (PIC), the Policy Relaxation Committee (PRC), and the Export Promotion Capital Goods (EPCG) Committee are detailed.

CN22 and CN23 forms are primarily used for international shipments sent through postal or courier services. These forms are typically associated with air or postal transportation modes. Here's a breakdown of their usage in different modes of transportation:

1. Postal Services: CN22 and CN23 forms are commonly used for shipments sent through national postal services or international postal organizations such as USPS, Royal Mail, Canada Post, etc. These forms accompany packages shipped via airmail or surface mail.
2. Courier Services: Private courier companies like DHL, FedEx, UPS, and others also use CN22 and CN23 forms for their international shipments. These forms are attached to packages transported via their express or expedited delivery services, which often involve air transportation.

In both cases, the forms serve as customs declarations, providing essential information to customs authorities at the destination country. They help ensure compliance with customs regulations and facilitate the smooth clearance of the packages.

It's worth noting that when shipping goods using other modes of transportation, such as ocean freight or trucking, different types of customs documentation, such as commercial invoices, packing lists, or electronic customs forms, may be required instead of CN22 and CN23 forms. The specific documentation requirements can vary depending on the country, the nature of the goods, and the chosen transportation mode.

CN22 and CN23 are customs declaration forms used for international shipments to provide information about the contents and value of the package. They are part of the customs clearance process and help customs authorities assess duties, taxes, and regulatory compliance. Let's clarify the differences between CN22 and CN23 and explore their process and usage:

1. CN22 Form:
   • Usage: CN22 is a simplified customs declaration form used for small packages weighing up to 2 kg (or 4.4 lbs) and containing non-dutiable items or items with a low value.
   • Content: It requires basic information about the sender, recipient, and the package's contents, such as a general description of the goods, quantity, and total value.
   • Process: The CN22 form is typically attached to the package's exterior and filled out by the sender. It is used for postal shipments and may not require additional documents or invoices.
2. CN23 Form:
   • Usage: CN23 is a more detailed customs declaration form used for larger packages or shipments exceeding the weight limit of CN22. It is used for both dutiable and non-dutiable items and provides more comprehensive information.
   • Content: CN23 requires detailed information about the sender, recipient, package contents, itemized descriptions, quantities, individual values, and other necessary details for customs assessment.
   • Process: The CN23 form is typically attached to the package's exterior, and the sender fills it out. It may require additional documents such as commercial invoices, packing lists, or other supporting paperwork, depending on the destination country's customs requirements.

Process and Usage:

1. Declaration: The sender completes the relevant customs declaration form (CN22 or CN23) accurately and legibly, ensuring that the information provided is correct and matches the actual contents of the package.
2. Attach and Label: The completed form is then securely attached to the outside of the package, usually in a plastic envelope provided by the postal service. The package should be clearly labeled with the recipient's address and other required shipping labels.
3. Customs Clearance: When the package arrives at the destination country, customs officials review the customs declaration form to assess the contents, determine the applicable duties and taxes, and ensure compliance with import regulations.
4. Delivery: Once customs clearance is completed and any applicable duties or taxes are paid by the recipient (if required), the package can be delivered to the recipient's address.

It's important to note that specific customs regulations and requirements can vary between countries, so it's essential to consult the customs authority or shipping service provider for accurate and up-to-date information when preparing international shipments.

The "Actual User Condition" is a requirement imposed by the Directorate General of Foreign Trade (DGFT) in India. It states that if certain goods can be freely imported without any restrictions but still require an authorization, only the actual user of those goods is allowed to import them unless the DGFT explicitly waives the actual user condition.

To clarify this concept, let's consider an example:

Suppose there is a specific piece of machinery used in the pharmaceutical industry, which falls under the category of goods importable freely without restrictions. However, due to its specialized nature and potential for misuse, the DGFT decides to impose an authorization requirement for importing this machinery.

In such a case, the "Actual User Condition" would come into play. According to this condition, only the actual user of the machinery, which means the pharmaceutical company intending to utilize it for their production processes, would be allowed to import it. Other entities or individuals would not be eligible to import the machinery unless they are the designated actual user.

By implementing the Actual User Condition, the DGFT aims to ensure that goods subject to authorization are utilized by the intended end-users or entities with the necessary expertise, capabilities, and legitimate purposes. This condition helps prevent unauthorized or inappropriate use of goods that require control.

It's important to note that specific goods and their corresponding import requirements can vary, and the DGFT may waive the Actual User Condition on a case-by-case basis if deemed appropriate. Therefore, it's essential to consult the DGFT or relevant authorities to determine the specific import requirements for goods subject to authorization and whether the Actual User Condition applies.

When an authorization is issued by the Directorate General of Foreign Trade (DGFT) in India, it includes certain terms and conditions that the authorized party must adhere to. These terms and conditions ensure compliance with regulations and govern various aspects of the authorized activity. Let's clarify each of the mentioned terms and conditions with an example:

(a) Description, quantity, and value of goods: The authorization will specify the detailed description, quantity, and value of the goods that the authorized party is allowed to import or export. For example, if a company is granted an authorization to import 1,000 units of a specific electronic device, the description of the device, the quantity of 1,000 units, and the total value of the import will be mentioned in the authorization.

(b) Actual User condition: As explained in Chapter 11, the actual user condition states that only the designated actual user is allowed to import or export the goods specified in the authorization. For instance, if a pharmaceutical company obtains an authorization to import a particular drug, the actual user condition ensures that only that specific pharmaceutical company can import the drug, and it cannot be transferred or used by any other entity.

(c) Export Obligation: The authorization may impose an export obligation on the authorized party. This means that the party receiving the authorization is required to export a certain quantity or value of goods within a specified period. For example, if a textile manufacturer is granted an export authorization, they may have an export obligation to export a certain amount of textiles within a year.

(d) Minimum Value addition to be achieved: In some cases, the authorization may stipulate a minimum value addition requirement. This means that the authorized party must add a certain value to the imported goods through manufacturing or processing before exporting them. For instance, if a company is authorized to import raw materials for the production of garments, they may be required to achieve a minimum value addition by transforming the raw materials into finished garments before exporting them.

(e) Minimum export/import price: The authorization may specify a minimum price at which the authorized party must export or import the goods. This ensures that the goods are traded at a fair price and prevents any price manipulation or under/over-invoicing. For example, if a company is authorized to import a specific commodity, the authorization may state the minimum import price at which the company must purchase the commodity.

(f) Bank guarantee/Legal undertaking/Bond with Customs Authority/RA: Depending on the nature of the authorized activity, the DGFT may require the authorized party to provide a bank guarantee, legal undertaking, or bond to ensure compliance with the terms and conditions of the authorization. This provides assurance that the authorized party will fulfill their obligations and follow the specified regulations. The specific requirements for providing a bank guarantee, legal undertaking, or bond will be outlined in the authorization.

(g) Validity period of import/export: The authorization will have a specified validity period during which the authorized party can import or export the goods. This validity period is determined based on the regulations and policies in force at the time of issuance. For example, if an authorization is issued with a validity period of one year, the authorized party must complete the import or export within that timeframe.

It's important to note that the terms and conditions mentioned above are not exhaustive, and the DGFT may include additional conditions specific to each authorization based on the nature of the goods, trade policies, and other relevant factors.

