1. Foreign Trade Policy Of India Since 1980INTRODUCTIONTraditionally, the main objective of the Indian ForeignTrade Policy has been to protect itsmarket from foreign competition. Up until the 1980s, India was not interested in exporting itsgoods and services abroad and not ready to open its economy to foreign investments. The aimof its economic policy was to ensure the countrys independent development (the swadeshiprinciple). At the end of the 1980s, India was one of the most closed economies in the world.Its bilateral trade policy, heavily skewed toward the former communist countries, was full ofgrand statements about technology transfer, mutually advantageous relations and partnershipfor development to very little purpose.Import Policy Prior to 1991In the pre-reform period Indian import policy had two constituents:Import Restrictions: In the initial phases of development, India had to import capitalequipment, machinery, spare parts, industrial raw material, etc. From time to time it had toimport food grains too, but because of stagnant exports, government had to decide to importcurtail. High import tariffs were used to control import.Import Substitution : Import substitution means reducing the dependability on imports, i.e.,produce goods that we are importing. Two broad objectives of the programme of importsubstitution in India were:(i) To save scarce foreign currency for the import of more important goods,(ii) To achieve self-reliance in the production of as many goods as possible.EXPORT - IMPORT POLICY 1992-97Opening Remarks of Mr.P.Chidambaram Minister of State for Commerce on the New Export -Import Policy Announced on 31.3.1992 .The objectives of the trade policy go far beyond mere balancing of imports and exports or afavorable balance of trade. There is growing interdependence among technology, investmentand production. Trade policy should, therefore, be the spearhead for better technology,greater investment and more efficient production.While our goal of a self-reliant and dynamic economy remains the same, we have discardedsome assumptions. We have also shed the mood of export pessimism. We believe that imports

2. and exports, taken together, could account for as much as 20% of GDP and it is our aim toachieve this level of trade. The trade policy reforms announced so far have, therefore, been indirection of liberalisation and removal of licensing, quantitative restrictions and otherdiscretionary controls.The Export and Import Policy is an integral part of trade policy. Since the direction of economicreforms is clear, the direction of the new Export and Import Policy is also clear - fewerrestrictions, greater freedom to trade and less administrative controls. The new Export andImport Policy is a major step forward in the programme of liberalisation. Stability is anotherkey element in the new policy. As far as possible, changes will be made only once in everyquarter. The highlights of the new Export and Import Policy are contained in the attachedsheets.The Bill replaces the Import and Export (Control) Act, 1947. The law relating to foreign tradewill comprise the new Act, the Rules and Orders made there under and the new Export andImport Policy. Violation of the law will attract monetary penalties, confiscation of goodsand/or suspension or cancellation of licence. In introducing the new Bill and making the newPolicy, Government has acted on the principle of trust. We trust that trade, industry andbusiness will respond positively to the policy initiatives taken by Government. We trust thattheir behaviour will be rational and responsible. Government looks forward to working closelywith trade, industry and business in order to achieve the high and ambitious goals that wehave set for ourselves.HIGHLIGHTS OF NEW EXPORT & IMPORT POLICYGENERAL1. Trade is free, subject only to a Negative List of Imports and a Negative List of Exports.2. Stable policy for five years 1992-97. The aid is simplicity and transparency.IMPORTS3. Negative List of Imports is the smallest ever. Consumer goods will continue to be underrestraint.4. Import of 3 items banned, 68 items restricted, 8 items canalised.5. Special import facilities for Hotels & Tourism industry and for Sports bodiesEXPORTS 3. 