HIGHLIGHTS OF THE FOREIGN
TRADE POLICY 2015-2020
Government of India
Department of Commerce
Ministry of Commerce and Industry
1
HIGHLIGHTS OF THE FOREIGN
TRADE POLICY 2015-2020
A. SIMPLIFICATION & MERGER OF REWARD
SCHEMES
Export from India Schemes:
1. Merchandise Exports from India Scheme
(MEIS)
(a) Earlier there were 5 different schemes (Focus
Product Scheme, Market Linked Focus
Product Scheme, Focus Market Scheme, Agri.
Infrastructure Incentive Scrip, VKGUY) for
rewarding merchandise exports with
different kinds of duty scrips with varying
conditions (sector specific or actual user
only) attached to their use. Now all these
schemes have been merged into a single
scheme, namely Merchandise Export from
India Scheme (MEIS) and there would be no
conditionality attached to the scrips issued
under the scheme. The main features of MEIS,
including details of various groups of
products supported under MEIS and the
country groupings are at Annexure-1.
(b) Rewards for export of notified goods to
notified markets under ‘Merchandise Exports
2
from India Scheme (MEIS) shall be payable as
percentage of realized FOB value (in free
foreign exchange). The debits towards basic
customs duty in the transferable reward duty
credit scrips would also be allowed
adjustment as duty drawback. At present,
only the additional duty of customs / excise
duty / service tax is allowed adjustment as
CENVAT credit or drawback, as per
Department of Revenue rules.
2. Service Exports from India Scheme (SEIS)
(a) Served From India Scheme (SFIS) has been
replaced with Service Exports from India
Scheme (SEIS). SEIS shall apply to ‘Service
Providers located in India’ instead of ‘Indian
Service Providers’. Thus SEIS provides for
rewards to all Service providers of notified
services, who are providing services from
India, regardless of the constitution or profile
of the service provider. The list of services
and the rates of rewards under SEIS are at
Annexure-2.
(b) The rate of reward under SEIS would be
based on net foreign exchange earned. The
reward issued as duty credit scrip, would no
longer be with actual user condition and will
no longer be restricted to usage for specified
types of goods but be freely transferable and
usable for all types of goods and service tax
3
debits on procurement of services / goods.
Debits would be eligible for CENVAT credit or
drawback.
3. Chapter -3 Incentives (MEIS & SEIS) to be
available for SEZs
It is now proposed to extend Chapter -3
Incentives (MEIS & SEIS) to units located in
SEZs also.
4. Duty credit scrips to be freely transferable
and usable for payment of custom duty,
excise duty and service tax.
(a) All scrips issued under MEIS and SEIS and the
goods imported against these scrips would be
fully transferable.
(b) Scrips issued under Exports from India
Schemes can be used for the following:-
(i) Payment of customs duty for import of
inputs / goods including capital goods,
except items listed in Appendix 3A.
(ii) Payment of excise duty on domestic
procurement of inputs or goods,
including capital goods as per DoR
notification.
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(iii) Payment of service tax on
procurement of services as per DoR
notification.
(c) Basic Customs Duty paid in cash or through
debit under Duty Credit Scrip can be taken
back as Duty Drawback as per DoR Rules, if
inputs so imported are used for exports.
5. Status Holders
(a) Business leaders who have excelled in
international trade and have
successfully contributed to country’s foreign
trade are proposed to be recognized as
Status Holders and given special treatment
and privileges to facilitate their trade
transactions, in order to reduce their
transaction costs and time.
(b) The nomenclature of Export House, Star
Export House, Trading House, Star Trading
House, Premier Trading House certificate has
been changed to One, Two, Three, Four, Five
Star Export House.
(c) The criteria for export performance for
recognition of status holder have been
changed from Rupees to US dollar earnings.
The new criteria is as under:-
5
Status category
Export
Performance
FOB / FOR (as
converted)
Value (in US $
million) during
current and
previous two
years
One Star Export House 3
Two Star Export House 25
Three Star Export
House
100
Four Star Export House 500
Five Star Export House 2000
(d) Approved Exporter Scheme - Self
certification by Status Holders
Manufacturers who are also Status Holders
will be enabled to self-certify their
manufactured goods as originating from
India with a view to qualify for preferential
treatment under different Preferential
Trading Agreements [PTAs], Free Trade
Agreements [FTAs], Comprehensive
Economic Cooperation Agreements [CECAs]
and Comprehensive Economic
Partnerships Agreements [CEPAs] which are
in operation. They shall be permitted to
self-certify the goods as manufactured as per
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their Industrial Entrepreneur
Memorandum (IEM) / Industrial Licence
(IL)/ Letter of Intent (LOI).
B. BOOST TO "MAKE IN INDIA"
6. Reduced Export Obligation (EO) for domestic
procurement under EPCG scheme:
Specific Export Obligation under EPCG
scheme, in case capital goods are procured
from indigenous manufacturers, which is
currently 90% of the normal export
obligation (6 times at the duty saved amount)
has been reduced to 75%, in order to
promote domestic capital goods
manufacturing industry.
7. Higher level of rewards under MEIS for
export items with high domestic content and
value addition.
It is proposed to give higher level of rewards
to products with high domestic content and
value addition, as compared to products with
high import content and less value addition.
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C. TRADE FACILITATION & EASE OF DOING
BUSINESS
8. Online filing of documents/ applications
and Paperless trade in 24x7 environment:
(a) DGFT already provides facility of Online filing
of various applications under FTP by the
exporters/importers. However, certain
documents like Certificates issued by
Chartered Accountants/ Company Secretary
/ Cost Accountant etc. have to be filed in
physical forms only. In order to move further
towards paperless processing of reward
schemes, it has been decided to develop an
online procedure to upload digitally signed
documents by Chartered Accountant /
Company Secretary / Cost Accountant. In the
new system, it will be possible to upload
online documents like annexure attached to
ANF 3B, ANF 3C and ANF 3D, which are at
present signed by these signatories and
submitted physically.
(b) Henceforth, hardcopies of applications and
specified documents would not be required
to be submitted to RA, saving paper as well as
cost and time for the exporters. To start with,
applications under Chapter 3 & 4 of FTP are
being covered (which account for nearly 70%
of total applications in DGFT). Applications
8
under Chapter-5 would be taken up in the
next phase.
