India announces new Foreign Trade Policy
1 April, 2015
With the aim of doubling India’s
export of merchandise and services by the year 2020, the Indian Commerce and
Industry Ministry has today (1-4-2015) announced the new Foreign Trade Policy
to the FTP statement, the Policy seeks to accelerate exports through various
schemes intended to exempt and remit indirect taxes on inputs physically
incorporated in the export product, import capital goods at concessional duty,
stimulate services exports and focus on specific markets and products. It is
however stated that in future, India’s export promotion efforts have to move
away from incentives and subsidies alone in order to comply with the WTO’s
Agreement on Subsidies and the Countervailing Measures.
new FTP announces two new export promotion schemes for exports made on or after
1-4-2015 – one for promotion of export of goods and another for promotion of
export of services. 5 different schemes for promotion of export of goods
namely, Focus Product Scheme, Market Linked Focus Product Scheme, Focus Market
Scheme, Agri. Infrastructure Incentive Scrip and Vishesh Krishi Gram Udyog
Yojana (VKGUY), have been merged into one scheme called Merchandise Exports
from India Scheme (MEIS). Similarly, Served From India Scheme (SFIS) has also
been replaced with the new Service Exports from India Scheme (SEIS).
the duty credit scrips and goods imported / domestically procured against them
shall be freely transferable, and can be used for payment of Customs duty,
Central Excise duty or Service tax on procurement of goods or services.
Notifications allowing such exemptions in this regard from the Ministry of
Finance are however awaited.
benefit under MEIS shall be payable as percentage of realized FOB value, the
new FTP also states that debits towards Basic Customs Duty in the scrips would
also be allowed adjustment as duty drawback. In respect of services export, the
new FTP mentions that the benefit of the new scheme would be available to
service providers located in India. It may be noted that the old Policy used
the words “Indian Service Providers” which were however read down by the Delhi
High Court recently to grant benefit to even Indian subsidies of foreign
new Foreign Trade Policy also announces host of trade facilitation and ease of
doing business measures like online filing of documents, online
inter-ministerial consultations, simplification of various procedures,
digitization, etc. Export Oriented Units (EOUs) have also been given few
incentives to boost exports.