6. Export of 46 items permitted with minimum regulation.LICENSING8. Negative Lists to be administered, as far as possible, by general schemes.Case-by-caselicensing will be minimised.9. Actual User condition eliminated except in a few special cases.CAPITAL GOODS10. Import of capital goods liberalised. No longer in Negative List of Imports.11. Export promotion Capital goods allowed. In some sectors without licence, in others underlicence.12. Export Promotion Capital Goods (EPCG) scheme liberalised. Two windows opened forconcessional duty imports:Rate of Period for Concessional Export obligation fulfillment of Customs duty export obligation25% CIF Value 3 times CIF Value 4 Years 15% CIF Value 4 times CIF Value 5 Years13. EPCG scheme extended to components of capital goods, with concessional customs duty of15%.RAW MATERIALS14. Imports liberalised. Barring few items, no longer in Negative List of Imports.ADVANCE LICENCES15. Value-based Advance licence introduced .16. Self-certification Advance Licence available for Export Houses, Trading Houses and StarTrading Houses.17. All licences under duty exemption schemes transferable.DIAMONDS, GEMS AND JEWELLERY18. Existing schemes continued with little modification.EOUs/Units under EPZs.19. EOU scheme & EPZscheme liberalised. 4. 20. Schemes extended to agriculture, horticulture, acquaculture, poultry and animalhusbandry.21. Inter-unit transfers allowed.22. Permission to install machinery on lease.23. EOU/EPZ units may export through Export Houses, Trading Houses and Star TradingHouses.DEEMED EXPORTS24. Definition of Deemed Exports streamlined. Supplies toEOU/EPZ units, supplies againstEPCG licences and supplies against Advance Licences will be deemed exports.EXPORT PROMOTION COUNCILS, EXPORT HOUSES, TRADING HOUSES AND STAR TRADINGHOUSES.25. Crucial role of EPCs, Export Houses, Trading Houses and StarTrading Houses recognised.26. Importer-Exporter Code Number is basic requirement.27. Registration-cum-Membership Certificate (RCMC) by EPCs is a basic requirement forbenefits and concessions under new policy.SPECIAL IMPORT LICENCES28. Three categories eligible for Special Import Licences. :1) Deemed Exports2) Export Houses, Trading Houses and Star Trading Houses3) Manufacturers with ISO 9000 or BIS 140000 certification.QUALITY29. National campaign for quality awareness to be launched.30. Laboratories/Testing Houses to be upgraded and accredited.Export- Import (EXIM) Policy 2002-07In order to maintain the balance of payments and to avoid trade deficit the government of 5. India has announced a trade policy for imports and exports. After every five years thegovernment of India reviews the import and export policy in view of the changinginternational economic situation. The policy relates to promotion of exports and regulation ofimports so as to promote economic growth and overcome trade deficit. Accordingly, theexport-and import policies (EXIM Policy) were announced by the government first in 1985 andthen in 1988 which was again revised in 1990. All these policies made necessary provision forextension of import liberalisation measures. All these policies made necessary provision forimport of capital goods and raw materials for industrialisation, utilisation and liberalisation ofREP (Registered Exporters Policy) licences, liberal import of technology and policy for exportand trading houses. The government announced its new EXIM policy for 2002-2007 which ismainly a continuation of the EXIM policy of 1997-2002. The new export-import policy for 2002-2007 aims at pushing up growth of exports to 12 per cent a year as compared to about 1.56per cent achieved during the financial year 2001-2002.The main features of this export- import policy are given below:--Concessions to exportersTo enable Indian companies to compete effectively in the competitive international marketsand to give a boost to sagging exports various concessions had been given to the exporters inthis new EXIM policy 2002-2007. These concessions are: Exporters will now have 360 days to bring in their foreign exchange remittances as comparedto the earlier limit of 180 days. Exporters will be allowed to retain the entire amount held in their exchange earner foreigncurrency (EEFC) accounts. Exporters will now get long-term loans at the prime lending rate for that tenure.Duty Entitlement Pass Book (DEPB) and Export Promotion Capital Goods (EPCG)Schemes: DEPB and EPCG are important tools of promoting exports. These schemes havebeen made more flexible. In the DEPB and EPCG schemes new initiatives have been grantedto the cottage industries, handicrafts, chemicals and pharmaceuticals, textile and