(c) As a measure of ease of doing business,
landing documents of export consignment as
proofs for notified market can be digitally
uploaded in the following manner:-
(i) Any exporter may upload the scanned
copy of Bill of Entry under his digital
signature.
(ii) Status holders falling in the category
of Three Star, Four Star or Five Star
Export House may upload scanned
copies of documents.
9. Online inter-ministerial consultations:
It is proposed to have Online inter-ministerial
consultations for approval of export of
SCOMET items, Norms fixation, Import
Authorisations, Export Authorisation, in a
phased manner, with the objective to reduce
time for approval. As a result, there would
not be any need to submit hard copies of
documents for these purposes by the
exporters.
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10. Simplification of procedures/processes,
digitisation and e-governance
(a) Under EPCG scheme, obtaining and
submitting a certificate from an independent
Chartered Engineer, confirming the use of
spares, tools, refractory and
catalysts imported for final redemption of
EPCG authorizations has been dispensed
with.
(b) At present, the EPCG Authorisation holders
are required to maintain records for 3 years
after redemption of Authorisations. Now the
EPCG Authorization Holders shall be required
to maintain records for a period of two years
only. Government’s endeavour is to gradually
phase out this requirement as the relevant
records such as Shipping Bills, e-BRC are
likely to be available in electronic mode
which can be archived and retrieved
whenever required.
(c) Exporter Importer Profile: Facility has been
created to upload documents in
Exporter/Importer Profile. There will be no
need to submit copies of permanent records/
documents (e.g. IEC, Manufacturing licence,
RCMC, PAN etc.) repeatedly with each
application, once uploaded.
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(d) Communication with Exporters/Importers:
Certain information, like mobile number,
e-mail address etc. has been added as
mandatory fields, in IEC data base. This
information once provided by exporters,
would help in better communication with
exporters. SMS/ email would be sent to
exporters to inform them about issuance of
authorisations or status of their
applications.
(e) Online message exchange with CBDT and
MCA: It has been decided to have on line
message exchange with CBDT for PAN
data and with Ministry of Corporate
Affairs for CIN and DIN data. This integration
would obviate the need for seeking
information from IEC holders for subsequent
amendments/ updation of data in IEC data
base.
(e) Communication with Committees of DGFT:
For faster and paperless communication with
various committees of DGFT, dedicated email
addresses have been provided to each
Norms Committee, Import Committee and
Pre-Shipment Inspection Agency for faster
communication.
(f) Online applications for refunds: Online filing
of application for refund of TED is being
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introduced for which a new ANF has been
created.
11. Forthcoming e-Governance Initiatives
(a) DGFT is currently working on the following
EDI initiatives:
(i) Message exchange for transmission of
export reward scrips from DGFT to
Customs.
(ii) Message exchange for transmission of
Bills of Entry (import details) from
Customs to DGFT.
(iii) Online issuance of Export Obligation
Discharge Certificate (EODC).
(iv) Message exchange with Ministry of
Corporate Affairs for CIN & DIN.
(v) Message exchange with CBDT for PAN.
(vi) Facility to pay application fee using
debit card / credit card.
(vii) Open API for submission of IEC
application.
(viii) Mobile applications for FTP
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D. Other new Initiatives
12. New initiatives for EOUs, EHTPs and STPs
(a) EOUs, EHTPs, STPs have been allowed to
share infrastructural facilities among
themselves. This will enable units to utilize
their infrastructural facilities in an optimum
way and avoid duplication of efforts and cost
to create separate infrastructural facilities in
different units.
(b) Inter unit transfer of goods and services have
been allowed among EOUs, EHTPs, STPs, and
BTPs. This will facilitate group of those units
which source inputs centrally in order to
obtain bulk discount. This will reduce cost
of transportation, other logistic costs and
result in maintaining effective supply chain.
(c) EOUs have been allowed facility to set up
Warehouses near the port of export. This will
help in reducing lead time for delivery of
goods and will also address the issue of unpredictability
of supply orders.
(d) STP units, EHTP units, software EOUs have
been allowed the facility to use all duty free
equipment/goods for training purposes. This
will help these units in developing skills of
their employees.
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(e) 100% EOU units have been allowed facility of
supply of spares/ components up to 2% of
the value of the manufactured articles to a
buyer in domestic market for the purpose of
after sale services.
(f) At present, in a period of 5 years EOU units
have to achieve Positive Net Foreign
Exchange Earning (NEE) cumulatively.
Because of adverse market condition or any
ground of genuine hardship, then such period
of 5 years for NFE completion can be
extended by one year.
(f) Time period for validity of Letter of
Permission (LOP) for EOUs/EHTP/ STPI/BTP
Units has been revised for faster
implementation and monitoring of projects.
Now, LOP will have an initial validity of 2
years to enable the unit to construct the
plant and install the machinery. Further
extension can be granted by the Development
Commissioner up to one year. Extension
beyond 3 years of the validity of LOP, can be
granted, in case unit has completed 2/3rd of
activities, including the construction
activities.
(g) At present, EOUs/EHTP/STPI units are
permitted to transfer capital goods to
other EOUs, EHTPs, STPs, SEZ units. Now a
facility has been provided that if such
14
transferred capital goods are rejected by the
recipient, then the same can be returned to
the supplying unit, without payment of duty.
(h) A simplified procedure will be provided to
fast track the de-bonding / exit of the STP/
EHTP units. This will save time for these
units and help in reduction of transaction
cost.
(i) EOUs having physical export turnover of
Rs.10 crore and above, have been allowed
the facility of fast track clearances of import
and domestic procurement. They will be
allowed fast tract clearances of goods, for
export production, on the basis of preauthenticated
procurement certificate,
issued by customs / central excise
authorities. They will not have to seek
procurement permission for every import
consignment.
13. Facilitating & Encouraging Export of dual
use items (SCOMET).
(a) Validity of SCOMET export authorisation has
been extended from the present 12
months to 24 months. It will help industry to
plan their activity in an orderly manner and
obviate the need to seek revalidation or
relaxation from DGFT.