The mentioned section outlines the penal actions and consequences that an entity may face for violating the conditions of an authorization or providing false information. It also introduces the concept of the Denied Entity List (DEL), which restricts certain entities from receiving licenses, authorizations, certificates, or other benefits. Let's clarify each point with an example:

(a) Violation of Authorization Conditions and Export Obligation: If an authorization holder fails to comply with the conditions mentioned in the authorization or fails to fulfill their export obligation, they may face penalties and legal action. For instance, if a company is granted an authorization to import a specific quantity of raw materials for manufacturing goods to be exported, but they fail to meet the required export target within the specified timeframe, they can be subject to penalties and legal consequences under the Foreign Trade (Development and Regulation) Act and other relevant laws.

(b) Self-Certification System and False Information: Under certain schemes, the DGFT allows applicants to self-certify certain information and particulars. However, if it is later discovered that the information provided was untrue or incorrect, the applicant can face legal action under the Foreign Trade (Development and Regulation) Act and its rules, as well as penalties under other applicable acts or orders. For example, if a company self-certifies its compliance with specific export regulations but is later found to have violated those regulations, they can be held accountable and face legal consequences.

(c) Placement in Denied Entity List (DEL): In cases where a firm is found to have engaged in illegal or unethical practices, the concerned Regional Authority (RA) has the power to place the firm in the Denied Entity List (DEL) under the provisions of the Foreign Trade (Regulation) Rules, 1993. This action can result in the refusal of granting or renewing licenses, authorizations, certificates, scrips, or any instrument that provides financial or fiscal benefits. For instance, if a company is involved in fraudulent activities or repeatedly violates trade regulations, the RA may place them in the DEL, thereby blocking them from accessing future benefits or permissions.

(d) Abeyance of DEL Orders: In certain situations, the RA has the authority to place DEL orders in abeyance for a specified period. This decision must be recorded in writing and can last for a maximum of 60 days at a time. During this period, the restrictions and consequences associated with being on the DEL may be temporarily suspended. The abeyance can be granted for reasons such as ongoing investigations or pending resolution of compliance issues.

(e) Removal from DEL: If a firm that has been placed on the DEL fulfills its export obligations, pays any imposed penalties, or satisfies the requirements stated in the demand notice issued by the RA, their name can be removed from the DEL. The decision to remove the firm's name must be recorded in writing by the concerned RA. For example, if a company on the DEL rectifies its non-compliance issues, pays the required fines, and demonstrates improved compliance, the RA may decide to remove the company's name from the DEL.

It's important to note that the specific actions, penalties, and procedures may vary based on the circumstances, the severity of the violation, and the relevant regulations applicable at the time.

2.25 Import of Samples: Under this provision, no authorization is required for importing bonafide technical and trade samples of items that are "restricted" in the Indian Trade Classification (ITC) HS code, except for defense/security items, seeds, bees, and new drugs. For example, if a company based in India wants to import samples of a new electronic device that is restricted under the ITC (HS) code, they can do so without obtaining a specific authorization.

2.26 Import of Gifts: Importing goods as gifts, including those purchased from e-commerce portals, through post or courier, is generally prohibited. However, there are exceptions for life-saving drugs/medicines and Rakhi (but not gifts related to Rakhi). For instance, if someone sends a small package containing life-saving medication as a gift to a family member in India, it can be allowed for importation. However, gifts unrelated to Rakhi must adhere to the applicable customs duties and regulations.

2.27 Import through Passenger Baggage: (a) Bona-fide household goods and personal effects can be imported as part of passenger baggage within the limits and conditions specified in the Baggage Rules notified by the Ministry of Finance. For example, an Indian citizen returning from abroad can bring back personal belongings such as clothing, furniture, or electronics as part of their baggage without the need for a separate authorization.

(b) Samples of items that are freely importable under the Foreign Trade Policy (FTP) can also be imported as part of passenger baggage without requiring an authorization. This applies to items that are not subject to any restrictions in the FTP. For example, a fashion designer traveling to India can bring clothing samples for showcasing and display purposes without the need for an authorization.

(c) Exporters coming from abroad are allowed to import specific items as part of their passenger baggage, including drawings, patterns, labels, price tags, buttons, belts, trimming, and embellishments required for export. The import of these items is allowed within the value limits specified in the FTP or relevant customs notifications. For instance, a jewelry exporter traveling to India can carry design patterns and labels in their baggage for use in the production of jewelry for export.

(d) However, items such as samples or prototypes of items that are "restricted" or "prohibited" in terms of import policy or are canalized through Special Trading Entities (STEs) cannot be imported as part of passenger baggage without a valid authorization or permission issued by the DGFT. This means that any items subject to specific restrictions or requiring special permissions must go through the appropriate authorization process before being imported.

It's important to note that the specific details, regulations, and procedures may vary depending on the nature of the goods, their import restrictions, and the applicable customs and trade policies at the time of importation.

.62 Import of Samples: (a) No authorization is required for importing bonafide technical and trade samples of items that are restricted in the Indian Trade Classification (ITC) HS code, except for vegetable seeds, bees, and new drugs. For example, a company in India can import a sample of a restricted electronic component for testing and evaluation purposes without obtaining a specific authorization.

Samples of tea not exceeding Rs. 2000 (CIF) in one consignment can also be imported without an authorization by any person connected with the tea industry. For instance, a tea trader can import tea samples for tasting and quality assessment without the need for an authorization.

(b) Duty-free import of samples up to Rs. 3,00,000 for all exporters is allowed as per the terms and conditions specified in the Customs Notification. This means that exporters can import samples of their products within this value limit without paying customs duties. For example, a clothing manufacturer can import textile samples for showcasing to potential international buyers without incurring any customs duties on the imported samples.

2.63 Exports of Samples / Exhibits: (a) Exports of trade and technical samples of freely exportable items can be carried out without any limit or restriction. For example, a computer hardware manufacturer can export samples of their latest computer chip to potential clients abroad to showcase its performance and features.

(b) However, if an export item falls under a restricted category, an application for the export of samples or exhibits can be made to the Directorate General of Foreign Trade (DGFT) as per the specified application format (ANF-2Q). The DGFT will review the application and determine whether to grant the authorization for the export of the restricted samples/exhibits.

2.64 Export Policy: The export policy is outlined in Chapter-2 of the Foreign Trade Policy (FTP). The items that can be exported without an authorization, subject to specified terms and conditions, are listed in Schedule 2, Appendix-1 of the Indian Trade Classification (ITC) HS code. For example, certain goods like handicrafts or certain agricultural produce may be freely exported without the need for a specific authorization, but they must adhere to the specified terms and conditions.

2.65 Gifts / Spares / Replacement Goods: For exporting gifts, indigenous/imported warranty spares, and replacement goods exceeding the prescribed ceiling or period mentioned in the FTP, an application can be made to the DGFT using the specified application format (ANF-2Q). This allows exporters to obtain the necessary authorization for exporting these items. For instance, if a company wants to export gifts exceeding the prescribed limit for promotional purposes, they can apply for authorization from the DGFT.

2.66 Export by Post: When exporting goods by post, certain documents are required instead of the documents prescribed for export by sea or air. These include: (a) Bank Certificate of Export and Realization, which is similar to the e-BRC (Electronic Bank Realization Certificate) as specified in Appendix 2U. (b) Relevant postal receipt, indicating the details of the shipment and postage. (c) Invoice duly attested by Customs Authorities, which verifies the contents and value of the exported goods.