leatherproducts.Strengthening Special Export Zones (SEZ): The new long-term EXIM policy has sought toenable Indian SEZs to be at par with its international rivals. The EXIM policy has given a boostto the banking sector reforms by permitting Indian banks to set up overseas banking units inSEZs. This means that exporters operating out of the SEZ units and developers would bepermitted to hold dollar accounts and of overseas banking units operating out of the SEZswould be able to deal in multiple currencies.Soft options for computer hardware industry: The export import (EXIM) policy has put the 6. Indian computer manufacturers at par with manufacturers in other parts of the world.Companies manufacturing or assembling computers in the country will be able to import bothcapital and raw materials at lower duty rates to sell in the domestic market. The EXIM policyhas also removed the export obligations on these manufacturers against imports being madeby them .This puts the Indian manufacturers at par with manufacturers in China free tradezone and the Dubai Jebel Ali free trade zone.As per the information technology agreement which is part of the world trade organisationzero duty the agreement on I. T. sector, 217 I. T. components would attract a zero duty by2005. Therefore, foreign companies can import these products into the country while Indianmanufacturers who did the same had to meet export obligations on their imports. Now, thenew EXIM policy states that domestic sales will be considered as a fulfilment of the exportobligation, thereby freeing the domestic manufacturers from exports completely.Appraisal of the EXIM policy 2002-2007: The Chambers of Commerce of Indian Industrynamely CII and PHDCCI welcomed the new EXIM policy 2002-2007 and described it as positiveand pro-group. They are however pointed out that time bound implementation andcooperation from the states would be the key to achieving the target of taking India's share ofworld trade to 1%.Foreign Trade Policy 2004-2009: The UPA government announced its foreign trade policy for afive-year period (2004-2009) on 31st of August 2004. This new trade policy carries further theprocess of trade liberalisation .Exemptions and incentives given in the earlier policy of 2002-07and the Mini EXIM policy 2004, has not been changed and new measures for promotion ofexports have been provided.The new foreign trade policy aims to double India's share of world merchandise trade in thenext five years. In line with the UPA government's priority to employment generation, foreigntrade policy also focuses on employment generation through an appropriate export strategy.Employment opportunities will increase as a result of expansion of agricultural exports forwhich the new policy provides special incentives .Other sectors identified for employmentgeneration and export promotion includes handlooms, handicrafts, gems and jewellery, andleather and footwear, apart from services.Focus on agro-exports to boost export growth: The new foreign trade policy moots a specialpackage to boost aggro-exports by offering fiscal incentives to exporters. A special schemecalled Vishesh Krishi Upaj Yojana has been launched to promote the export of fruits,vegetables, flowers and minor forest produce and permission for duty-free imports of capitalgoods for installation anywhere in the agri-export zones (AEZ). The procedures for the importof sales, bars, tubers and planting material and the export of plant portion, derivatives andextracts had been liberalised. This will help boost the export of medicinal plants and herbal 7. products.Exemption of exports from service tax: A significant measure to promote exports is thatexport of all goods and services had been exempted from 10% service tax and 2% cess on it.Export Oriented Units (EOU) has also been given exemption from service tax in proportion oftheir exported goods and services.Promoting exports of services: Recognizing the key role of the service sector in the economy,the foreign trade policy has announced the Served from India scheme to accelerate growthin service exports. The policy also announced to other major initiatives to boost serviceexports .These are promotion of a Common facility centre for home-based service providersand higher duty-free credit on incremental exports to those exporters who achieved quantumgrowth.New export promotion schemes: In the new foreign trade policy, three new schemes havebeen introduced and others