New Foreign Trade Policy

New Foreign Trade Policy

The Government of India has announced a new Foreign Trade Policy for the period 2015-2020 on 1st April, 2015. Details of the Foreign Trade Policy 2015-2020 are available at the website of the Directorate General of Foreign Trade at http://dgft@gov.in.

The important measures taken by the Government in the Foreign Trade Policy 2015-2020 to include ‘Make in India’ and ‘Digital India’ programmes to ease the trade are:

(i) Specific Export Obligation under Export Promotion Capital Goods (EPCG) scheme, in case capital goods are procured from indigenous manufacturers, has been reduced to 75% of the normal export obligation, in order to promote domestic capital goods manufacturing industry.

(ii) Under Merchandise Exports from India Scheme (MEIS), export items with high domestic content and value addition have generally been provided higher level of rewards.

(iii) For reward schemes and duty exemption schemes, hard copies of applications and specified documents which were required to be submitted earlier have now been dispensed with.

(iv) Landing documents of export consignment as proof for notified market, can now be digitally uploaded.

(v) There will be no need to submit copies of permanent records/ documents repeatedly with each application, once the same are uploaded in Exporter/Importer Profile.

(vi) For faster and paperless communication with various Committees of DGFT, dedicated e-mail addresses have been provided for various Committees, e.g. Norms Committees, Exim Facilitation Committee etc.

The Foreign Trade Policy 2015-2020 introduces two new schemes, namely, ‘Merchandise Exports from India Scheme’ (MEIS) for incentivising export of specified goods to specified markets and ‘Services Exports from India Scheme’ (SEIS) for increasing exports of notified services from India. The scrips can be used for payment of customs duty, excise duty and service tax. All duty credit scrips issued under both the schemes and the goods imported against these scrips are fully transferable. Further, e-Commerce exports of certain specified employment creating sectors, made through courier or foreign post offices, have been supported under MEIS.

This information was given by the Minister of State (Independent Charge) in the Ministry of Commerce & Industry Smt. Nirmala Sitharaman in a written reply in Rajya Sabha today.
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India's Stand at WTO on Food Security

Together with other developing countries, India proposed an amendment to the relevant rules of the World Trade Organization (WTO) relating to public stockholding for food security purposes. At the Ninth Ministerial Conference of the WTO held in Bali in December 2013, Ministerial Decisions were taken on this and other issues including a Trade Facilitation Agreement (TFA). Subsequently, concerned at the lack of progress in implementing the Ministerial Decision on public stockholding for food security purposes, India decided not to join the consensus in the WTO on next step for the implementation of the Trade Facilitation Agreement till its concerns were addressed.

Initially there was a general campaign of misinformation and criticism of India’s stand. However, India stood firm and worked with other WTO members to find a way forward. Subsequently, a Decision was adopted by the WTO General Council (GC) in November 2014 which makes it clear that a mechanism, under which WTO Members will not challenge the public stockholding programmes of developing country members for food security purposes, in relation to certain obligations under the WTO Agreement on Agriculture, will remain in place in perpetuity until a permanent solution regarding this issue has been agreed and adopted. This strengthens the safeguard available for continuing the Minimum Support Price policy and will ensure that India’s food security operations are not constrained due to WTO rules. The GC Decision also includes a firm commitment to engage in negotiations for a permanent solution through an intensified programme of work. India is working with the WTO members to ensure a permanent solution at the earliest.

This information was given by the Minister of State (Independent Charge) in the Ministry of Commerce & Industry Smt. Nirmala Sitharaman in a written reply in Rajya Sabha today.

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Policy to Promote Export of Spices

The Government organised National Conference of all Stakeholders including producers, exporters, representatives of spice industry and state governments etc. on Development and Export of Spices on 27th January, 2015 at New Delhi to discuss and chart out a road map for development and promotion of spices including export of spices. Following the Conference, a national roadmap for spices sector has been drawn up for implementation.