For example, if an individual is sending a small package containing a handmade craft as a gift to a friend overseas, they would need to provide the relevant postal receipt, a bank certificate confirming the export realization, and an invoice attested by Customs Authorities as part of the export process.

2.44 Export of Gifts: Under this provision, goods including edible items, with a value not exceeding Rs.5,00,000/- in a licensing year, can be exported as a gift. However, it's important to note that items mentioned as restricted for exports in the ITC (HS) (Indian Trade Clarification based on Harmonized System) shall not be exported as gifts without obtaining an Authorization.

Example: Suppose an individual in India wants to send a box of traditional Indian sweets to their friend abroad as a gift. If the value of the sweets is within Rs.5,00,000/- and the sweets are not included in the list of restricted items for export mentioned in the ITC (HS), then they can be exported as a gift without requiring an Authorization.

2.45 Export of Passenger Baggage: (a) Bona-fide personal baggage may be exported either along with the passenger or, if unaccompanied, within one year before or after the passenger's departure from India. However, items mentioned as restricted in the ITC (HS) will require an Authorization. Government of India officials proceeding abroad on official postings are allowed to carry food items (free, restricted, or prohibited) strictly for their personal consumption along with their personal baggage. These provisions are subject to the Baggage Rules issued under the Customs Act, 1962.

(b) Samples of items that are otherwise freely exportable under the Foreign Trade Policy (FTP) can also be exported as part of passenger baggage without requiring an Authorization.

Example: Let's say a person is traveling from India to another country and wants to take their personal belongings, such as clothes, books, and personal electronics, with them. They can export these items as part of their passenger baggage without needing an Authorization. However, if they wish to export a restricted item, such as an antique artifact, mentioned in the ITC (HS), they would need to obtain an Authorization before exporting it as part of their passenger baggage.

It's important to follow the specific rules and regulations mentioned in the FTP and the Baggage Rules issued under the Customs Act, 1962 while exporting gifts and passenger baggage to ensure compliance with the applicable policies and procedures.

Vostro Account: A Vostro account is a type of foreign currency account held by a non-resident bank in another country on behalf of a domestic bank. In the context of Indian exporters, the role of a Vostro account is to facilitate the realization of export proceeds in freely convertible currency. As per the provided information, if an exporter receives payment in rupees through a Vostro account of a non-resident bank located in a country other than a member country of the Asian Clearing Union (ACU) or Nepal or Bhutan, the payment should be against a prior payment in free foreign currency by the buyer into their non-resident bank account. The free foreign exchange remitted by the buyer, after deducting bank service charges, would be considered as export realization for the export promotion schemes of the Foreign Trade Policy (FTP).

Example: An Indian exporter sells goods to a buyer in the United States. The buyer makes the payment in US dollars to their non-resident bank, which then credits the equivalent amount in Indian rupees to the exporter's Vostro account maintained by an Indian bank. The exporter can use these rupees for their domestic operations or convert them into freely convertible currency as per their requirements.

In the context of Indian banking, "Vostro" and "Nostro" are types of accounts that are used in foreign exchange and international banking transactions.

1. Nostro Account: A Nostro account refers to an account that an Indian bank holds in a foreign bank, in the foreign bank's currency. The term "Nostro" is derived from the Latin term which means "our account with you".

For example, if the State Bank of India (SBI) has an account with Citibank in the USA in US dollars, this would be a Nostro account for SBI. This allows SBI to facilitate transactions in US dollars for its customers who want to do business in the USA.

2. Vostro Account: A Vostro account is just the opposite. It is an account that a foreign bank holds with an Indian bank, in Indian Rupees. The term "Vostro" is derived from the Latin term which means "your account with us".

For example, if Citibank USA has an account with the State Bank of India in Indian Rupees, this would be a Vostro account for SBI. This enables Citibank to facilitate transactions in Indian Rupees for its customers who want to do business in India.

These accounts, Vostro and Nostro, are essential to facilitate international trade and foreign exchange transactions. They allow for smooth transactions, minimize exchange rate risks, and ensure funds are readily available in the currency required for a given transaction.

 

2. INR Trade: INR trade refers to trade transactions that are settled in Indian rupees (INR). According to the provided information, invoicing, payment, and settlement of exports and imports can be done in INR subject to compliance with the Reserve Bank of India's (RBI) guidelines. Settlement of trade transactions in INR takes place through Special Rupee Vostro Accounts opened by Authorized Dealer (AD) banks in India, as permitted under RBI regulations. This means that trade transactions can be conducted in INR without the need for conversion into foreign currency.

Example: An Indian exporter sells goods to a buyer in India. The exporter issues an invoice denominated in INR, and the buyer makes the payment directly in INR to the exporter's bank account in India. The exporter can use these INR funds for their domestic operations or keep them in their bank account.

ACU, or Asian Clearing Union, is a payment arrangement through which member countries can settle payments for intraregional transactions among the participating central banks. It was established with the aim of facilitating payments among member countries, promoting monetary cooperation, and fostering trade within the region.

To understand this better, let's consider an example:

Imagine two countries, India and Iran, both of which are part of the ACU. A company in India, say "India Co.," wants to import Persian rugs from an Iranian company, "Iran Co."

Without the ACU, "India Co." would need to convert their Indian Rupees (INR) to a commonly accepted currency like the USD or EUR, then the "Iran Co." would need to convert this foreign currency into Iranian Rials (IRR). This process could be costly due to transaction and conversion fees and also exposes the companies to exchange rate risks.

With the ACU mechanism, the process is streamlined. When "India Co." pays for the rugs, it pays in INR to the Reserve Bank of India (India's central bank). The payment information is then transmitted through the ACU mechanism to the Central Bank of Iran, which then pays "Iran Co." in IRR.

In this way, the use of ACU helps to simplify the payment process, reduce transaction costs, and mitigate exchange rate risk. Payments are made in a regional unit of account called the Asian Monetary Unit (AMU), which is equivalent to one USD.

Remember, the ACU mechanism is used for trade transactions only, not for capital and investment transactions. Also, this system is used only among the member countries, which include Bangladesh, Bhutan, India, Iran, Myanmar, Maldives, Nepal, Pakistan, Sri Lanka, and as an observer, Russia.

Certain commodities have their own specific boards. For instance, spices are under the Spices Board, and coir & coir products are under the Coir Board. If an exporter is involved in these specific commodities, they need to register with the respective boards.

Suppose you own a business, "Spicy India", that specializes in exporting spices from India. To legally export your spices and avail of any concessions or benefits under the Foreign Trade Policy, you would need to have an RCMC. But instead of obtaining this from a general EPC, you would register with the Spices Board and obtain the Certificate of Registration as an Exporter of Spices (CRES). This CRES would be treated as your RCMC.

1. Approved Exporter Scheme for Self-Certification of Certificate of Origin: Currently, Certificates of Origin, which verify that a good was produced in a specific country, are issued by designated agencies for various trade agreements (like PTAs, FTAs, CECAs, and CEPAs). However, to make the process more efficient, a self-certification system has been introduced. Under this system, manufacturers who are Status Holders can self-certify their goods as originating from India. This allows their goods to qualify for preferential treatment under the various trade agreements in operation. But it's important to note that self-certification can only be done for goods manufactured according to the terms of their Industrial Entrepreneurs Memorandum (IEM), Industrial License (IL), or Letter of Intent (LOI). Status Holders will be recognized as Approved Exporters by the Directorate General of Foreign Trade (DGFT).