15
(b) Authorisation for repeat orders will be
considered on automatic basis subject to
certain conditions.
(c) Verification of End User Certificate (EUC) is
being simplified if SCOMET item is being
exported under Defence Export Offset Policy.
(c) Outreach programmes will be conducted at
different locations to raise awareness among
various stakeholders.
14 Facilitating & Encouraging Export of
Defence Exports
(a) Normal export obligation period under
advance authorization is 18 months.
Export obligation period for export items
falling in the category of defence, military
store, aerospace and nuclear energy shall be
24 months from the date of issue of
authorization or co-terminus with contracted
duration of the export order, whichever
is later. This provision will help export of
defence items and other high
technology items.
(b) A list of military stores requiring NOC of
Department of Defence Production has
been notified by DGFT recently. A committee
has been formed to create ITC (HS) codes
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for defence and security items for which
industrial licenses are issued by DIPP.
15. e-Commerce Exports
(a) Goods falling in the category of handloom
products, books / periodicals, leather
footwear, toys and customized fashion
garments, having FOB value up to Rs.25000
per consignment (finalized using eCommerce
platform) shall be eligible for
benefits under FTP. Such goods can be
exported in manual mode through Foreign
Post Offices at New Delhi, Mumbai and
Chennai.
(b) Export of such goods under Courier
Regulations shall be allowed manually on
pilot basis through Airports at Delhi, Mumbai
and Chennai as per appropriate
amendments in regulations to be made by
Department of Revenue. Department of
Revenue shall fast track the implementation
of EDI mode at courier terminals.
16. Duty Exemption
(a) Imports against Advance Authorization shall
also be eligible for exemption from
Transitional Product Specific Safeguard Duty.
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(b) In order to encourage manufacturing of
capital goods in India, import under EPCG
Authorisation Scheme shall not be eligible for
exemption from payment of anti-dumping
duty, safeguard duty and transitional product
specific safeguard duty.
17. Additional Ports allowed for Export and
import
Calicut Airport, Kerala and Arakonam ICD,
Tamil Nadu have been notified as registered
ports for import and export.
18. Duty Free Tariff Preference (DFTP)
Scheme
India has already extended duty free tariff
preference to 33 Least Developed Countries
(LDCs) across the globe. This is being
notified under FTP.
19. Quality complaints and Trade Disputes
(a) In an endeavour to resolve quality
complaints and trade disputes, between
exporters and importers, a new chapter,
namely, Chapter on Quality Complaints and
Trade Disputes has been incorporated in the
Foreign Trade Policy.
(b) For resolving such disputes at a faster pace, a
Committee on Quality Complaints and
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Trade Disputes (CQCTD) is being constituted
in 22 offices and would have members from
EPCs/FIEOs/APEDA/EICs.
20. Vishakhapatnam and Bhimavaram added
as Towns of Export Excellence
Government has already recognized 33
towns as export excellence towns. It has
been decided to add Vishakhapatnam and
Bhimavaram in Andhra Pradesh as towns of
export excellence (Product Category–
Seafood)
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Annexure-1
I. Merchandise Exports from India Scheme
(i) Merchandise Exports from India Scheme has
replaced 5 different schemes of earlier FTP
(Focus Product Scheme, Market Linked Focus
Product Scheme, Focus Market Scheme, Agri.
Infrastructure Incentive Scrip, VKGUY) for
rewarding merchandise exports which had
varying conditions (sector specific or actual
user only) attached to their use.
(ii) Now all these schemes have been merged
into a single scheme, namely Merchandise
Export from India Scheme (MEIS) and there
would be no conditionality attached to the
scrips issued under the scheme. Notified
goods exported to notified markets would be
rewarded on realised FOB value of exports.
A. Country Groups:
Category A: Traditional Markets (30) -
European Union (28), USA, Canada.
Category B: Emerging & Focus Markets
(139), Africa (55), Latin America and Mexico
(45), CIS countries (12), Turkey and West
Asian countries (13), ASEAN countries (10),
Japan, South Korea, China, Taiwan,
Category C: Other Markets (70).
20
B. Products supported under MEIS
Level of Support:
Higher rewards have been granted for the
following category of products:
Agricultural and Village industry products,
presently covered under VKGUY.
Value added and packaged products.
Eco-friendly and green products that create
wealth out of waste from agricultural and
other waste products that generate
additional income for the farmers, while
improving the environment.
Labour intensive Products with large
employment potential and Products with
large number of producers and /or
exporters.
Industrial Products from potential winning
sectors.
Hi-tech products with high export earning
potential.
C. Markets Supported
Most Agricultural products supported
across the Globe.
Industrial and other products supported in
Traditional and/or Emerging markets only.
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D. High potential products not supported
earlier:
Support to 852 Tariff lines that fit in the
product criteria but not provided support in
the earlier FTP. Includes lines from Fruits,
Vegetables, Dairy products, Oils meals,
Ayush & Herbal Products, Paper, Paper
Board Products.
E. Global support has been granted to the
following category:
Fruits, Flowers, vegetables
Tea Coffee, Spices
Cereals preparation, shellac, Essential oils
Processed foods,
Eco Friendly products that add value to
waste
Marine Products
Handloom, Coir, Jute, products and
Technical Textiles, Carpets Handmade.
Other Textile and Readymade garments
have been supported for European Union,
USA, Canada and Japan.
Handicraft, Sports Goods
Furniture, wood articles
F. Support to major markets have been given
to the following product categories
Pharmaceuticals, Herbals, Surgicals
22
Industrial Machinery, IC Engine, Machine
tools, Parts, Auto Components/Parts
Hand Tools, Pumps of All Types
Automobiles, Two wheelers, Bicycles, Ships,
Planes
Chemicals, Plastics
Rubber, Ceramic and Glass
Leather garments, saddlery items, footwear
Steel furniture, Prefabs, Lighters
Wood , Paper, Stationary
iron, steel, and base metals, products
G. Other sectors supported under MEIS
352 Defence related Product with export of
US$ 17.7B consisting of Core Products (20),
Dual Use products (60) ,General Purpose
products (272).
