Govt sets out to promote high technology exports

ANNUAL SUPPLEMENT TO FOREIGN TRADE POLICY 2004-09

The government today introduced the Hi-Tech Products Export Promotion Scheme. However, the list of the products that will benefit from the scheme is yet to be announced.

Besides, exporters/associations would be entitled to use Market Access Initiatives (MAI) & Market Development Assistance (MDA) schemes to promote electronics and IT hardware exports.

Hi-tech electronics and IT hardware products would also be considered for inclusion in the High-Tech Products Export Promotion Scheme.

From April 1 this year, units undertaking to export their entire production of goods and services "" except permissible sales in the domestic tariff area (DTA) "" have been allowed to be set up under the Export-Oriented Unit (EoU) scheme, the Electronic Hardware Technology Park (EHTP) Scheme, the Software Technology Park (STP) Scheme or the Bio-Technology Park (BTP) Scheme for manufacturing goods, including repair, re-making, reconditioning, re-engineering and rendering of services.

Trading units are not covered under these schemes. Such units have also been allowed to procure from the DTA certain specified goods to create a central facility without paying any duty.

Software EoU/DTA units can now use these facilities for software exports. For services, including software units, sales in the DTA in any mode, including online data communication, would be permissible up to 50 per cent of the freight-on-board (FOB) value of exports and/or 50 per cent of the foreign exchange earned in cases where payments are received in foreign exchange.

Moreover, exports of notified high-technology products in free foreign exchange to all countries shall be entitled to a duty credit scrip equivalent to 1.25 per cent of the FOB value of exports or 5 per cent of incremental growth in the FOB value of the exports for the current year over the previous year.

The duty credit scrip shall not exceed Rs 15 crore for an exporter for all shipments done in a licensing year put together for which the benefit is being claimed under this scheme.