Government, through the Spices Board, implements various programmes for promoting exports of spices with focus on value addition, quality improvement and branding. Spices Board provides financial assistance to exporters for infrastructure development, trade promotion including participation in international fairs, product development & research, spice processing in North East region, promotion of India spice brands and certification of Spice Houses. Spice Parks have been set up to provide common processing facilities to producers and exporters. Spices Board has setup six quality evaluation laboratories at Cochin, Mumbai, Delhi, Chennai, Guntur and Tuticorin for providing analytical services and is setting up two more at Kolkata & Kandla.

Government has recently fixed the minimum price for imported cardamom at Rs. 500/- per kg. in order to regulate quality and volume of cardamom imports. The quality of imported spices is also regularly monitored by the Spices Board. The Spices Board chairs the Codex Committee on Spices and Culinary Herbs (CCSCH) set up by the Codex Alimentarius Commission to set international standards for spices and help Indian exports.

This information was given by the Minister of State (Independent Charge) in the Ministry of Commerce & Industry Smt. Nirmala Sitharaman in a written reply in Rajya Sabha today.

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Easing Rules on Sale of SEZ Goods Within The Country

Indian Council for Research on International Economic Relations (ICRIER) has conducted a Study to carry out a comprehensive cost-benefit analysis of the Special Economic Zone (SEZ) Policy and other related aspects. It has made a number of recommendations which inter-alia include strengthening of Single Window Clearance by better coordination between Department of Commerce and state governments, integration of SEZs with domestic economy, improving the institutional and administrative framework for SEZs, aggressive marketing of SEZs, stability in SEZ policy, different incentives for different sectors in SEZs and allowing best Free Trade Agreement (FTA) rates for domestic clearance for SEZ manufacturing units.

This information was given by the Minister of State (Independent Charge) in the Ministry of Commerce & Industry Smt. Nirmala Sitharaman in a written reply in Rajya Sabha today.

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Progress of Industrial Corridor

The Government of India has conceptualized the following Industrial/ Economic Corridors in the country:

1) Delhi-Mumbai Industrial Corridor (DMIC) which covers the States of Uttar Pradesh, Haryana, Rajasthan, Madhya Pradesh, Gujarat and Maharashtra

2) Bengaluru- Mumbai Economic Corridor (BMEC) which covers the States of Karnataka and Maharashtra

3) Chennai-Bengaluru Industrial Corridor (CBIC) which covers the States of Tamil Nadu, Karnataka and Andhra Pradesh

4) Visakhapatnam-Chennai Industrial Corridor (VCIC) which covers the States of Andhra Pradesh and Tamil Nadu

5) Amritsar-Kolkata Industrial Corridor (AKIC) which covers the seven States namely Punjab, Haryana, Uttar Pradesh, Uttarakhand, Bihar, Jharkhand and West Bengal.

BMEC, VCIC and AKIC are in the initial stages of implementation whereas master planning for all the three nodes in CBIC and all nodes except for “Dadri Noida Ghaziabad” Investment region under DMIC have been completed. seven industrial cities have been taken up for development in the first phase of the DMIC project such as Ahmedabad-Dholera Investment Region in Gujarat; Manesar-Bawal Investment region in Haryana; Dadri-Noida-Ghaziabad Investment region in Uttar Pradesh; Khushkhera-Bhiwadi-Neemrana Investment region in Rajasthan; Shendra Bidkin Investment region in Maharashtra; Dighi Port Industrial area in Maharashtra; Pithampur-Dhar-Mhow Investment region in Madhya Pradesh. Various trunk infrastructure projects like development of roads and utilities, drainage, sewage, potable water, industrial water, water treatment & recycling, Sewage Treatment Plant, Common Effluent Treatment Plant, ICT etc. are being developed under DMIC,. The tender documents for construction of trunk infrastructure of Integrated Industrial Township “Vikram Udyogpuri” near Ujjain in Madhya Pradesh have already been issued. The tender documents for trunk infrastructure in Dholera, Shendra-Bidkin Industrial area & Integrated Industrial Township have also been proposed after detailed master planning and preliminary engineering. Infrastructure for creation of the industries in the other designated nodes in the region have already been identified and all of them are at different stages of implementation.