283 Pharmaceutical products of Bulk Drugs
& Drug Intermediates, Drug Formulations
Biologicals, Herbal, Surgicals, and Vaccines.
96 lines of Environment related Goods,
Machinery, Equipment’s.
49 lines where mandatory BIS standards are
prescribed.
7 lines of Technical Textiles.
H. Participation in global value chain of the
items falling under the scheme:
1725 lines of Intermediate Goods - These
goods become inputs in the manufacturing
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of other countries and will strengthen
backward manufacturing linkages which is
vital for India’s participation in Global Value
Chains.
1109 lines of Capital Goods sector- will also
strengthen Manufacturing Base in India.
1730 lines of Consumer Goods sector- We
hope a quantum jump in export from this
sector with strengthening of Make in India
Brand in near future.
I. Technology based analysis:
572 lines-Low skill Technology-intensive
manufacturing.
1010 lines-Medium skill Technologyintensive
manufacturing.
1309 lines-High Skill Technology-intensive
manufacturing.
J. Women Centric Products supported under
MEIS
(a) Women workers constitute 52% of
plantation workers-203 lines of Tea Coffee,
Spices, Cashew.
(b) 69% of the aggregate female employment is
concentrated in the following sectors:
(i) Manufacture of other food products -
Jelly Confectionery, tomato ketchup,
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cooked stuffed pasta, pawa, mudi and
the like, gingerbread , papad, pastries
and cakes.
(ii) Manufacture of wearing apparel-396
lines of Readymade Garments
(c) Sectors that have a significant proportion of
female employment (more than 25%):
(i) Agricultural and animal husbandry
service activities, except veterinary
activities– 263 lines of basic
Agriculture products.
(ii) Manufacture of footwear – 28
Footwear and Leather products.
(iii) Consumer Electronics and Electronic
Components, watches and clocks -483
lines.
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Annexure-2
II. Services Exports from India Scheme
(i) Served from India Scheme (SFIS) has been
replaced with Service Exports from India
Scheme (SEIS). SEIS shall apply to `Service
Providers’ located in India’ instead of `Indian
Service Providers’. Thus SEIS provides for
rewards to all Service providers of notified
services, who are providing services from
India, regardless of the constitution or profile
of the service provider.
(ii) The rate of reward under SEIS would be
based on net foreign exchange earned. The
reward issued as duty credit scrip, would no
longer be with actual user condition and will
no longer be restricted to usage for specified
types of goods but be freely transferable and
usable for all types of goods and service tax
debits on procurement of services/goods.
Debits would be eligible for CENVAT credit or
drawback.
(iii) The present rates of reward are 3% and 5%.
The list of services and the rates of rewards
would be reviewed after 30.9.2015.
26
Sl
No SECTORS
Admis
sible
rate
1 BUSINESS SERVICES
A
Professional services
Legal services, Accounting, auditing
and bookkeeping services, Taxation
services, Architectural services ,
Engineering services, Integrated
engineering services, Urban planning
and landscape architectural services,
Medical and dental services,
Veterinary services, Services
provided by midwives, nurses,
physiotherapists and paramedical
personnel.
5%
B
Research and development services
R&D services on natural sciences,
R&D services on social sciences and
humanities, Interdisciplinary R&D
services
5%
C.
Rental/Leasing services without
operators
Relating to ships, Relating to aircraft,
Relating to other transport
equipment, Relating to other
machinery and equipment 5%
D
Other business services
Advertising services, Market research
and public opinion polling services
Management consulting service,
Services related to management
consulting, Technical testing and
analysis services, Services incidental
to agricultural, hunting and forestry,
Services incidental to fishing, Services
incidental to mining, Services 3%
27
incidental to manufacturing, Services
incidental to energy distribution,
Placement and supply services of
personnel, Investigation and security,
Related scientific and technical
consulting services, Maintenance and
repair of equipment (not including
maritime vessels, aircraft or other
transport equipment), Buildingcleaning
services, Photographic
services, Packaging services, Printing,
publishing and Convention services
2
COMMUNICATION SERVICES
Audiovisual services
Motion picture and video tape
production and distribution service,
Motion picture projection service,
Radio and television services, Radio
and television transmission services,
Sound recording 5%
3
CONSTRUCTION AND RELATED
ENGINEERING SERVICES
General Construction work for
building, General Construction work
for Civil Engineering, Installation and
assembly work , Building completion
and finishing work 5%
4
EDUCATIONAL SERVICES (Please
refer Note 1)
Primary education services,
Secondary education services, Higher
education services, Adult education 5%
5
ENVIRONMENTAL SERVICES
Sewage services, Refuse disposal
services, Sanitation and similar
services 5%
28
6
HEALTH-RELATED AND SOCIAL
SERVICES
Hospital services 5%
7
TOURISM AND TRAVEL-RELATED
SERVICES
A. Hotels and Restaurants (including
catering)
a. Hotel 3%
b. Restaurants (including catering) 3%
B. Travel agencies and tour operators
services 5%
C. Tourist guides services 5%
8
RECREATIONAL, CULTURAL AND
SPORTING SERVICES (other than
audiovisual services)
Entertainment services (including
theatre, live bands and circus
services), News agency services,
Libraries, archives, museums and
other cultural services, Sporting and
other recreational services
5%
9
TRANSPORT SERVICES (Please
refer Note 2)
A.
Maritime Transport Services
Passenger transportation*, Freight
transportation* , Rental of vessels
with crew *, Maintenance and repair
of vessels, Pushing and towing
services, Supporting services for
maritime transport
5%
B.
Air transport services
Rental of aircraft with crew,
Maintenance and repair of aircraft,
Airport Operations and ground
handling
5%
29
C
Road Transport Services
Passenger transportation, Freight
transportation, Rental of Commercial
vehicles with operator, Maintenance
and repair of road transport
equipment, Supporting services for
road transport services
5%
D.
Services Auxiliary To All Modes Of
Transport.
Cargo-handling services, Storage and
warehouse services, Freight
transport agency services 5%
Note:
(1) Under education services, SEIS shall not be
available on Capitation fee.
(2) *Operations from India by Indian Flag
Carriers only is allowed under Maritime
transport services.