Let's take an example: Suppose you have a Status Holder manufacturing company in India, "India Tech", which produces electronic goods. Under the new scheme, you can self-certify that your electronic goods are made in India, rather than needing a designated agency to issue a Certificate of Origin. This makes the process quicker and reduces transaction costs.

2. Certification of Origin of Goods for EU-GSP: Exporters can self-certify the origin of their goods for the EU under the Registered Exporter System (REX) as part of the European Union Generalized System of Preferences (EU-GSP). The EU-GSP allows exporters from developing countries to pay less or no duties on their exports to the EU. This gives them better access to the EU market.

Let's take another example: You are exporting textiles to the EU from your company "India Textiles" that is registered under the REX system. You can self-certify the origin of your textiles, stating that they were manufactured in India, rather than having to get a certificate from a designated agency. This can expedite the process and reduce costs, allowing you to provide competitive prices in the EU market.

A Free Sale and Commerce Certificate is a type of document provided by authorities (in this context, the Regional Authority or RA in India), indicating that a particular product is not prohibited or restricted and is freely sold in the open market. This certificate is often needed for certain types of products, particularly healthcare and food products, when they are being exported to certain countries.

Here's a simplified explanation with an example:

Let's say you run a company, "India Health Corp", that manufactures medical devices in India, and you're seeking to export your products to other countries. Some countries may require assurance that the products you're exporting are freely sold on the Indian market and not subject to any legal restrictions.

To meet this requirement, you would apply to the appropriate Regional Authority (RA) in India for a Free Sale and Commerce Certificate. Your application would be made using the format provided in the Aayat Niryat Form (ANF) 2H and should include all necessary details as mentioned in Annexure A of ANF 2H. Once your application is approved, the RA would issue a Free Sale and Commerce Certificate as per Annexure B of ANF 2H.

The certificate would attest that your medical devices are not restricted or prohibited for sale in India and can be freely sold on the Indian market. The validity of this certificate, as per the guidelines, would be two years from the date of issue unless specified otherwise.

This certificate would help "India Health Corp" establish trust with overseas customers and regulatory authorities, ensuring them that the exported products comply with Indian regulations and are freely available on the Indian market. It's an essential document for exporters dealing with specific types of products, especially in the healthcare sector.

Pre-shipment Inspection Agency (PSIA) and Pre-Shipment Inspection Certificate (PSIC): PSIA is an organization that's recognized and authorized by the Directorate General of Foreign Trade (DGFT) to conduct pre-shipment inspections of goods. The PSIC is a document issued by a PSIA that certifies a shipment has been inspected and is in compliance with the relevant standards and regulations.

Responsibility and Liability of PSIA and Importer: PSIAs are responsible for any mis-declaration in the PSIC or in their online application for recognition as a PSIA. If a PSIA is found to have falsely declared information, they may face penalties, including suspension or cancellation of recognition.

Similarly, importers and exporters are responsible for ensuring that the imported material matches the declaration given in the PSIC. Any discrepancy could result in penalties under the Foreign Trade (Development & Regulation) Act, 1992.

Import of other kinds of metallic waste and scraps, seconds and defectives: This refers to the import policy for different types of metallic waste, scrap, and second-hand or defective items.

Services of Inspection and Certification Agencies: Government authorities, such as Customs, can use the services of Inspection and Certification Agencies listed in Appendix 2I of the Appendices and Aayat Niryat Forms. These agencies can certify the residual life and valuation or purchase price of capital goods.

It's crucial to note that any entities involved in the import or export of goods are expected to comply with the relevant laws, and any violations can lead to significant penalties.

1. Responsibility and Liability of PSIA and Importer: Let's say a Pre-Shipment Inspection Agency (PSIA) named "SureCheck Inspections" is hired to inspect goods to be exported by a company called "India Export Corp". If "SureCheck Inspections" were to make any misdeclaration in the Pre-Shipment Inspection Certificate (PSIC) or in their online application for recognition as a PSIA, they would be liable for penal actions under the Foreign Trade (Development & Regulation) Act, 1992. This could range from fines to suspension or cancellation of their recognition as a PSIA.
2. On the other hand, "India Export Corp" as the exporter, and the foreign entity as the importer, would be jointly and severally responsible for ensuring that the imported material matches the declaration given in the PSIC. So, if "India Export Corp" states in the PSIC that they're exporting 100 tons of steel, but they're actually exporting a different material or a different quantity, they would be liable for penal actions under the Foreign Trade (Development & Regulation) Act, 1992.
3. In the case of generating and uploading the PSIC, "SureCheck Inspections" as the PSIA would conduct the necessary inspections, then generate and upload the PSIC on the DGFT website. They would also have to upload any photographic or video evidence taken during the inspection.
4. For example, during the inspection, "SureCheck Inspections" would have to take photographs or videos showing the inspection site, the testing instruments used, the process of stuffing and sealing the containers, the container numbers, and a photograph of the inspector with the inspected goods. This creates a detailed record of the inspection process, ensuring transparency and accountability.
5. Finally, these photographs and/or video clippings need to be uploaded to the DGFT website at the time of issuing the PSIC. This allows authorities to verify that the inspection was conducted correctly and that the details in the PSIC are accurate.

This entire process aims to maintain the integrity of India's export system, ensuring that goods are correctly inspected before export, and that all parties involved - the PSIA, exporter, and importer - are held accountable for their actions.

 

Exhibits Required for National and International Exhibitions or Fairs and Demonstration: Suppose an Indian company named "Innovative Tech Pvt Ltd" wants to participate in an international tech exhibition in Germany. They wish to bring their new prototype robot for demonstration, along with some decorative materials for their booth. These items are not on the 'Prohibited' or SCOMET List, hence they can be exported from India for the exhibition without an Authorization. However, a bond or security needs to be submitted to Customs or they could use an ATA Carnet, which is an international customs document that covers temporary admission of goods. This ensures that the items will be re-imported back to India within six months if not sold. It would be allowed duty free in India.

Extension beyond six months for re-export / re-import: Let's imagine that due to unforeseen circumstances, "Innovative Tech Pvt Ltd" couldn't re-import the exhibits within the specified six months. In such a case, they would need to approach the Customs authorities and request an extension, explaining the reasons. The decision would then be based on the merits of the case.

Sale of Exhibits: If "Innovative Tech Pvt Ltd" decided to sell the prototype robot (which is not a restricted item as per ITC (HS)) at the exhibition, they can do so without needing an Authorization, as long as the total cost of such exhibits for each exhibitor doesn't exceed Rs.5 lakh (CIF).

Example: For items that are freely importable, for example, a decorative piece that was used at the booth, if "Innovative Tech Pvt Ltd" decided to sell it at the exhibition, they can do so within the bond period allowed for re-export.

In all these scenarios, consumable items like paints, printed materials, pamphlets, etc. used in the exhibition don't need to be re-imported.

This regulation facilitates Indian companies to participate in international exhibitions, showcase their products, and even make sales or purchase, all while ensuring that the appropriate customs duties are paid and regulations are followed.

Free Trade Agreements (FTAs) and Preferential Trade Agreements (PTAs) are international treaties that reduce barriers to trade and promote economic integration between the signing countries. These agreements typically reduce or eliminate tariffs, import quotas, export restrictions, or other trade barriers on goods and services traded between the signing countries.