This information was given by the Minister of State (Independent Charge) in the Ministry of Commerce & Industry Smt. Nirmala Sitharaman in a written reply in Rajya Sabha today.

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MoUs Signed with Germany

Various Memorandum of Understandings (MoUs) have been signed by Indian industries with Germany recently during Hannover Messe 2015 as below. These MoUs are expected to increase FDI flows to India, bring in new technology, help growth of manufacturing sector and create employment opportunities in the country thereby boosting its economy.

1. Instrumentation Limited with KE Kauer Engineering, Germany for production of control valves.

2. Vikram Solar with Fraunhofer Institute for Solar Energy Systems ISE.

3. Hindustan Machine Tools (HMT) with FT Machine Tools, Germany for collaborating on flow forming machines.

4. HMT with Enit GmbH, Germany for total Engineering Solutions.

5. Essel Group with Wind and Sun Technology Group /FeCon GmbH to develop 12500 MW of Solar and 4000 MW of Wind Energy Projects in India.

6. Essel Group with with Passavant Energy and Environment (PE&E) for water and waste water treatment projects.

7. Essel Group with Fichtner GmbH & Co to provide comprehensive interdisciplinary range of engineering and consultancy services in areas of energy, water, sanitation, infrastructure, IT and consultancy on the implementation.

8. Essel Group with Smart Grids-Platform Baden-Wuertemberg to act as facilitator in linking the energy networks for Essel group.

9. Roots Group India and Neander Motors, Germany for transfer of technology and Joint Venture for production of a very high end latest technology, Twin Cranks, Diesel Engine with varied applications in Auto Marine Energy, etc. (0.6 million Euros).

10. iPLON with Welspun Renewables in the area of Green Energy Commitment.

11. Heavy Engineering Corporation (HEC) with Kirow Adelt GmBh of Leipzig for manufacture of Railway Cranes.

This information was given by the Minister of State (Independent Charge) in the Ministry of Commerce & Industry Smt. Nirmala Sitharaman in a written reply in Rajya Sabha today.

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Meeting Challenges of 'Make In India' Campaign

Government has launched the ‘Make in India’ initiative which aims at promoting India as an investment destination and to establish India as a global hub for manufacturing design and innovation. The initiative aims to provide a congenial environment to the business community so that they can devote their effort, resources and energy in productive work. A number of steps have been taken by the Government to improve ease of doing business. Rules and procedures have been simplified and a number of products has been taken off licensing requirements.

The Government intends to provide a robust infrastructure to business through development of various facilities and institutions. Government aims at developing industrial corridors and smart cities to provide a conducive working environment with state-of-the-art technology. Efforts are being made to provide skilled manpower through a national skill development programme. Innovation is encouraged through better management of patent and trademarks registration.

Government has opened up a number of sectors for FDI. The Policy in defence sector has been liberalized and FDI cap has been raised from 26% to 49%. 100% FDI has been allowed in defence sector for modern & state of the art technology on case to case basis. 100% FDI under automatic route has been permitted in construction, operation and maintenance in Rail Infrastructure projects. Further, liberalization norms for Insurance and Medical Devices has been done.

25 Industry related Ministries are working on sector specific targets, which have been identified by them after detailed discussion with various stakeholders in the National Workshop held on 29th December 2014. Each Ministry has identified action plan for the next one year and three years.

‘Make in India’ program represents an attitudinal shift in how India relates to investors; not as a permit-issuing authority, but as a true business partner. An Investor Facilitation Cell has been created in ‘Invest India’. A dedicated team of the Investor Facilitation Cell is there to guide and assist first-time investors.

This information was given by the Minister of State (Independent Charge) in the Ministry of Commerce & Industry Smt. Nirmala Sitharaman in a written reply in Rajya Sabha today.