TRADE POLICY 2015-2020
Government of India
Department of Commerce
Ministry of Commerce and Industry
1
HIGHLIGHTS OF THE FOREIGN
TRADE POLICY 2015-2020
A. SIMPLIFICATION & MERGER OF REWARD
SCHEMES
Export from India Schemes:
1. Merchandise Exports from India Scheme
(MEIS)
(a) Earlier there were 5 different schemes (Focus
Product Scheme, Market Linked Focus
Product Scheme, Focus Market Scheme, Agri.
Infrastructure Incentive Scrip, VKGUY) for
rewarding merchandise exports with
different kinds of duty scrips with varying
conditions (sector specific or actual user
only) attached to their use. Now all these
schemes have been merged into a single
scheme, namely Merchandise Export from
India Scheme (MEIS) and there would be no
conditionality attached to the scrips issued
under the scheme. The main features of MEIS,
including details of various groups of
products supported under MEIS and the
country groupings are at Annexure-1.
(b) Rewards for export of notified goods to
notified markets under ‘Merchandise Exports
2
from India Scheme (MEIS) shall be payable as
percentage of realized FOB value (in free
foreign exchange). The debits towards basic
customs duty in the transferable reward duty
credit scrips would also be allowed
adjustment as duty drawback. At present,
only the additional duty of customs / excise
duty / service tax is allowed adjustment as
CENVAT credit or drawback, as per
Department of Revenue rules.
2. Service Exports from India Scheme (SEIS)
(a) Served From India Scheme (SFIS) has been
replaced with Service Exports from India
Scheme (SEIS). SEIS shall apply to ‘Service
Providers located in India’ instead of ‘Indian
Service Providers’. Thus SEIS provides for
rewards to all Service providers of notified
services, who are providing services from
India, regardless of the constitution or profile
of the service provider. The list of services
and the rates of rewards under SEIS are at
Annexure-2.
(b) The rate of reward under SEIS would be
based on net foreign exchange earned. The
reward issued as duty credit scrip, would no
longer be with actual user condition and will
no longer be restricted to usage for specified
types of goods but be freely transferable and
usable for all types of goods and service tax
3
debits on procurement of services / goods.
Debits would be eligible for CENVAT credit or
drawback.
3. Chapter -3 Incentives (MEIS & SEIS) to be
available for SEZs
It is now proposed to extend Chapter -3
Incentives (MEIS & SEIS) to units located in
SEZs also.
4. Duty credit scrips to be freely transferable
and usable for payment of custom duty,
excise duty and service tax.
(a) All scrips issued under MEIS and SEIS and the
goods imported against these scrips would be
fully transferable.
(b) Scrips issued under Exports from India
Schemes can be used for the following:-
(i) Payment of customs duty for import of
inputs / goods including capital goods,
except items listed in Appendix 3A.
(ii) Payment of excise duty on domestic
procurement of inputs or goods,
including capital goods as per DoR
notification.
4
(iii) Payment of service tax on
procurement of services as per DoR
notification.
(c) Basic Customs Duty paid in cash or through
debit under Duty Credit Scrip can be taken
back as Duty Drawback as per DoR Rules, if
inputs so imported are used for exports.
5. Status Holders
(a) Business leaders who have excelled in
international trade and have
successfully contributed to country’s foreign
trade are proposed to be recognized as
Status Holders and given special treatment
and privileges to facilitate their trade
transactions, in order to reduce their
transaction costs and time.
(b) The nomenclature of Export House, Star
Export House, Trading House, Star Trading
House, Premier Trading House certificate has
been changed to One, Two, Three, Four, Five
Star Export House.
(c) The criteria for export performance for
recognition of status holder have been
changed from Rupees to US dollar earnings.
The new criteria is as under:-
5
Status category
Export
Performance
FOB / FOR (as
converted)
Value (in US $
million) during
current and
previous two
years
One Star Export House 3
Two Star Export House 25
Three Star Export
House
100
Four Star Export House 500
Five Star Export House 2000
(d) Approved Exporter Scheme - Self
certification by Status Holders
Manufacturers who are also Status Holders
will be enabled to self-certify their
manufactured goods as originating from
India with a view to qualify for preferential
treatment under different Preferential
Trading Agreements [PTAs], Free Trade
Agreements [FTAs], Comprehensive
Economic Cooperation Agreements [CECAs]
and Comprehensive Economic
Partnerships Agreements [CEPAs] which are
in operation. They shall be permitted to
self-certify the goods as manufactured as per
6
their Industrial Entrepreneur
Memorandum (IEM) / Industrial Licence
(IL)/ Letter of Intent (LOI).
B. BOOST TO "MAKE IN INDIA"
6. Reduced Export Obligation (EO) for domestic
procurement under EPCG scheme:
Specific Export Obligation under EPCG
scheme, in case capital goods are procured
from indigenous manufacturers, which is
currently 90% of the normal export
obligation (6 times at the duty saved amount)
has been reduced to 75%, in order to
promote domestic capital goods
manufacturing industry.
7. Higher level of rewards under MEIS for
export items with high domestic content and
value addition.
It is proposed to give higher level of rewards
to products with high domestic content and
value addition, as compared to products with
high import content and less value addition.
7
C. TRADE FACILITATION & EASE OF DOING
BUSINESS
8. Online filing of documents/ applications
and Paperless trade in 24x7 environment:
(a) DGFT already provides facility of Online filing
of various applications under FTP by the
exporters/importers. However, certain
documents like Certificates issued by
Chartered Accountants/ Company Secretary
/ Cost Accountant etc. have to be filed in
physical forms only. In order to move further
towards paperless processing of reward
schemes, it has been decided to develop an
online procedure to upload digitally signed
documents by Chartered Accountant /
Company Secretary / Cost Accountant. In the
new system, it will be possible to upload
online documents like annexure attached to
ANF 3B, ANF 3C and ANF 3D, which are at
present signed by these signatories and
submitted physically.
(b) Henceforth, hardcopies of applications and
specified documents would not be required
to be submitted to RA, saving paper as well as
cost and time for the exporters. To start with,
applications under Chapter 3 & 4 of FTP are
being covered (which account for nearly 70%
of total applications in DGFT). Applications
8
under Chapter-5 would be taken up in the
next phase.