had been revamped to boost exports. No existing exportpromotion scheme has been withdrawn. The new schemes are Vishesh Krishi Upaj Yojana,Target Plus and Free Trade and Warehousing Zones (FTWZ). All these schemes have beenlaunched to accelerate export growth and they had been provided special incentives such asduty free credit entitlement if exports grow by 25%. The duty-free entitlement goes up to 15%of incremental exports if exports grow by hundred percent during the year.Establishment of biotechnology parts: These parts which have been identified will get all thefacilities of hundred percent export oriented units. In this regard, sectors with significantexport and employment potential in rural areas have been identified.Restrictions on imports of second-hand capital goods waived: For the first time all capitalgoods regardless of age are made freely importable without any actual use, user condition orrequirement of minimum residual life. Free imports of second-hand machinery are expectedto bring down the cost of investment and strengthening the forces of industrial restructuring.However free imports does not apply to computers and laptops.Free transferability of Duty Free Entitlement Credit Certificates (DFECC): The mainimprovement in the DFECC scheme is that the portion related to agriculture exports is freelytransferable. It will make this incentive attractive and give a push to the agriculture exportzones. (AEZs)Appraisal of the new foreign trade policy, 2004-09: The Chambers of commerce and industry(CII) have welcomed the new foreign trade policy. The chamber has appreciated thegovernment's efforts to make India's exports competitive and to increase the exports from allsectors of the economy. The new foreign trade policy seeks to double India's share of globalexports from 0.8% to 1.5% in the next five years .The prime driver of exports in a globalising 8. economy is competitiveness and competitiveness is created by a range of factors, very few ofwhich are in the hands of the government.NEW TRADE POLICY 19911. Free Import and Export :Import of OGL capital goods, non-OGL capital goods and restricted goods would be allowedwithout a specific license, provided clearance was given by the RBI and foreign exchange,because their imports are fully covered by foreign equity.2. Rationalisation Of Tariff StructureOn the recommendation of Chelliah Committee, import duty was drastically reduced toestablish parity in prices of goods produced domestically and internationally. The 1993-94Budget reduced the maximum rate of duty on all goods from 110% to 85%, except for fewgoods, which was further reduced to 40% in 1998-99 and further to 35% in 2000-013. DecanalisationThe new trade policy aimed at progressive decanalisation. The government decontrolled 116items allowing their exports without any licensing formalities.Another 29 items were shifted to OGL. It also decanalised 16 export items and 20 importitems including new print, non ferrous metals, natural rubber, intermediate and raw materialfor fertilizers. However, eight items (petroleum products, fertilisers, etc.) remained canalised.4. Devaluation and Convertibility of Rupee on Current AccountThe government made a two- step downward adjustment of 18-19 per cent in the exchangerate of the rupee on July 1 and July 3, 1991. This was followed by the introduction of LERMSi.e., partial convertibility of rupee in 1992-93, full convertibility on the trade account in 1993-94 and full convertibility on the current account in August 1994.Substantial capital account liberalisation measures have also been announced. The exchangerate of the rupee is now market-determined. Thus, exchange rate policy in India has evolvedfrom the rupee being pegged to a market related system (since March 1993).5. Trading HousesThe 1991 policy allowed export houses and trading houses to import a wide range of items.The government also permitted the setting up of trading houses with 51 per cent foreignequity for the purpose of promoting exports. 9. 