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Replacement of System of Prior Permissions

In pursuance of announcement of the Finance Minister in his budget speech, this Department of Industrial Policy and Promotion with the approval of competent authority has constituted an Expert Committee to examine the possibility of replacing multiple prior permission with pre-existing regulatory mechanism. The Terms of Reference of the Committee are:-

1. Study the requirement of various prior permissions with an exhaustive inventory of such permission;

2. Examine the possibility of replacing these prior permissions with a pre-existing (proposed) regulatory mechanism;

3. Identify safeguards to be put in place while replacing the system of prior permission and integrating these safeguards in the proposed regulatory mechanism;

4. Recommend a framework of the proposed regulatory mechanism; and

5. Draft the proposed legislation.

This information was given by the Minister of State (Independent Charge) in the Ministry of Commerce & Industry Smt. Nirmala Sitharaman in a written reply in Rajya Sabha today.

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India to commit supply of bales of Cotton to Garments Industry

At present there is no restriction on export of cotton. Even the requirement of registration of contracts has been removed vide Notification No. 102 (RE-2013)/2009-14 dated 08.12.2014. As such, the foreign countries are free to procure cotton from India as per their needs.

So far as the border countries are concerned, China, Bangladesh and Pakistan are among the top 5 importers of Cotton from India. Other countries sharing border with India import negligible quantities from India. Country-wise details for exports during the past three years (top 5 destinations) are as under:

Value in US$ Mill
Country	2012-13	2013-14	2014-15 (Apr-Feb)
China	2,237.38	1,912.95	696.50
Bangladesh	610.06	698.88	510.26
Vietnam	166.51	220.34	214.46
Pakistan	392.78	343.35	79.15
Taiwan	42.91	43.80	39.59
Others	298.06	418.41	167.63
Total	3,747.70	3,637.73	1,707.59
Source: DGCIS

This information was given by the Minister of State (Independent Charge) in the Ministry of Commerce & Industry Smt. Nirmala Sitharaman in a written reply in Rajya Sabha today.

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Decline in Growth Rate of Core Sectors

The Index of Eight Core Industries (ICI) measures performance of eight infrastructure industries, viz Coal, Crude Oil, Natural Gas, Refinery Products, Fertilizers, Steel, Cement and Electricity, compiled at the base year of 2004-05. The cumulative growth rate of ICI during April-March, 2014-15 was 3.5 % as compared to 4.2 % during corresponding period of previous year. However, the production index of various core industries has displayed variation in both direction and magnitude. Crude Oil, Natural Gas, Refinery Products, Fertilizer and Steel have contributed to the lower growth in overall index during April-March, 2014-15 as compared to corresponding period of previous year. Industry wise details of the growth rates are given below:

Growth Rate of Core Industries (in %)

Industry	April-March 2013-14	April-March 2014-15
Coal	1.3	8.2
Crude Oil	-0.2	-0.9
Natural Gas	-13.0	-5.2
Refinery Products	1.5	0.4
Fertilizers	1.5	-0.1
Steel	11.5	0.5
Cement	3.1	5.6
Electricity	6.0	8.0
Overall Index	4.2	3.5

In general, low production of Crude Oil and Natural Gas was inter-alia, due to ageing fields, water/sand ingress, environmental problems, etc. and that of Refinery Products was due to shut down of certain units on account of accidents. Further, the decline in production of Steel was mainly on account of procedural and infrastructural bottlenecks faced by the industry. Production of Fertilizer was affected due to non-availability of adequate natural gas, unforeseen shutdown and shortage of raw materials of phosphoric acid, etc.

The Government is taking steps to revive production in these industries which includes measures relating to policy, procedures, improving infrastructure and ensuring availability of required inputs.

This information was given by the Minister of State (Independent Charge) in the Ministry of Commerce & Industry Smt. Nirmala Sitharaman in a written reply in Rajya Sabha today.

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