(c) As a measure of ease of doing business,
landing documents of export consignment as
proofs for notified market can be digitally
uploaded in the following manner:-
(i) Any exporter may upload the scanned
copy of Bill of Entry under his digital
signature.
(ii) Status holders falling in the category
of Three Star, Four Star or Five Star
Export House may upload scanned
copies of documents.
9. Online inter-ministerial consultations:
It is proposed to have Online inter-ministerial
consultations for approval of export of
SCOMET items, Norms fixation, Import
Authorisations, Export Authorisation, in a
phased manner, with the objective to reduce
time for approval. As a result, there would
not be any need to submit hard copies of
documents for these purposes by the
exporters.
9
10. Simplification of procedures/processes,
digitisation and e-governance
(a) Under EPCG scheme, obtaining and
submitting a certificate from an independent
Chartered Engineer, confirming the use of
spares, tools, refractory and
catalysts imported for final redemption of
EPCG authorizations has been dispensed
with.
(b) At present, the EPCG Authorisation holders
are required to maintain records for 3 years
after redemption of Authorisations. Now the
EPCG Authorization Holders shall be required
to maintain records for a period of two years
only. Government’s endeavour is to gradually
phase out this requirement as the relevant
records such as Shipping Bills, e-BRC are
likely to be available in electronic mode
which can be archived and retrieved
whenever required.
(c) Exporter Importer Profile: Facility has been
created to upload documents in
Exporter/Importer Profile. There will be no
need to submit copies of permanent records/
documents (e.g. IEC, Manufacturing licence,
RCMC, PAN etc.) repeatedly with each
application, once uploaded.
10
(d) Communication with Exporters/Importers:
Certain information, like mobile number,
e-mail address etc. has been added as
mandatory fields, in IEC data base. This
information once provided by exporters,
would help in better communication with
exporters. SMS/ email would be sent to
exporters to inform them about issuance of
authorisations or status of their
applications.
(e) Online message exchange with CBDT and
MCA: It has been decided to have on line
message exchange with CBDT for PAN
data and with Ministry of Corporate
Affairs for CIN and DIN data. This integration
would obviate the need for seeking
information from IEC holders for subsequent
amendments/ updation of data in IEC data
base.
(e) Communication with Committees of DGFT:
For faster and paperless communication with
various committees of DGFT, dedicated email
addresses have been provided to each
Norms Committee, Import Committee and
Pre-Shipment Inspection Agency for faster
communication.
(f) Online applications for refunds: Online filing
of application for refund of TED is being
11
introduced for which a new ANF has been
created.
11. Forthcoming e-Governance Initiatives
(a) DGFT is currently working on the following
EDI initiatives:
(i) Message exchange for transmission of
export reward scrips from DGFT to
Customs.
(ii) Message exchange for transmission of
Bills of Entry (import details) from
Customs to DGFT.
(iii) Online issuance of Export Obligation
Discharge Certificate (EODC).
(iv) Message exchange with Ministry of
Corporate Affairs for CIN & DIN.
(v) Message exchange with CBDT for PAN.
(vi) Facility to pay application fee using
debit card / credit card.
(vii) Open API for submission of IEC
application.
(viii) Mobile applications for FTP
12
D. Other new Initiatives
12. New initiatives for EOUs, EHTPs and STPs
(a) EOUs, EHTPs, STPs have been allowed to
share infrastructural facilities among
themselves. This will enable units to utilize
their infrastructural facilities in an optimum
way and avoid duplication of efforts and cost
to create separate infrastructural facilities in
different units.
(b) Inter unit transfer of goods and services have
been allowed among EOUs, EHTPs, STPs, and
BTPs. This will facilitate group of those units
which source inputs centrally in order to
obtain bulk discount. This will reduce cost
of transportation, other logistic costs and
result in maintaining effective supply chain.
(c) EOUs have been allowed facility to set up
Warehouses near the port of export. This will
help in reducing lead time for delivery of
goods and will also address the issue of unpredictability
of supply orders.
(d) STP units, EHTP units, software EOUs have
been allowed the facility to use all duty free
equipment/goods for training purposes. This
will help these units in developing skills of
their employees.
13
(e) 100% EOU units have been allowed facility of
supply of spares/ components up to 2% of
the value of the manufactured articles to a
buyer in domestic market for the purpose of
after sale services.
(f) At present, in a period of 5 years EOU units
have to achieve Positive Net Foreign
Exchange Earning (NEE) cumulatively.
Because of adverse market condition or any
ground of genuine hardship, then such period
of 5 years for NFE completion can be
extended by one year.
(f) Time period for validity of Letter of
Permission (LOP) for EOUs/EHTP/ STPI/BTP
Units has been revised for faster
implementation and monitoring of projects.
Now, LOP will have an initial validity of 2
years to enable the unit to construct the
plant and install the machinery. Further
extension can be granted by the Development
Commissioner up to one year. Extension
beyond 3 years of the validity of LOP, can be
granted, in case unit has completed 2/3rd of
activities, including the construction
activities.
(g) At present, EOUs/EHTP/STPI units are
permitted to transfer capital goods to
other EOUs, EHTPs, STPs, SEZ units. Now a
facility has been provided that if such
14
transferred capital goods are rejected by the
recipient, then the same can be returned to
the supplying unit, without payment of duty.
(h) A simplified procedure will be provided to
fast track the de-bonding / exit of the STP/
EHTP units. This will save time for these
units and help in reduction of transaction
cost.
(i) EOUs having physical export turnover of
Rs.10 crore and above, have been allowed
the facility of fast track clearances of import
and domestic procurement. They will be
allowed fast tract clearances of goods, for
export production, on the basis of preauthenticated
procurement certificate,
issued by customs / central excise
authorities. They will not have to seek
procurement permission for every import
consignment.
13. Facilitating & Encouraging Export of dual
use items (SCOMET).
(a) Validity of SCOMET export authorisation has
been extended from the present 12
months to 24 months. It will help industry to
plan their activity in an orderly manner and
obviate the need to seek revalidation or
relaxation from DGFT.