6. Phased Manufacturing ProgrammePMP, according to which organisations were required to substitute all the imported parts withIndian parts in a specified period, was abolished7. Export Oriented Units, (EOUs), Electronic Hardware Parks (EHTP), Software TechnologyParks (STPs) and Bio-Technology Parks (BTPs)The units undertaking to export their entire production of goods and services may be set upunder the Export Oriented Unit (EOU) Scheme, Electronics Hardware Technology Park (EHTP)Scheme, Software Technology Park (STP) Scheme or Bio-Technology Park (BTP) Scheme formanufacture of goods, including repair, re-making, reconditioning, reengineering andrendering of services. Trading units are not covered under these schemes.8. Free Trade & Warehousing ZonesThe Free Trade & Warehousing Zones (FTWZ) shall be a special category of Special EconomicZones with a focus on trading and warehousing. The objective of FTWZ is to create trade-relatedinfrastructure to facilitate the import and export of goods and services with freedomto carry out trade transactions in free currency. These Zones would be established in thenearby areas to seaports, airports or dry ports so as to offer easy access by rail and road.9. Deemed ExportsDeemed Exports refer to those transactions in which goods supplied do not leave country, andpayment for such supplies is received either in Indian rupees or in free foreign exchange.Following categories of supply of goods by main/subcontractors shall be regarded as DeemedExports under FTP, provided goods are manufactured in India:1) Supply of goods against Advance Authorisation /Advance Authorisation for annualrequrrement/DFIA;2) Supply of goods to EOU/STP/EHTP/BTP;3) Supply of captial goods to EPCG Authorisation holders4) Supply to projects funded by UN AgenciesBesides all these, various concessions and exemptions were granted during the nineties toliberalise imports and promote exports. Liberalisation also allowed FDI in many sectors.Foreign companies are allowed to open branch offices, foreign technology agreements wereallowed, and the Foreign Investment Promotion Board (FIPB) was established to process and 10. give speedy approvals for foreign investment proposals. Automatic approval was allowed fortechnical collaboration and foreign equity participation up to 51% in Indian companies in 34%high priority industries.The Highlights of the Indias Foreign Trade Policy 2004-2009The new United Progressive Alliance (UPA) Government at the Centre changed the name ofEXIM Policy and called it Foreign Trade Policy (FTP). Consequently, on August 31, 2004, theCommerce and Industry Minister, Mr. Kamal Nath, announced the five year (2004-09) FTP.The policy aims at doubling Indias percentage share of global merchandise trade to 1.5 percent by 2009 from 0.7 per cent in 2003, besides serving as an effective tool to generateemployment, especially in semi-urban and rural areas.Exporters of all goods and services, including those from Domestic Tariff Area (DTA), wereexempted from service tax. Also exporters with minimum turnover of Rs. 5 crore and a soundtrack record have been exempted from furnishing bank guarantees in any of the exportschemes. So as to reduce their high transaction cost and tax burden.NEW FOREIGN TRADE POLICY 2009-2014 HIGHLIGHTSNEW FOREIGN TRADE POLICY 2009-2014The Honble Union Commerce & Industry Minister Mr.Anand Sharma announced the newForeign Trade Policy 2009 - 2014 in New Delhi on 27th August, 2009.Mr.JyothiradityaMadhavrao Scindia, Minister of State for Commerce; Dr. Rahul Khullar, Commerce Secretary,Ministry of Commerce & Industry and other dignitaries were present on the occasion.Various Suggestions of the Federation have been considered in the New Foreign Trade Policylike - Continuation of DEPB scheme; Enhancement of incentives under promotionalschemes; Benefits to Status Holders; Zero duty EPCG Scheme; Rationalization of additionalexport obligation under EPCG; Additional markets under focus market scheme; Additionalproducts under Focus Product Scheme; Transferability of Duty Scrip under Para 3.8.6 of FTP;Flexibility in import of items against Duty Credit Scrips issued under earstwhile in TargetPlus/DFCE Schemes; Removal of Handloom Mark under Focus Product Scheme; Issues relatingto transaction costs; Tangible benefits to town of export excellence; MDA Scheme; TechnologyFund, etcHIGHLIGHTS OF THE NEW FOREIGN TRADE POLICY ARE AS UNDER: 11. Higher Support for Market and Product Diversification Incentive schemes under Chapter 3 have been expanded by way of addition of newproducts and markets. 