For example, if we consider the India - Sri Lanka FTA (Free Trade Agreement), it means that certain goods produced in India and exported to Sri Lanka would face reduced or even zero tariffs compared to goods from non-FTA countries. This makes Indian products more competitive and may increase exports to Sri Lanka. Similarly, Sri Lanka also enjoys these benefits when exporting to India. Same Visa versa applicable to Indian Exporter selling certain items mentioned in FTA to Srilanka

 

The list of the FTAs that have been signed by India are:

(a) Free Trade Agreements (FTAs)

(i) India - Sri Lanka FTA

(ii) Agreement on South Asian Free Trade Agreement (SAFTA)

(iii) Revised Agreement of Cooperation between Government of India and Nepal to control unauthorized trade 

(iv) India - Bhutan Agreement on Trade Commerce and Transit

(v) India - Thailand FTA - Early Harvest Scheme (EHS)

(vi) India - Singapore Comprehensive Economic Cooperation Agreement (CECA) 

(vii) India – ASEAN CECA (Goods, Services and Investment)

(viii) India - South Korea Comprehensive Economic Partnership Agreement (CEPA) 

(ix) India - Japan CEPA

(x) India - Malaysia CECA

(xi) India –Mauritius CECPA

(xii) India –UAE CEPA

(xiii) India - Australia ECTA

 

(b) The list of Preferential Trade Agreements (PTAs) signed by India are:

(i) Asia Pacific Trade Agreement (APTA)

(ii) Global System of Trade Preferences (GSTP)

(iii) India - Afghanistan PTA

(iv) India - MERCOSUR PTA

(v) India - Chile PTA

(vi) SAARC Preferential Trading Arrangement (SAPTA)

The Generalised System of Preferences (GSP) is a system through which industrialized (developed) countries extend tariff concessions to developing countries, including Least Developed Countries (LDCs). This is a non-contractual, non-reciprocal arrangement, meaning the industrialized nations grant these benefits without expecting equivalent benefits in return.

For example, if a product exported from India to the United States of America (which extends tariff preferences under their GSP Scheme) qualifies under the GSP, this product may enjoy a lower tariff (or even be exempt from the tariff) compared to the same product exported from a non-GSP country. This can enhance the competitiveness of Indian exports in these markets.

The GSP schemes are specific to each country and detail sectors / products and tariff lines under which benefits are available. These schemes are renewed and modified from time to time.

In order to qualify for the GSP benefits, exports typically need to be accompanied by a Preferential Certificate of Origin (CoO) that proves that the product originates from the beneficiary country. For GSP, this is often referred to as Form 'A'. The list of agencies authorized to issue GSP CoO is given in Appendix-2C.

From 2017, the European Union introduced a self-certification scheme known as the Registered Exporter System (REX). Under this system, exporters with a REX number can self-certify the origin of their goods being exported to the EU under the GSP Scheme. This registration is free of charge. The competent local authorities conduct post-verification of these self-certified Certificates of Origin upon request by the importers/customs agencies of the importing country.

A fee, detailed in Appendix 2K, applies for this post-verification process. The agencies can also charge travel allowance (TA) and daily allowance (DA), as per government rates, separately from the unit.

The beneficiary country needs to have a system to verify such self-certified certificates of origin to avail GSP benefit under the self-certification system. The standard operating procedure for this is detailed in Annexure-II to Appendix-2C. Following countries extend tariff preferences under their GSP Scheme: (i) United States of America (ii) New Zealand (iii) Belarus (iv) European Union (v) Japan (vi) Russia (vii) Canada(viii) Norway (ix) Australia (only to LDCs) and (x) Switzerland

It's crucial for exporters to understand these requirements and processes to make the most of these preferential trade schemes.

The Duty-Free Tariff Preference (DFTP) Scheme for Least Developed Countries (LDCs) is a program initiated by India, in line with a 2005 international mandate, to extend tariff-free and quota-free access to imports from LDCs. This program began in 2008, with India becoming the first developing country to offer such a facility.

As an example, imagine a small artisan workshop in an LDC like Nepal, producing traditional handwoven rugs. Without the DFTP, these rugs might face a tariff of, say, 10% when imported to India, making them less competitive. Under the DFTP, these rugs can be imported to India without any import tariff, thus lowering their cost and making them more competitive.

This scheme was expanded in 2014 to cover more products (96.4% of total tariff lines), leaving only about 3.6% of lines in the Exclusion and Positive Lists. This expansion was in response to requests from several LDCs for additional product coverage.

When it comes to Certificates of Origin (CoO), these documents prove where a product was manufactured or produced. They are necessary for determining if the goods are eligible for preferential treatment under trade agreements or preferential schemes like DFTP.

For example, for the handwoven rugs from Nepal to benefit from the DFTP scheme when imported to India, a Certificate of Origin would be needed to prove that they were indeed made in Nepal.

CoOs fall into two categories: Preferential and Non-preferential. Preferential CoOs are used when goods are exported under a Free Trade Agreement (FTA), Preferential Trade Agreement (PTA), or preferential schemes like the GSP or DFTP. Non-preferential CoOs, on the other hand, are used in all other cases.

Rules of Origin (RoO) are the guidelines that determine the nationality of a product. Key criteria for determining the origin include whether the product was wholly obtained in the country, the level of value addition in the country, whether there's a change in tariff classification, and if non-minimal operations were carried out in the country.

Authorized agencies issue CoOs and provide details regarding RoO, list of items covered by an agreement, extent of tariff preference, verification, and certification of eligibility. The Export Inspection Council (EIC) of India is authorized to print blank certificates.

It's essential for exporters to understand these rules and procedures to ensure their products qualify for the preferential treatments available under various trade agreements and schemes.

 

Non Preferential COO: non-preferential rules of origin are rules that define where a product and its parts were created or significantly transformed, in the absence of any trade agreement that provides a preferential tariff treatment.

(a) Essentially, the criteria stated in the document mean that if the goods are produced by the exporting entity as defined in the "Manufacture" paragraph of FTP, and if imported inputs have been used in the manufacturing process, the resulting product can only be considered of Indian origin (non-preferential) if the imported inputs undergo substantial transformation beyond simple operations such as:

• Cleaning, sorting, washing, painting, cutting
• Repacking or simple packing operations
• Preservation operations like drying, freezing, storing in brine
• Affixing marks, labels or other signs on products or packaging
• Simple mixing of products
• Simple assembly or disassembly of parts of products
• Slaughter of animals
• Mere dilution with water or another substance that doesn't materially alter the product's characteristics.

For example, if imported coffee beans are simply ground and packed in India, it may not qualify as a product of Indian origin because the processing involved is considered a simple operation. However, if the coffee beans are roasted, ground, mixed with chicory (an Indian product), and then packaged, the product may be considered of Indian origin because it has undergone significant transformation.

(b) Non-preferential Certificate of Origin (CoO) is issued by certain agencies nominated by the government. The CoO evidences the origin of goods but does not confer any right to preferential tariffs.

(c) To apply for a CoO (Non-Preferential), exporters have to submit certain documents including details of quantum/origin of inputs used, copies of invoices, a packing list for the concerned invoice, and a fee.

(d) The agency ensures that the goods are of Indian origin according to the criteria defined before granting the CoO (Non-Preferential).

(e) Manufacturer exporters who are also status holders are eligible to self-certify their goods as originating from India, if the goods meet the criteria defined above.