15
(b) Authorisation for repeat orders will be
considered on automatic basis subject to
certain conditions.
(c) Verification of End User Certificate (EUC) is
being simplified if SCOMET item is being
exported under Defence Export Offset Policy.
(c) Outreach programmes will be conducted at
different locations to raise awareness among
various stakeholders.
14 Facilitating & Encouraging Export of
Defence Exports
(a) Normal export obligation period under
advance authorization is 18 months.
Export obligation period for export items
falling in the category of defence, military
store, aerospace and nuclear energy shall be
24 months from the date of issue of
authorization or co-terminus with contracted
duration of the export order, whichever
is later. This provision will help export of
defence items and other high
technology items.
(b) A list of military stores requiring NOC of
Department of Defence Production has
been notified by DGFT recently. A committee
has been formed to create ITC (HS) codes
16
for defence and security items for which
industrial licenses are issued by DIPP.
15. e-Commerce Exports
(a) Goods falling in the category of handloom
products, books / periodicals, leather
footwear, toys and customized fashion
garments, having FOB value up to Rs.25000
per consignment (finalized using eCommerce
platform) shall be eligible for
benefits under FTP. Such goods can be
exported in manual mode through Foreign
Post Offices at New Delhi, Mumbai and
Chennai.
(b) Export of such goods under Courier
Regulations shall be allowed manually on
pilot basis through Airports at Delhi, Mumbai
and Chennai as per appropriate
amendments in regulations to be made by
Department of Revenue. Department of
Revenue shall fast track the implementation
of EDI mode at courier terminals.
16. Duty Exemption
(a) Imports against Advance Authorization shall
also be eligible for exemption from
Transitional Product Specific Safeguard Duty.
17
(b) In order to encourage manufacturing of
capital goods in India, import under EPCG
Authorisation Scheme shall not be eligible for
exemption from payment of anti-dumping
duty, safeguard duty and transitional product
specific safeguard duty.
17. Additional Ports allowed for Export and
import
Calicut Airport, Kerala and Arakonam ICD,
Tamil Nadu have been notified as registered
ports for import and export.
18. Duty Free Tariff Preference (DFTP)
Scheme
India has already extended duty free tariff
preference to 33 Least Developed Countries
(LDCs) across the globe. This is being
notified under FTP.
19. Quality complaints and Trade Disputes
(a) In an endeavour to resolve quality
complaints and trade disputes, between
exporters and importers, a new chapter,
namely, Chapter on Quality Complaints and
Trade Disputes has been incorporated in the
Foreign Trade Policy.
(b) For resolving such disputes at a faster pace, a
Committee on Quality Complaints and
18
Trade Disputes (CQCTD) is being constituted
in 22 offices and would have members from
EPCs/FIEOs/APEDA/EICs.
20. Vishakhapatnam and Bhimavaram added
as Towns of Export Excellence
Government has already recognized 33
towns as export excellence towns. It has
been decided to add Vishakhapatnam and
Bhimavaram in Andhra Pradesh as towns of
export excellence (Product Category–
Seafood)
19
Annexure-1
I. Merchandise Exports from India Scheme
(i) Merchandise Exports from India Scheme has
replaced 5 different schemes of earlier FTP
(Focus Product Scheme, Market Linked Focus
Product Scheme, Focus Market Scheme, Agri.
Infrastructure Incentive Scrip, VKGUY) for
rewarding merchandise exports which had
varying conditions (sector specific or actual
user only) attached to their use.
(ii) Now all these schemes have been merged
into a single scheme, namely Merchandise
Export from India Scheme (MEIS) and there
would be no conditionality attached to the
scrips issued under the scheme. Notified
goods exported to notified markets would be
rewarded on realised FOB value of exports.
A. Country Groups:
Category A: Traditional Markets (30) -
European Union (28), USA, Canada.
Category B: Emerging & Focus Markets
(139), Africa (55), Latin America and Mexico
(45), CIS countries (12), Turkey and West
Asian countries (13), ASEAN countries (10),
Japan, South Korea, China, Taiwan,
Category C: Other Markets (70).
20
B. Products supported under MEIS
Level of Support:
Higher rewards have been granted for the
following category of products:
Agricultural and Village industry products,
presently covered under VKGUY.
Value added and packaged products.
Eco-friendly and green products that create
wealth out of waste from agricultural and
other waste products that generate
additional income for the farmers, while
improving the environment.
Labour intensive Products with large
employment potential and Products with
large number of producers and /or
exporters.
Industrial Products from potential winning
sectors.
Hi-tech products with high export earning
potential.
C. Markets Supported
Most Agricultural products supported
across the Globe.
Industrial and other products supported in
Traditional and/or Emerging markets only.
21
D. High potential products not supported
earlier:
Support to 852 Tariff lines that fit in the
product criteria but not provided support in
the earlier FTP. Includes lines from Fruits,
Vegetables, Dairy products, Oils meals,
Ayush & Herbal Products, Paper, Paper
Board Products.
E. Global support has been granted to the
following category:
Fruits, Flowers, vegetables
Tea Coffee, Spices
Cereals preparation, shellac, Essential oils
Processed foods,
Eco Friendly products that add value to
waste
Marine Products
Handloom, Coir, Jute, products and
Technical Textiles, Carpets Handmade.
Other Textile and Readymade garments
have been supported for European Union,
USA, Canada and Japan.
Handicraft, Sports Goods
Furniture, wood articles
F. Support to major markets have been given
to the following product categories
Pharmaceuticals, Herbals, Surgicals
22
Industrial Machinery, IC Engine, Machine
tools, Parts, Auto Components/Parts
Hand Tools, Pumps of All Types
Automobiles, Two wheelers, Bicycles, Ships,
Planes
Chemicals, Plastics
Rubber, Ceramic and Glass
Leather garments, saddlery items, footwear
Steel furniture, Prefabs, Lighters
Wood , Paper, Stationary
iron, steel, and base metals, products
G. Other sectors supported under MEIS
352 Defence related Product with export of
US$ 17.7B consisting of Core Products (20),
Dual Use products (60) ,General Purpose
products (272).
