Foreign Trade Policy 2015-2020 – Salient features

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Foreign Trade Policy 2015-2020 – Salient features

(New Provisions applicable with effect from 01.04.2015) 

1. Duty Scrip Reward Schemes viz. FPS, FMS, MLFPS, Agri. Infrastructure Incentive Scrip, VKGUY merged into one scheme – Merchandise Export from India Scheme (MEIS). Incremental Export Incentivisation Scheme withdrawn.

2. Served from India Scheme (SFIS) replaced by Service Exports from India Scheme (SEIS). Benefit reduced from 10% to 3%/5% of the ‘Net Foreign Exchange Earned’.

3. Duty credit scrips and the goods imported thereunder would be freely usable and transferrable. These can be utilized for payment of service tax, custom duty and excise duty.

4. MEIS benefits available for exports by SEZ units (excluding FTWZ).  However, SEIS benefits not available for exports by SEZ units.

5. Duty Drawback can be claimed even if BCD is paid through debit in duty credit scrip.

6. Cenvat credit would also be eligible for duties/ taxes paid through duty credit scrips.

7. Scrips/authorisations issued, imports/exports and applications filed prior to 1st April, 2015 to be governed by previous provisions.

Status Holders -Foreign Trade Policy 2015-2020 

 

1. Criteria of export performance for recognition as Status Holder changed from Rupees to USD earnings.

2. Nomenclature of Status Holders changed as given in table below:

Status Category (Earlier) Status Category (Now) Export Performance -FOB/FOR Value in US $ million during current & previous 2 years
Export House One Star Export House 3
Star Export House Two Star Export House 25
Trading House Three Star Export House 100
Star Trading House Four Star Export House 500
Premier Trading House Five Star Export House 2000

Self-Certification of Country of Origi-Foreign Trade Policy 2015-2020 

1. Facility to be given to Status Holder manufacturers to self-certify their manufactured goods as originating from India to qualify for preferential treatment under PTA, FTA, CECA and CEPA.

2. Status holders (to be recognized by DGFT) would be eligible.

3. Scheme to be effective only after:

    Amendments to agreements by the respective countries

    Appropriate notifications to be issued by the DGFT in this behalf

4. Status certificates issued under FTP 2009-2014 shall be valid at the most up to 30.6.2015. Therefore, Status holders to apply for and obtain Status certificates under new policy before 30.6.2015 in terms of new eligibility criteria.

Major Changes in Advance Authorisation & DFIA Scheme -Foreign Trade Policy 2015-2020 

 

1. Supplies to SEZ unit to be accounted for fulfillment of EO, provided payment is received from the Foreign Currency Account of such unit.

2. However, supplies to SEZ developer/co-developer to be counted even if realisation is in INR.

3. Imports against advance Authorization eligible for exemption from Transitional Product Specific Safeguard Duty.

4.  However, imports for supplies to EPCG Authorization Holders shall not be eligible for exemption from anti-dumping duty, safeguard duty and transitional product specific safeguard duty.

5. Pre-export Duty Free Import Authorisation (DFIA) Scheme withdrawn.

Major Changes in EPCG Scheme -Foreign Trade Policy 2015-2020 

1. Export Obligation under EPCG scheme in case of domestic procurement of capital goods reduced from 90% to 75% of normal export obligation to promote domestic industry;

2. EPCG Scheme – Certificate from Chartered Engineer confirming use of spares, tools, refractory and catalysts imported for final redemption, no longer required.

3. Post Export EPCG Scrips scheme continues. Scrips issued under this scheme can be utilised as scrips issued under Chapter 3.

4. EPCG benefit not available for technological upgradation of existing EPCG machinery

New initiatives for EOUs, EHTPs and STPs – Foreign Trade Policy 2015-2020 

 

1. EOUs, EHTPs and STPs can share infrastructural facilities among themselves.

2. Inter-unit transfer of goods and services allowed among EOUs, EHTPs, STPs and BTPs.

3. EOUs allowed to set up Warehouse near the port of Export.

4. STPs, EHTPs and Software EOUs can use all duty free equipment/ goods for training purposes.

5. EOU can supply spares/components upto 2% of value of manufactured articles to a buyer in domestic market for purpose of after-sale services.

6. Period of 5 years to achieve Positive NEE by EOUs can be extended by one year in case of adverse market conditions or genuine hardship;

7. Time period for validity of (LOP) Letter of Permission for EOUs/ EHTP/ STPI/ BTP units revised for faster implementation and monitoring of projects.

Other Major Changes – Foreign Trade Policy 2015-2020 

 

1. E-commerce exports – Goods such as, books/ periodicals, customized fashion garments, leather footwear, toys, handloom products and having FOB value upto Rs. 25,000/- per consignment (finalized through e-Commerce platform) eligible for FTP benefits

2. Validity of SCOMET export authorised increased from 12 months to 24 months

3. Name of supporting manufacturer tied to a merchant exporter must appear in the export documents

4. Name of manufacturing exporter/manufacturer and third party exporter must be indicated in export documents in case of third party exports

5. Powers conferred on Regional Authorities for recovery of payment along with 15% interest in cases where erroneous/in-eligible benefits made/claimed. This would be in addition to penal action under Foreign Trade (Development & Regulation) Act.

ACTION POINT

All importers and exporters to review their import & export pattern (along with benefits & restrictions, if any) in the light of newly announced policy applicable w.e.f. 1.4.2015.

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