It's important to note that these are general rules and may vary in specifics based on individual circumstances and evolving guidelines.

Chapter 3: Developing Districts as Export Hubs

The District Export Action Plan (DEAP) plays a critical role in fostering export growth at the district level. Here's a summary of the key points:

1. Involvement of Stakeholders: The plan involves key stakeholders like the District Magistrate, local businesses, and industry organizations to determine the key products and services with export potential from the district.
2. Key Export Products and Services: These are identified based on the unique advantages of the district, and strategies are developed to maximize their export potential.
3. Clear Identification of Incentives: The plan includes a detailed list of the incentives and support provided by the State and Central Government to boost exports.
4. Training and Development: DEAP identifies the training needs to improve the production of key export products and services.
5. Export Data Analysis: The plan includes an analysis of the district's export data and ways to capture it more effectively.
6. Mid and Long-term Export Strategy: The DEAP provides strategic recommendations for promoting exports of identified products/services from the district.
7. State/UT Export Promotion Committees (SEPC): SEPCs are created to synchronize the efforts of the Department of Commerce/DGFT and State/UT governments. They address all export promotion issues at the state level and monitor the progress of DEPCs.
8. Nodal DGFT Regional Authority: The Jurisdictional DGFT Regional Authority is responsible for the Districts under their jurisdiction for all activities related to Districts as Export Hubs initiative.
9. Online Monitoring of DEAP: The DGFT will develop an online monitoring portal for States/DGFT RAs to upload all information related to the products/services with export potential. It also helps in monitoring the progress of the DEAP in all districts.
10. District Outreach Programs: The Jurisdictional DGFT RA collaborates with the State and District administration to conduct awareness and training programs, intending to promote exports from the district.

 

Chapter 4: Duty Exemption / Remission Schemes

This chapter delves into the world of Duty Exemption and Remission Schemes, critical facilitators in global trade transactions. These schemes are designed to support exporters by providing duty-free import of inputs used in export products, effectively enhancing competitiveness in the international market. The chapter outlines the various types of schemes available, their eligibility criteria, and application process, ensuring exporters understand their rights and benefits. From raw materials to components and packaging materials, these schemes are aimed at supporting businesses, promoting economic growth, and encouraging the inflow and outflow of goods in a cost-effective manner.

1. Advance Authorization (AA) Scheme: This scheme allows duty-free import of inputs, which are physically incorporated in the export product. This is in addition to fuel, oil, energy, catalysts, etc. used in the process of production of export goods. The scheme aims to promote substantial value addition in India. The normal validity period for import under AA is 12 months, and the export obligation must be fulfilled within 18 months. AA can be issued either to a manufacturer exporter or merchant exporter tied to supporting manufacturer(s). Revalidation of the AA and extension of export obligation period can be granted as per Section 4.06.

Specifically relating to gems and jewelry industry, as per Section 4.51 and 4.52, exporters can export cut & polished precious and semi-precious stones for treatment and re-import them, and they can also re-import rejected jewelry under AA. This scheme is not transferable and maxim value addition has to be achieved 15% for the imported material exportation.

As per Section 4.53, exporters are allowed to export and import diamond, gemstones & jewelry on a consignment basis under AA.

As per Section 4.7, AA can be issued for the export of articles of jewelry made out of precious metals, allowing duty-free import of gold/silver/platinum.

2. Duty Free Import Authorization (DFIA) Scheme: The DFIA Scheme is issued to allow duty-free import of inputs. On the basis of the SION norms, the inputs are allowed either for the import or domestic procurement. DFIA is transferable if the exporter has fulfilled the minimum 20% export obligation and the inputs regarding the quantity and value are endorsed by the Regional Authority (RA) on the basis of Bill of Entry. The remaining export obligation can be fulfilled by the transferee.

DFIA along with AA promotes value addition in the country, helping to increase India's exports.

3. Remission of Duties and Taxes on Exported Products (RoDTEP) Scheme: This scheme aims to refund the duties/taxes/levies at the Central, State and local level, borne on the exported product, including prior stage cumulative indirect taxes on goods and services used in the production of the exported product. It aims to enhance India's competitiveness in international markets by unburdening the exported products from duties and taxes levied at the domestic level.

As per Sections 4.54 to 4.58, the scheme sets out the objective, operating principles, rebate nature, monitoring, audit and risk management system, and handling of residual issues under the RoDTEP Scheme.

4.51 Export of cut & polished precious and semi-precious stones for treatment and re-import: This section states that gem and jewelry exporters are permitted to export cut and polished precious and semi-precious stones for treatment, and then re-import them in accordance with customs rules and regulations.

4.52 Re-import of rejected Jewellery: This section allows gem and jewelry exporters to re-import rejected precious metal jewelry as per the Handbook of Procedures.

4.53 Export and import on consignment basis: This section allows for the export and import of diamonds, gemstones, and jewelry on a consignment basis following the guidelines of the Handbook of Procedures and Customs Rules and Regulations.

4.54 Scheme Objective and Operating Principles: This section introduces the Scheme for Remission of Duties and Taxes on Exported Products (RoDTEP), which aims to refund currently unrefunded duties/taxes/levies borne on the exported product.

4.55 Ineligible Supplies/ Items/Categories under the Scheme: This section lists the categories of exports/exporters not eligible for rebate under the RoDTEP Scheme.

4.56 Nature of Rebate: The rebate will be issued in the form of an electronic scrip (e-scrip) and can only be used for the payment of basic customs duty.

4.57 Monitoring, Audit and Risk Management System: The section outlines the audit and verification process, requiring exporters to keep records substantiating claims made under the Scheme. A monitoring and audit mechanism with an IT-based Risk Management System (RMS) will be put in place by the Central Board of Indirect Taxes & Customs (CBIC), Department of Revenue.

4.58 Residual Issues: The section discusses the formation of an Inter-Ministerial Committee, named as "RODTEP Policy Committee (RPC)", to deal with residual issues related to the Scheme.

 

Chapter 5: Export Promotion Capital Goods (EPCG) Scheme

This chapter unravels the workings of the Export Promotion Capital Goods (EPCG) scheme, a key instrument of India's export strategy. The EPCG scheme aims to facilitate the import of capital goods for producing quality goods and services to enhance India's export competitiveness. The scheme allows businesses to import capital goods at zero customs duty, thereby reducing capital investment costs. It further highlights the various components of the scheme, its eligibility criteria, obligations, and application process. Through this scheme, the goal is to modernize India's export infrastructure and boost the country's presence in the global marketplace.

1. Capital goods import: It allows for the import of capital goods for pre-production, production, and post-production at zero customs duty. Certain exemptions from taxes and cesses apply.
2. Export Obligation (EO): To balance the duty-free import of capital goods, the scheme imposes an EO, which is a commitment by the importer to export goods of a certain value over a certain period of time. According to this document, the EO is equivalent to six times the duties, taxes, and cess saved on capital goods, to be fulfilled in 6 years.
3. Indigenous sourcing: There's also a provision for sourcing capital goods from domestic (i.e., Indian) manufacturers, which could be incentivized under certain conditions.
4. Coverage: The scheme applies to manufacturers, exporters, and service providers. The rules differ slightly for these various parties.
5. Actual User Condition: Imported capital goods must be used by the actual user until the export obligation is completed.
6. Fulfillment of Export obligation: Various conditions are defined for the fulfillment of the Export obligation.
7. Specific provisions: There are specific provisions for companies in insolvency and bankruptcy, Agro units, and others.
8. Incentives: The scheme provides incentives for early fulfillment of EO and reduced EO for exporters of Green Technology Products or manufacturing units located in certain regions.
9. Transitional Arrangements: Certain arrangements are made for authorizations issued during various policy periods.

