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Highlights of Foreign Trade Policy 2009-14

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Higher Support for Market and Product Diversification

1. Incentive schemes under Chapter 3 have been expanded by way of addition of new products and markets.

2. 26 new markets have been added under Focus Market Scheme (FMS).

3. Incentive available under FMS raised from 2.5% to 3%.

4. Incentive available under Focus Product Scheme (FPS) raised from 1.25% to 2%.

5. Widens scope for products to be included for benefits under FPS. Additional engineering products, plastic and some electronics get a look in.

6. Market Linked Focus Product Scheme (MLFPS) expanded by inclusion of products like pharmaceuticals, textile fabrics, rubber products, glass products,auto components, motor cars, bicycle and its parts.etc. Benefits to these products will be provided, if exports are made to 13 identified markets (Algeria, Egypt, Kenya, Nigeria,South Africa, Tanzania, Brazil, Mexico, Ukraine, Vietnam, Cambodia, Australia and New Zealand).

7. Common simplified application form introduced for taking benefits under FPS, FMS, MLFPS and VKGUY.

9. Higher allocation for Market Development Assistance (MDA) and Market Access Initiative (MAI)

10. To aid technological upgradation of export sector, EPCG Scheme at Zero Duty has been introduced.

11. Jaipur, Srinagar and Anantnag have been recognised as‘Towns of Export Excellence’ for handicrafts; Kanpur, Dewas and Ambur for leather products; and Malihabad for horticultural products.

12. Export obligation on import of spares, moulds etc. under EPCG Scheme has been reduced by 50%.

13. Taking into account the decline in exports, the facility of Re-fixation of Annual Average Export Obligation for a particular financial year in which there is decline in exports from the country, has been extended for the 5 year Policy period 2009-14. Support for Green products and products from North East

14. Focus Product Scheme benefit extended for export of ‘green products’and some products from the North East.

Status Holders

15. To accelerate exports and encourage technological upgradation, additional Duty Credit Scrips shall be given to Status Holders @ 1% of the FOB value of past exports. The duty credit scrips can be used for procurement of capital goods with Actual User condition. This facility shall be available for sectors of leather (excluding finished leather), textiles and jute, handicrafts, engineering (excluding Iron & steel & non-ferrous metals in primary and intermediate form, automobiles & two wheelers, nuclear reactors & parts, and ships, boats and floating structures), plastics and basic chemicals (excluding pharma products) [subject to exclusions of current beneficiaries under Technological Upgradation Fund Schemes (TUFS)]. This facility shall be available upto 31 March, 2011.

16. Transferability for the Duty Credit scrips being issued to status holders under paragraph 3.8.6 of FTP under VKGUY Scheme permitted on condition that scrips would be utilized for the procurement of coldchain equipments only.

Stability/ continuity of the Foreign Trade Policy

17. To impart stability to the Policy regime, Duty Entitlement Passbook (DEPB) Scheme is extended beyond 31-12-2009 till 31.12.2010.

18. Interest subvention of 2% for pre-shipment credit for 7 specified sectors has been extended till 31.3.2010 in the Budget 2009-10.

19. Income Tax exemption to 100% EOUs and to STPI units under Section 10B and 10A of Income Tax Act, has been extended for the financial year 2010-11 in the Budget 2009-10.

20 The adjustment assistance scheme initiated in December, 2008 to provide enhanced ECGC cover at 95%, to the adversely affected sectors, is continued till March, 2010.

Marine sector

21. Fisheries have been included in the sectors which are exempted from maintenance of average EO under EPCG Scheme, subject to the condition that Fishing Trawlers, boats, ships and other similar items shall not be allowed
to be imported under this provision. This would provide a fillip to the marine sector which has been affected by the present downturn in exports.

22. Additional flexibility under Target Plus Scheme (TPS) / Duty Free Certificate of Entitlement (DFCE) Scheme for Status Holders has been given to Marine sector.

Gems & Jewellery Sector

23. To neutralize duty incidence on gold Jewellery exports, it has now been decided to allow Duty Drawback on such exports.

24. In an endeavour to make India a diamond international trading hub, it is planned to establish “Diamond Bourse(s)

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