26 new markets have been added under Focus Market Scheme. These include 16 newmarkets in Latin America and 10 in Asia-Oceania. The incentive available under Focus Market Scheme(FMS) has been raised from 2.5% to3%. The incentive available under Focus Product Scheme (FPS) has been raised from 1.25%to 2%. A large number of products from various sectors have been included for benefits underFPS. These include, Engineering products (agricultural machinery, parts of trailers,sewing machines, hand tools, garden tools, musical instruments, clocks and watches,railway locomotives etc.), Plastic (value added products), Jute and Sisal products,Technical Textiles, Green Technology products (wind mills, wind turbines, electricoperated vehicles etc.), Project goods, vegetable textiles and certain Electronic items. Market Linked Focus Product Scheme (MLFPS) has been greatly expanded by inclusionof products classified under as many as 153 ITC(HS) Codes at 4 digit level. Some majorproducts include; Pharmaceuticals, Synthetic textile fabrics, value added rubberproducts, value added plastic goods, textile madeups, knitted and crocheted fabrics,glass products, certain iron and steel products and certain articles of aluminium amongothers. Benefits to these products will be provided, if exports are made to 13 identifiedmarkets (Algeria, Egypt, Kenya, Nigeria, South Africa, Tanzania, Brazil, Mexico, Ukraine,Vietnam, Cambodia, Australia and New Zealand). MLFPS benefits also extended for export to additional new markets for certain products.These products include auto components, motor cars, bicycle and its parts, and apparelsamong others. A common simplified application form has been introduced for taking benefits underFPS, FMS, MLFPS and VKGUY. Higher allocation for Market Development Assistance (MDA) and Market AccessInitiative (MAI) schemes is being provided.Technological Upgradation To aid technological upgradation of our export sector, EPCG Scheme at Zero Duty hasbeen introduced. This Scheme will be available for engineering & electronic products,basic chemicals & pharmaceuticals, apparels & textiles, plastics, handicrafts, chemicals& allied products and leather & leather products (subject to exclusions of currentbeneficiaries under Technological Upgradation Fund Schemes (TUFS), administered byMinistry of Textiles and beneficiaries of Status Holder Incentive Scheme in thatparticular year). The scheme shall be in operation till 31.3.2011. 12. Jaipur, Srinagar and Anantnag have been recognised as Towns of Export Excellence forhandicrafts; Kanpur, Dewas and Ambur have been recognised as Towns of ExportExcellence for leather products; and Malihabad for horticultural products.EPCG Scheme Relaxations To increase the life of existing plant and machinery, export obligation on import ofspares, moulds etc. under EPCG Scheme has been reduced to 50% of the normal specificexport obligation. Taking into account the decline in exports, the facility of Re-fixation of Annual AverageExport Obligation for a particular financial year in which there is decline in exports fromthe country, has been extended for the 5 year Policy period 2009-14.Support for Green products and products from North East Focus Product Scheme benefit extended for export of green products; and forexports of some products originating from the North East.Status Holders To accelerate exports and encourage technological upgradation, additional DutyCredit Scrips shall be given to Status Holders @ 1% of the FOB value of past exports.The duty credit scrips can be used for procurement of capital goods with Actual Usercondition. This facility shall be available for sectors of leather (excluding finishedleather), textiles and jute, handicrafts, engineering (excluding Iron & steel & non-ferrousmetals in primary and intermediate form, automobiles & two wheelers,nuclear reactors & parts, and ships, boats and floating structures), plastics and basicchemicals (excluding pharma products) [subject to exclusions of current beneficiariesunder Technological Upgradation Fund Schemes (TUFS)]. This facility shall beavailable upto 31.3.2011. Transferability for the Duty Credit scrips being issued to Status Holders underparagraph 3.8.6 of FTP under VKGUY Scheme has been permitted. This is subject tothe condition that transfer would be only to Status Holders and Scrips would beutilized for the procurement of Cold Chain equipment(s) only.Stability/ continuity of the Foreign Trade Policy To impart stability to the Policy regime, Duty Entitlement Passbook (DEPB) Scheme isextended beyond 31-12-2009 till 31.12.2010. Interest subvention of 2% for pre-shipment credit for 7 specified sectors has beenextended till 31.3.2010 in the Budget 2009-10. 