Chapter 6: EOU, EHTP, STP, and BTP Schemes

EOU, EHTP, STP, and BTP are special schemes under India's Foreign Trade Policy designed to boost exports and create an internationally competitive environment for exports. Here's a brief explanation of each:

1. Export Oriented Units (EOU): These are units established with the objective of exporting all production. They may be engaged in the manufacturing, services, development of software, trading, repair, remaking, reconditioning, re-engineering, etc. EOUs are expected to be net foreign exchange earners, but they're not subjected to pre-determined value addition or minimum export performance requirements.
2. Electronics Hardware Technology Parks (EHTP): This scheme aims to promote the export of electronic hardware items and components. Units under this scheme enjoy similar incentives and facilities as EOUs.
3. Software Technology Parks (STP): The STP scheme is for the promotion of software exports from the country. Software units may also undertake export trading and export of professional services.
4. Biotechnology Parks (BTP): This scheme aims to promote the export of biotechnological products and related items. Similar to EHTPs and STPs, units under the BTP scheme enjoy various incentives and facilities.

Units under all these schemes enjoy several benefits such as duty-free import, exemption from Goods and Services Tax (GST) in procurement of goods, reimbursement of Central Sales Tax (CST), and benefits under the Income Tax Act. They also enjoy special benefits like flexibility in operations, direct foreign investment up to 100% through automatic route, and no routine examination by customs authorities of export and import cargo.

However, they must meet certain obligations, like positive Net Foreign Exchange earnings over a five-year period and adherence to the terms and conditions of the Letter of Permission/Letter of Intent and other regulations of the scheme.

1. Disposal of Goods from EOU/EHTP/STP/BTP units: These units can dispose of goods by transferring to another such unit, selling in the Domestic Tariff Area (DTA), or exporting. If disposed of in the DTA, applicable duties, taxes, or cess must be paid. Goods transferred from one EOU to another are treated as imports for the receiving unit.
2. Disposal of Obsolete/Surplus Capital Goods and Spares: These goods can be exported, transferred, or sold in the DTA after paying applicable GST and compensation cess. If the unit has achieved positive Net Foreign Exchange (NFE), it may benefit from depreciation.
3. Reconditioning/Repair and Re-engineering: These units can undertake reconditioning, repair, and re-engineering activities for exports. Certain policy provisions don't apply to these activities.
4. Replacement/Repair of Imported/Indigenous Goods: The policy's general provisions for export/import of replacement/repair goods also apply to these units. Goods sold in the DTA that weren't accepted for any reason can be brought back for repair/replacement.
5. Exit from the Scheme: Units can choose to leave the scheme with the approval of the Development Commissioner (DC) or the Designated Officer, provided they pay applicable duties and taxes. If units fail to meet their obligations, they might face penalties upon exit.
6. Conversion: Existing DTA units can apply for conversion into EOU/EHTP/STP/BTP units and vice versa.
7. Monitoring of NFE: The performance of units is monitored by the Unit Approval Committee according to established guidelines.
8. Export through Exhibitions/Export Promotion Tours/Showrooms Abroad/Duty-Free Shops: Units are allowed to participate in exhibitions abroad, carry personal items, display or sell goods in permitted shops abroad, and set up showrooms at international airports.
9. Personal Carriage of Import/Export Parcels: Units can import/export goods personally, but certain conditions apply.
10. Export/Import by Post/Courier: Units can send and receive goods (including free samples) through air freight, foreign post office, or courier.
11. Administration of Units and Powers of DC/Designated Officer: Detailed information about the administration of units and the powers of the DC/Designated Officer is provided in the Handbook of Procedures (HBP).

 

Under the deemed exports policy: Deemed Exports

1. Supply of goods: ABC Manufacturing can supply the required equipment to this project. Even though these goods aren't leaving the country, they are considered "deemed exports" as per the Foreign Trade Policy because they're supplied to a project funded by a bilateral agency.
2. Benefits: ABC Manufacturing is eligible for certain benefits. For instance, they might apply for an Advance Authorisation. This allows them to import inputs used in the manufacture of their equipment duty-free. Or they could claim a Deemed Export Drawback, which is a refund of customs duties paid on the inputs used in manufacturing.
3. Conditions: ABC Manufacturing has to fulfill certain conditions to avail of these benefits. They have to supply the goods directly to the government project. If ABC Manufacturing were a sub-contractor, they could supply to the main contractor for the project, but the payment should be made to them by the main contractor and not by the project authority. Furthermore, if ABC Manufacturing is claiming a refund of terminal excise duty, the recipient of the goods (the government project in this case) should not avail CENVAT credit/rebate on such goods.
4. Risk management and penal action: The transactions and benefits claimed by ABC Manufacturing are subject to scrutiny. If ABC Manufacturing made an error in their application or claimed an ineligible payment, they'd have to repay it along with interest. Also, if ABC Manufacturing submitted a claim by mis-declaring or mis-representing facts, they would be liable for penal action.

In summary, this policy outlines the following: Trade Dispute Portal

1. Objective: This part underlines the importance of maintaining a good image for the country's exporters, ensuring quality products and services, and managing trade disputes amicably. The policy aims to build confidence in the country's business environment and resolve complaints or disputes.
2. Quality Complaints/Trade Disputes: Different types of complaints are considered, including complaints from foreign buyers about the quality of goods, services, or technology supplied by Indian exporters; complaints of importers against foreign suppliers; and complaints of unethical commercial dealings.
3. Obligation on the part of importer/exporter: This part includes provisions that regulate the conduct of importers and exporters, with emphasis on accurate representation of goods' value, quality, and description.
4. Provisions in FT (D&R) Act, 1992, as amended & FT (Regulation) Rules, 1993, as amended for necessary action against erring exporters/importers: This details the actions that can be taken against exporters/importers violating the provisions of the Act or Rules.
5. Mechanism for handling of Complaints/Disputes: A 'Committee on Quality Complaints and Trade Disputes' (CQCTD) will be constituted in the Regional Authorities (RAs) of DGFT. The committee will be responsible for investigating and resolving quality and trade-related complaints.
6. Proceedings under CQCTD: These are conciliatory in nature. Parties are still free to pursue legal action if they desire.
7. Procedures to deal with complaints and trade disputes: Procedures for making complaints and handling them are outlined in the Handbook of Procedures.
8. Corrective Measures: Corrective measures include the Committee at RA level authorizing the Export Inspection Agency to assess technical failures, the settlement of complaints, and action against erring entities.
9. Case Officer and Nodal Officer: A Case Officer will monitor the resolution of disputes at the regional level, while a Nodal Officer, appointed by the Director General of Foreign Trade, will oversee trade disputes at the national level, coordinating with Regional Authorities of DGFT, Foreign Trade Divisions of Department of Commerce, Indian Missions, and other agencies.

