EXPORT MADE EASY!
HOW TO START AND EXCEL IN YOUR EXPORTS AND MAKE OPTIMUM OUT OF EXPORT PROMOTION SCHEMES
[Question and answer format of this article on Exports appeared in one of the issues of Silk Mark Vogue. The author is Shri. Ajay Srivastava ITS, Director (Ministry of Commerce, Govt. of India), a renowned expert on foreign trade]
I need to obtain cheapest raw material for producing export goods. What are the schemes available for competitive sourcing of raw materials for use in export production?
Advance Authorisation, DEPB and Duty Drawback schemes are major Duty Exemption and Remission schemes for competitive sourcing of raw materials used for export production. These are time tested schemes used by majority of exporters. Reference: Para 4.1 of Foreign Trade Policy (2009-14)
What are the basics of Advance Authorisation Scheme?
Advance Authorisation enables an exporter to import duty-free inputs required for export production well in advance. The duty free inputs are allowed as per norms fixed by DGFT. The Standard Input Output Norms for appox. 7000 items have already been notified for this purpose.
Such Authorisation carry an export obligation to be fulfilled over a specified period. Advance Authorisations are issued for physical export, Intermediate supplies and Deemed exports. Advance licenses are issued on the basis of annual requirement for export supplies. This enables the exporter to plan out his manufacturing/export programme on long term basis.
Do I have to pay antidumping duty if I am importing under the Advance Authorisations? What import duties are exempted from payment under the AA scheme?
If you are importing under Advance Authorisations, imports are exempted from payment of:
- Basic Custom duty
- Additional custom duty
- Educational cess
- Anti-dumping duty
- Safeguard duty, if any
However, imports for supplies covered under Para 8.2(h) & (i) will not be exempted from payment of applicable anti-dumping and safeguard duty, if any.
Reference: Para 4.1.4 of Foreign Trade Policy (2009-14)
What category of items cannot be exported under the Advance Authorisation?
Prohibited items of export mentioned in ITC (HS) cannot be exported under the AA scheme. Restricted items can be exported; however the exporter shall be subject to conditionality prescribed under Schedule II of ITC (HS)
Reference: Para 4.1.13 of Foreign Trade Policy (2009-14)
What are the various Export Promotion schemes under which exporters can avail considerable benefits against their exports? Please provide a list of all major schemes at one place.
The major Export Promotion schemes provided by the Exim policy under which exporters can avail benefits are listed below:
| Sr. No | Category | Purpose/Availability | Scheme |
| 1 | Scheme for sourcing raw material | Scheme for import of raw material | Advance Authorisation schemeDuty-free import authorisation (DFIA) |
| Schemes for neutralization/refund of duties paid | Duty Entitlement Pass-book (DEPB) schemeDrawback scheme | ||
| 2 | Scheme for importing capital goods | All sectors requiring capital goods | Export Promotion Capital (EPCG) scheme |
| 3 | Scheme for specific sectors | Diamond, gold sector | Gem & Jewelry Export Promotion scheme |
| Service sector | Served From India scheme (SFIS) | ||
| Agriculture and village industry sector | Vishesh Krishi and Gram Udyog Yojana (VKGUY)Scheme for import of capital goods for the Agriculture product exportsAgriculture Export development schemes implemented by APEDA | ||
| Small scale sector | Schemes for Assistance to the micro and small enterprises (MSEs) | ||
| 4 | Scheme for specific product & markets | Available to notified products and markets | Focus Market Scheme (FMS)Focus Product Scheme (FPS)Market Linked Focus Product scheme |
| 5 | Schemes for supplies within the country | Available to eligible supplies | Deemed exports |
| 6 | Special Enclave for exports | Dominant portion of production must be exported | Special Economic Zones (SEZ)100% Export Oriented Units (EOU) |
| 7 | Special export promotion schemes | Recognition of exporters based on performance | Recognition of exporters as Export, Trading HousesStatus Holders Incentive Scrip |
| Schemes for market development related assistance like providing money for participation in overseas exhibitions | Market Development Assistance (MDA) scheme implemented by Department of CommerceSSI-MDA scheme for SSI Exporters | ||
| Scheme for providing assistance for export efforts through projects and studies, fighting legal cases etc. | Market Access Initiative (MAI) | ||
| Scheme for export related infrastructure development | Assistance to states for infrastructure Development of Export (ASIDE) | ||
| Schemes for promoting export clusters | Towns of Export Excellence (TEE) | ||
| Scheme for complying pre-shipment, quality requirements | Pre-shipment inspection | ||
| 8 | Duty Free Import entitlements | Scheme for allowing duty free imports based on past year�s export performance | Scheme available for specified priority sectors |
| 9 | Customs & Excise duty exemption | Scheme for allowing duty free imports for use in specific sectors | Notified through the customs and Excise notifications every year |
| 10 | Interest rate Subvention | To Make money available at concessional rate | Schemes run by Commercial Banks under the parameters provided by the RBI |
| 11 | Special Schemes for | ||
| 12 | Special schemes for Infrastructural development or Technological upgradation | Schemes available to special sectors and implemented by concerned administrative ministries |