13. Income Tax exemption to 100% EOUs and to STPI units under Section 10B and 10A ofIncome Tax Act, has been extended for the financial year 2010-11 in the Budget2009-10. The adjustment assistance scheme initiated in December, 2008 to provide enhancedECGC cover at 95%, to the adversely affected sectors, is continued till March, 2010.Marine sector Fisheries have been included in the sectors which are exempted from maintenanceof average EO under EPCG Scheme, subject to the condition that Fishing Trawlers,boats, ships and other similar items shall not be allowed to be imported under thisprovision. This would provide a fillip to the marine sector which has been affected bythe present downturn in exports. Additional flexibility under Target Plus Scheme (TPS) /Duty Free Certificate ofEntitlement (DFCE) Scheme for Status Holders has been given to Marine sector.Gems & Jewellery Sector To neutralize duty incidence on gold Jewellery exports, it has now been decided toallow Duty Drawback on such exports. In an endeavour to make India a diamond international trading hub, it is planned toestablish Diamond Bourse (s). A new facility to allow import on consignment basis of cut & polished diamonds forthe purpose of grading/certification purposes has been introduced. To promote export of Gems & Jewellery products, the value limits of personalcarriage have been increased from US$ 2 million to US$ 5 million in case ofparticipation in overseas exhibitions. The limit in case of personal carriage, assamples, for export promotion tours, has also been increased from US$ 0.1 million toUS$ 1 million.Agriculture Sector To reduce transaction and handling costs, a single window system to facilitate exportof perishable agricultural produce has been introduced. The system will involvecreation of multi-functional nodal agencies to be accredited by APEDA.Leather Sector Leather sector shall be allowed re-export of unsold imported raw hides and skins andsemi finished leather from public bonded ware houses, subject to payment of 50% ofthe applicable export duty. 14. Enhancement of FPS rate to 2%, would also significantly benefit the leather sector.Tea Minimum value addition under advance authorisation scheme for export of tea hasbeen reduced from the existing 100% to 50%. DTA sale limit of instant tea by EOU units has been increased from the existing 30%to 50%. Export of tea has been covered under VKGUY Scheme benefits.Pharmaceutical Sector Export Obligation Period for advance authorizations issued with 6-APA as input has beenincreased from the existing 6 months to 36 months, as is available for other products. Pharma sector extensively covered under MLFPS for countries in Africa and LatinAmerica; some countries in Oceania and Far East.Handloom Sector To simplify claims under FPS, requirement of HandloomMark for availing benefitsunder FPS has been removed.EOUs EOUs have been allowed to sell products manufactured by them in DTA upto a limit of90% instead of existing 75%, without changing the criteria of similar goods, within theoverall entitlement of 50% for DTA sale. To provide clarity to the customs field formations, DOR shall issue a clarification toenable procurement of spares beyond 5% by granite sector EOUs. EOUs will now be allowed to procure finished goods for consolidation along with theirmanufactured goods, subject to certain safeguards. During this period of downturn, Board of Approvals (BOA) to consider, extension ofblock period by one year for calculation of Net Foreign Exchange earning of EOUs. EOUs will now be allowed CENVAT Credit facility for the component of SAD andEducation Cess on DTA sale.Thrust to Value Added Manufacturing To encourage Value Added Manufactured export, a minimum 15% value addition onimported inputs under Advance Authorization Scheme has now been prescribed. Coverage of Project Exports and a large number of manufactured goods under FPS andMLFPS. 