 

 

 

Chapter 7: Special Chemicals, Organisms, Materials, Equipment and Technologies

SCOMET is an acronym for Special Chemicals, Organisms, Materials, Equipment and Technologies. The SCOMET list is essentially India's National Export Control List, designed to regulate the exports of dual use items, nuclear-related items, including software and technology. These are items that have potential applications in both civilian industry and weapons of mass destruction (WMDs), and they are either prohibited from being exported or permitted under a specific authorization.

India is a signatory to multiple international conventions on disarmament and non-proliferation, including the Chemical Weapons Convention (CWC) and Biological and Toxin Weapons Convention (BWC). India is also part of major multilateral export control regimes, such as the Missile Technology Control Regime (MTCR), Wassenaar Arrangement (WA), and Australia Group (AG). The SCOMET list aligns with the guidelines and control lists of these international conventions and obligations.

The SCOMET list is divided into nine categories, from 0 to 8, with 7 being reserved. These categories cover various items, including nuclear materials, toxic chemicals, microorganisms, toxins, materials processing equipment and related technologies, aerospace systems and equipment, munitions, and others. The export of these items is managed by different licensing authorities, such as the Department of Atomic Energy (DAE), Directorate General of Foreign Trade (DGFT), and the Department of Defence Production (DDP)/ Ministry of Defence, depending on the specific category.

Export procedures and regulations are outlined for SCOMET items in the Handbook of Procedures (HBP). Depending on the item, an export authorization may need to be issued by DAE or DDP/ Ministry of Defence. There are also additional controls for non-SCOMET items that have potential dual-use (called catch-all controls).

Additionally, there are different types of export authorizations for SCOMET items, ranging from direct export to the ultimate end user to global authorization for intra-company transfers of SCOMET items.

Voluntary self-disclosure of the export of dual-use items is encouraged to avoid any incidents of non-compliance, while strict action will be taken for violation of SCOMET policy in cases other than voluntary self-disclosure.

Chapter 8: Trade Disputes Mechanism

The DGFT (Directorate General of Foreign Trade) has a specific portal to handle to guide you through resolving issues related to Quality Complaints and Trade Disputes on the DGFT platform these concerns and it offers a user-friendly way to manage your applications and rectify any deficiencies

1. Access the System: Login into your account and navigate to "My Dashboard > Submitted Applications".
2. File a Complaint: Select "Quality Complaints and Trade Disputes (QCTD)" from the Type of Scheme dropdown and "File Complaint" from the Type of Sub Scheme dropdown.
3. Enter Details: Complete the application form by filling in the necessary details including the complaint against the importer, the details of the dispute, and any relevant items. If necessary, you may be asked to enter specific details about the nature of the dispute.
4. Attach Documents: You will have the opportunity to attach up to five supporting documents of up to 5MB each. This is done by clicking on "Action (Under the Results)> Attach documents", entering any necessary remarks, attaching your files, and clicking on the "Sign and Submit" button.
5. Respond to Deficiencies: If your application is marked as deficient by a BO officer, you can respond by viewing the deficiency letter issued by the officer and responding to the deficiency. You can do this by clicking on "Action (Under the Results) > Respond Deficiency", viewing the deficiency letter, and clicking on "Respond" under the "Respond to Deficiency" section. You'll be prompted to amend your application if necessary.
6. Confirm Submission: After submitting your response to a deficiency or your initial complaint, a pop-up will confirm your submission, and the life cycle view of your application will update.

Remember, it's crucial to provide as much detail as possible in your complaint to help the officers understand the nature of the dispute. The more concrete evidence you can provide, the more likely it is that your dispute will be resolved satisfactorily.

Chapter 9: Promoting Cross Border Trade in Digital Economy

This chapter of the Foreign Trade Policy is focused on facilitating and promoting cross-border trade through digital means, mainly through e-commerce.

The term e-commerce refers to the selling of goods and services through the internet. In this context, the term e-commerce exports implies exports of goods or services through an online platform, with payment made through international credit/debit cards or other authorised electronic channels as specified by the Reserve Bank of India (RBI) from time to time.

An e-commerce platform is a digital platform, like a web portal, that facilitates the commercial transaction of buying and selling goods or services over the internet.

As for an e-commerce export logistics provider, this refers to any service provider who offers logistical services for exports of goods or services through e-commerce.

Regarding exports through courier service or post, this method of export is allowed as per the notifications issued under the Customs Act, 1962. However, the limit for exports via courier service is Rs. 10,00,000 per consignment.

For instance, if you are an exporter of handmade crafts in India, you might use an e-commerce platform like Etsy to sell your products to international customers. Once a customer in another country purchases one of your products, you would prepare the product for shipment and then use a courier service to send the product to the customer. The payment for this transaction would be processed through the Etsy platform, most likely using an international credit or debit card.

Another key element in this chapter is the concept of e-Commerce Export Hubs (ECEH). These are designated areas set up to provide the necessary business infrastructure for cross-border e-commerce activities. They can offer facilities for storage, packaging, labeling, certification, and testing, and can also provide dedicated logistics infrastructure.

For example, a hypothetical ECEH in Mumbai could be a designated area that hosts multiple e-commerce businesses and provides shared facilities for storage, packaging, and labeling of goods for export. This hub could also provide a dedicated connection to a nearby logistics hub for efficient shipment of goods.

Moreover, the concept of Dak Niryat Kendras is introduced, which will work in a hub-and-spoke model with Foreign Post Offices (FPOs) to facilitate cross-border e-commerce. This aims to enable artisans, weavers, craftsmen, and MSMEs even in land-locked regions to reach international markets.

For example, an artisan in rural Rajasthan could use a local Dak Niryat Kendra to ship handcrafted goods sold through an e-commerce platform to international customers. The Kendra would facilitate the process, ensuring the goods reach the nearest FPO and ultimately the overseas customer.

 

Conclusion: Comprehensive Foreign Trade Policy

In conclusion, the government of India, through its robust and comprehensive Foreign Trade Policy, has demonstrated a clear commitment to promoting and facilitating international trade. The policy extends beyond the realm of e-commerce to encompass all avenues of export, effectively addressing the varied needs of exporters and importers alike.

The services offered by Barai Oversea Export Import Consultation can significantly aid in addressing these questions. They can provide:

1. Guidance: Their team of experienced consultants can provide step-by-step guidance on how to navigate the complexities of the FTP, helping you understand the various provisions and how they apply to your specific business situation.
2. Compliance Support: They can assist in ensuring that your business operations comply with the FTP's requirements and help you understand your legal and regulatory obligations.
3. Access to Incentives: They can help you identify and apply for the various incentives, schemes, and concessions available under the FTP that could benefit your business.
4. Updates and Changes: They can keep you informed about changes and updates to the FTP, allowing you to adjust your business operations accordingly.
5. Industry-Specific Advice: Their consultants, with industry-specific knowledge, can help you understand the specific import and export regulations that apply to your products or services.
6. Dispute Resolution: They can provide advice on handling trade disputes or quality complaints, guiding you through the dispute resolution mechanisms available under the FTP.

With the guidance and expertise of the Export Import Guru, you can make well-informed decisions, ensure compliance with the FTP, and potentially enhance the prosperity and success of your business.

It is evident that through the Foreign Trade Policy, the government has undertaken a wide array of positive measures to bolster India's position in the global trade landscape. The efforts are not limited to addressing present needs but are designed with an eye on future trends and opportunities, reinforcing India's growth story in the global economy.

I strongly recommend that you refer directly to the FTP 2023 document or the official DGFT website for the most accurate and reliable information.