283 Pharmaceutical products of Bulk Drugs
& Drug Intermediates, Drug Formulations
Biologicals, Herbal, Surgicals, and Vaccines.
96 lines of Environment related Goods,
Machinery, Equipment’s.
49 lines where mandatory BIS standards are
prescribed.
7 lines of Technical Textiles.
H. Participation in global value chain of the
items falling under the scheme:
1725 lines of Intermediate Goods - These
goods become inputs in the manufacturing
23
of other countries and will strengthen
backward manufacturing linkages which is
vital for India’s participation in Global Value
Chains.
1109 lines of Capital Goods sector- will also
strengthen Manufacturing Base in India.
1730 lines of Consumer Goods sector- We
hope a quantum jump in export from this
sector with strengthening of Make in India
Brand in near future.
I. Technology based analysis:
572 lines-Low skill Technology-intensive
manufacturing.
1010 lines-Medium skill Technologyintensive
manufacturing.
1309 lines-High Skill Technology-intensive
manufacturing.
J. Women Centric Products supported under
MEIS
(a) Women workers constitute 52% of
plantation workers-203 lines of Tea Coffee,
Spices, Cashew.
(b) 69% of the aggregate female employment is
concentrated in the following sectors:
(i) Manufacture of other food products -
Jelly Confectionery, tomato ketchup,
24
cooked stuffed pasta, pawa, mudi and
the like, gingerbread , papad, pastries
and cakes.
(ii) Manufacture of wearing apparel-396
lines of Readymade Garments
(c) Sectors that have a significant proportion of
female employment (more than 25%):
(i) Agricultural and animal husbandry
service activities, except veterinary
activities– 263 lines of basic
Agriculture products.
(ii) Manufacture of footwear – 28
Footwear and Leather products.
(iii) Consumer Electronics and Electronic
Components, watches and clocks -483
lines.
25
Annexure-2
II. Services Exports from India Scheme
(i) Served from India Scheme (SFIS) has been
replaced with Service Exports from India
Scheme (SEIS). SEIS shall apply to `Service
Providers’ located in India’ instead of `Indian
Service Providers’. Thus SEIS provides for
rewards to all Service providers of notified
services, who are providing services from
India, regardless of the constitution or profile
of the service provider.
(ii) The rate of reward under SEIS would be
based on net foreign exchange earned. The
reward issued as duty credit scrip, would no
longer be with actual user condition and will
no longer be restricted to usage for specified
types of goods but be freely transferable and
usable for all types of goods and service tax
debits on procurement of services/goods.
Debits would be eligible for CENVAT credit or
drawback.
(iii) The present rates of reward are 3% and 5%.
The list of services and the rates of rewards
would be reviewed after 30.9.2015.
26
Sl
No SECTORS
Admis
sible
rate
1 BUSINESS SERVICES
A
Professional services
Legal services, Accounting, auditing
and bookkeeping services, Taxation
services, Architectural services ,
Engineering services, Integrated
engineering services, Urban planning
and landscape architectural services,
Medical and dental services,
Veterinary services, Services
provided by midwives, nurses,
physiotherapists and paramedical
personnel.
5%
B
Research and development services
R&D services on natural sciences,
R&D services on social sciences and
humanities, Interdisciplinary R&D
services
5%
C.
Rental/Leasing services without
operators
Relating to ships, Relating to aircraft,
Relating to other transport
equipment, Relating to other
machinery and equipment 5%
D
Other business services
Advertising services, Market research
and public opinion polling services
Management consulting service,
Services related to management
consulting, Technical testing and
analysis services, Services incidental
to agricultural, hunting and forestry,
Services incidental to fishing, Services
incidental to mining, Services 3%
27
incidental to manufacturing, Services
incidental to energy distribution,
Placement and supply services of
personnel, Investigation and security,
Related scientific and technical
consulting services, Maintenance and
repair of equipment (not including
maritime vessels, aircraft or other
transport equipment), Buildingcleaning
services, Photographic
services, Packaging services, Printing,
publishing and Convention services
2
COMMUNICATION SERVICES
Audiovisual services
Motion picture and video tape
production and distribution service,
Motion picture projection service,
Radio and television services, Radio
and television transmission services,
Sound recording 5%
3
CONSTRUCTION AND RELATED
ENGINEERING SERVICES
General Construction work for
building, General Construction work
for Civil Engineering, Installation and
assembly work , Building completion
and finishing work 5%
4
EDUCATIONAL SERVICES (Please
refer Note 1)
Primary education services,
Secondary education services, Higher
education services, Adult education 5%
5
ENVIRONMENTAL SERVICES
Sewage services, Refuse disposal
services, Sanitation and similar
services 5%
28
6
HEALTH-RELATED AND SOCIAL
SERVICES
Hospital services 5%
7
TOURISM AND TRAVEL-RELATED
SERVICES
A. Hotels and Restaurants (including
catering)
a. Hotel 3%
b. Restaurants (including catering) 3%
B. Travel agencies and tour operators
services 5%
C. Tourist guides services 5%
8
RECREATIONAL, CULTURAL AND
SPORTING SERVICES (other than
audiovisual services)
Entertainment services (including
theatre, live bands and circus
services), News agency services,
Libraries, archives, museums and
other cultural services, Sporting and
other recreational services
5%
9
TRANSPORT SERVICES (Please
refer Note 2)
A.
Maritime Transport Services
Passenger transportation*, Freight
transportation* , Rental of vessels
with crew *, Maintenance and repair
of vessels, Pushing and towing
services, Supporting services for
maritime transport
5%
B.
Air transport services
Rental of aircraft with crew,
Maintenance and repair of aircraft,
Airport Operations and ground
handling
5%
29
C
Road Transport Services
Passenger transportation, Freight
transportation, Rental of Commercial
vehicles with operator, Maintenance
and repair of road transport
equipment, Supporting services for
road transport services
5%
D.
Services Auxiliary To All Modes Of
Transport.
Cargo-handling services, Storage and
warehouse services, Freight
transport agency services 5%
Note:
(1) Under education services, SEIS shall not be
available on Capitation fee.
(2) *Operations from India by Indian Flag
Carriers only is allowed under Maritime
transport services.