15. DEPB DEPB rate shall also include factoring of custom duty component on fuel where fuel isallowed as a consumable in Standard Input-Output Norms.Flexibility provided to exporters Payment of customs duty for Export Obligation (EO) shortfall under AdvanceAuthorisation / DFIA / EPCG Authorisation has been allowed by way of debit of DutyCredit scrips. Earlier the payment was allowed in cash only. Import of restricted items, as replenishment, shall now be allowed against transferredDFIAs, in line with the erstwhile DFRC scheme. Time limit of 60 days for re-import of exported gems and jewellery items, forparticipation in exhibitions has been extended to 90 days in case of USA. Transit loss claims received from private approved insurance companies in India willnow be allowed for the purpose of EO fulfillment under Export Promotion schemes. Atpresent, the facility has been limited to public sector general insurance companies only.Waiver of Incentives Recovery, On RBI Specific Write off In cases, where RBI specifically writes off the export proceeds realization, the incentivesunder the FTP shall now not be recovered from the exporters subject to certainconditions.Simplification of Procedures To facilitate duty free import of samples by exporters, number of samples/pieces hasbeen increased from the existing 15 to 50. Customs clearance of such samples shall bebased on declarations given by the importers with regard to the limit of value andquantity of samples. Greater flexibility has been permitted to allow conversion of Shipping Bills from oneExport Promotion scheme to other scheme. Customs shall now permit this conversionwithin three months, instead of the present limited period of only one month. To reduce transaction costs, dispatch of imported goods directly from the Port to thesite has been allowed under Advance Authorisation scheme for deemed supplies. Atpresent, the duty free imported goods could be taken only to the manufacturing unit ofthe authorisation holder or its supporting manufacturer. Disposal of manufacturing wastes / scrap will now be allowed after payment ofapplicable excise duty, even before fulfillment of export obligation under AdvanceAuthorisation and EPCG Scheme. 16. Automobile industry, having their own R&D establishment, would be allowed freeimport of reference fuels (petrol and diesel), upto a maximum of 5 KL per annum, whichare not manufactured in India.Reduction of Transaction CostsNo fee shall now be charged for grant of incentives under the Schemes in Chapter 3 of FTP.Further, for all other Authorisations/ licence applications, maximum applicable fee is beingreduced to Rs. 100,000 from the existing Rs 1,50,000 (for manual applications) and Rs. 50,000from the existing Rs.75,000 (for EDI applications).Directorate of Trade Remedy Measures To enable support to Indian industry and exporters, especially the MSMEs, in availingtheir rights through trade remedy instruments, a Directorate of Trade RemedyMeasures shall be set up.SEZ In IndiaExport-led economic growth has been an important part of the economic strategy prescribedto developing countries for their progress and development especially since the 1970s. Thefirst Export Processing Zone(EPZ) was set up in Ireland in 1959 and the first EPZ in Asia wasestablished in India at Kandla in 1965.In later years, the concept EPZ has gradually beenreplaced by SEZ. Between 1975 and 2006, the number of Free Zones has shot up from 79 in 25countries to 3500 in 130 countries. Over the last decade, many new zones have beendeveloped in Africa. Eastern Europe and transitional economies. The idea behind SEZs was topromote and create hassle-free territorial production complexes that could be established tosecure regional balance in development opportunities.The major contributions of SEZs for the development of the economy are briefly accounted asfollows;1. The SEZs attract foreign and domestic investment in enclaves. Because of the provision offacilities and amenities on the one hand and incentives on the other, the capital flows in.2. The SEZs stimulate exports. This is the major purpose of the SEZs.3. The SEZs cannot be counted as a solution to the unemployment problem, for they are aviable source of employment creation. 17. 4. The creation of SEZ leads to balanced development of the region. Though it is good todevelop all the regions simultaneously, such balanced development requires a lot of resourcesat a time. the regional development can be undertaken in stages. Thus, to develop certainareas as leading areas, SEZs is a solution.ConclusionInternational Business plays a crucial role in the economic development of a nation as it leadsto industrialization, employment and reduction of scarcity of consumer goods. Our share ofworld trade has significantly increased over the years. At present, International Businessopportunity in India exists in areas like IT, Telecom, R&D, Infrastructure, Retailing, etc. Sectorslike health, education, housing, water resources, SMEs are untapped and offer huge scope.