Annual growth target of 16% surpassed

FOREIGN TRADE POLICY/ NUTS & BOLTS

To achieve the objective of doubling India's share of global merchandise trade within five years, an average annual growth rate of about 16 per cent was envisaged in the Foreign Trade Policy 2004-09. In the very first year of the policy period, merchandise trade grew 24 per cent.

Interstate trade council

The council will be set up to facilitate co-ordination between states and the Centre on policy issues. It is aimed at providing an appropriate institutionalised dialogue mechanism to create an enabling environment for boosting international trade.

Removal of export cess

The department of commerce proposes to abolish cess on export of all agriculture and plantation commodities levied under various Commodity Board Acts. Cess levied under the Acts is a tax on exports, which is a handicap and a major irritant to exporters, and erodes the competitiveness of agriculture exports.

EPCG scheme relaxed

Companies fulfilling 75 per cent or more export obligation in half their original time are to be freed from balance export obligation. Concessional duty benefits to be extended to imported goods required by retailers. Reduced export obligations for the agriculture and the SSI sector.

Minor ports, ICDs and ICFs to be allowed to use rupee payment for port handling against discharge of export obligation.

For machinery imported under EPCG scheme, units not registered with central excise will not have to submit the installation certificate.

Firms importing spares under EPCG shall also be required to submit only a chartered engineer certificate instead of a certificate from central excise authorities.

The facility of clubbing of EPCG licences has been further liberalised. All EPCG licences issued under the same Customs notification can be clubbed. This will considerably reduce paperwork both for the exporter and the licensing authorities and lead to easier monitoring.

Marine sector package

Import of special flavouring agents and ingredients for seafood processing allowed with a duty concession up to 1 per cent of the FoB value of exports.

The self-removal procedure for clearing waste of perishable commodities to be put in place. Concessional import of mono-filament long-line system for tuna fishing to be allowed.

Agriculture exports

Poultry and dairy products to be included under Vishesh Krishi Upaj Yojana with a duty credit rate of 5 per cent of the FoB value of exports. Trademark for handlooms to be developed on the lines of 'Woolmark'

Quality norms specified for tea

To retain the brand equity of Indian teas, the Government has issued a new tea (distribution and export) control order, 2005 which prescribes strict norms for tea. All teas, whether imported or exported, will be required to conform to the specifications cited in the new order.

For the purpose of issuing non-preferential certificate of origin, tea will be classified according to how a particular type of tea is obtained -- whether wholly-obtained in India. Indian tea content is at least 90 per cent by weight. If tea does not belong to any of the two categories, it will be classified as 'blended tea of different origin and packed in India'.

A minimum value-addition norm of 50 per cent on all imported tea and stipulating 6 months' time-limit from the date of importing for export of tea are to be put in place.

Advance licensing scheme rationalised

Three categories of advanced licences merged into one. Clubbing of advance licences for export regularisation allowed.

Scope expanded to all exporters having past export performance than just status holders.Import of duty free material from one unit of a company to another simplified.

Units registered under BIFR shall be allowed export obligation extension as per the rehabilitation package or a period up to five years from the date of issuance of the advance licence, whichever is higher.

If a bank guarantee has been redeemed under the advance licence, the licensee may be allowed to get duty-free inputs processed from any manufacturer under actual user condition.

Removal of requirement of ARO for taking supplies from EOU/EHTP/STP/BTP units and allowing direct debit of the advance licence by the bond officer of these units envisaged. A detailed procedure in this regard shall be prescribed by the CBEC.

Duty-free replenishment certificate

The list of sensitive items restricted for import under DFRC pruned to 9 items. Brass scrap, additives, paper board and dye stuffs shall be removed from the list. While allowing re-credit on account of rejection of items imported under DFRC, 95 per cent of the value of the DFRC shall be credited. The re-credit facility will be similar to that available under DEPB and advance licence.

DEPB

DEPB benefits made available for supply of goods from DTA to SEZs for the period April 2003 to 11 May 2004.

Procedural simplification

Single application form called Aayat Niryaat forms introduced, reducing the size of the form by more than 60 per cent to around 50 pages.

DGFT to move towards more automated electronic environment for filing, retrieval and authentication of documents.EDI linkage of all community trade partners like DGFT, Customs, banks, export promotion councils for the purpose.

Fast track mechanism for clearances, examination, testing, quarantine, packaging to be set up by all agencies to facilitate trade of perishable cargo.

Laying down time limits for approving different import and export activities by various agencies to ensure a transparent system of working.

Service exports

Goods imported under the 'served from India' scheme shall be transferable within group companies and managed hotels. This will help in bulk-sourcing and better utilisation of entitlement.

Hotels and restaurants can avail of benefits under the 'scheme by submitting a declaration that duty benefits will be passed on to consumers. No chartered accountant certificate needed.

Gems and jewellery exports

Entitlement for duty-free imports of gems and jewellery samples have been enhanced to Rs. 3 lakh in a financial year or a fourth of the average of the last three years' exports turnover.

Supply of gold of 0.995 and above purity shall also be allowed for release by nominated agencies for export purposes.

Notional rate for fixing the dollar rate to calculate gold jewellery exports to be based on a certificate not older than 7 working days from the date of shipping, instead of earlier 3 days.

Package for EOUs

De-bonding norms for EOUs to be simplified. The system will move to self-assessment of liability and permission is proposed to be given within a week.

EOUs can claim IT exemption within a year from the date of exports.Allowing duty-free spares up to 5 per cent of the value of capital goods imported for excavation purposes in the granite sector to be removed to the quarries.

Capital goods will be allowed to be transferred or loaned out to other units under intimation to both excise and development commissioner. Transfer of samples to other EOUs on returnable basis within a period of 30 days to be allowed.

Backward States Grant Commission

A Backward States Grant Commission to be used for creating productive assets in such states. It also envisages that all non-statutory resource transfers from the Central government will be weighed in favour of poor and backward states, but with performance parameters as well.

Funds for backward states

The Backward States Grant Fund will have a corpus of Rs 25,000 crore to be provided over a period of five years. While the existing Backward Districts Initiative Scheme with an annual outlay of about Rs 1,800 crore will be merged into this fund, the balof about Rs 1,800 crore will be merged into this fund, the balance amount required for the annual contribution of Rs 5,000 crore will be earmarked from out of the total Central support to the Plan. It is expected that this will enable taking up social and physical infrastructure programmes in the poorest and most backward districts in the country within a given time frame. The Fund will become operational from the financial year 2005-06. The government has setting up of 1138 WORDS