Hightech product export promotion scheme

India has a vision of transforming itself into a developed nation by 2020. Technology will
be a powerful tool in achieving this transformation. There is an emergence of a number of
Indian firms which are reckoned as world-class. For instance, the Forbes’ list of 200 best,
under one-billion dollar companies outside the US has 18 companies from India. A year
ago, the Forbes’ listed only 13 Indian companies. With winds of ‘Technoglobalism’
sweeping the country, India is also rapidly becoming a global R&D hub. Computer
software, IT consulting, business process outsourcing, semiconductor design,
automobiles & auto components, drugs & pharmaceuticals, etc. are some of the areas
where India has now made a global impact.

The technology intensive exports had a share of around 19 per cent in overall exports of
US$52.2 billion during 2002-03. It should be now well within the reach of India to bring
about a quantum jump in the share of technology intensive exports in overall exports. The
service sector also showed a spectacular growth of 20.8 per cent during 2002-03. India,
with services exports of US$25 billion and a share of 1.4 per cent in world export of
services during 2003 ranked 20th in the world. Given India’s large pool of high quality
human resource, available at a fraction of international costs, there is also a good
potential for faster growth in technology driven services sector exports from India.
his move comes nearly two years after the scheme was announced in April 2007 in the
annual supplement to the foreign trade policy.

The scheme provides for duty credit of 10 per cent on incremental export growth for
exports of high-tech items.

The duty credit can be utilised to import goods duty free (exemption from both basic
customs duty and countervailing duty) through the specified ports of the country.

The Finance Ministry has now said that this benefit would be available for duty credit
scrips issued against exports of 12 specified high-tech items, official sources said.

These items are public call office using wireless (GSM/satellite) technology; point of
sale terminals/transaction terminals (epos) using
GSM/CDMA/Ethernet/WiFi/serial/PSTN technology; SIM cards; Memory cards;
cellular phones (3G Standard, wireless internet and GPS); automatic bank note
dispensers; ultrasonic scanning apparatus; magnetic resonance imaging apparatus;
still image video cameras; videophones; hybrid integrated circuits and solar
cells/photovoltaic cells.

The Finance Ministry has also stipulated that the duty credit cannot be utilised for
imports of peas, garlic and all other vegetables with a import duty of more than 30
per cent, coconut, arecanut, oranges, lemon, fresh grapes, apple, pear and all fruits
with a duty of more than 30 per cent.
Similarly, the scrip cannot be utilised for import of spices with a duty of more than
30 per cent, oil seeds, natural rubber, tea, coffee and pepper besides certain capital
goods like agricultural tractors above 25 HP and up to 75 HP.

Objective is to incentives export of High technology products.

Exports of High-Technology products in free foreign exchange to all countries, shall
he entitled for Duty Credit Scrip equivalent to:

a) 1.25 % of FOB value of exports: or

b) 5% of incremental growth in FOB value (realized as per BRC/ FIRC) of exports of

notified products for current year(i.e.2008- 09) over previous year (i.e., 2007-08)
(all taken together) and similarly for each subsequent licensing year.

Exporter may opt for either (a) or (b).

Measures in Foreign Trade Policy 09-14

To encourage high technology exports Shri Kamal Nath announced a new scheme
providing 10% duty free benefit on incremental exports subject to a ceiling of Rs.15
crores for each firm/company. The scheme provides for duty credit of 10 per cent on
incremental export growth for exports of high-tech items. The duty credit can be utilised
to import goods duty free (exemption from both basic customs duty and countervailing
duty) through the specified ports of the country.

The Finance Ministry has now said that this benefit would be available for duty credit
scrips issued against exports of 12 specified high-tech itemsThese items are public call
office using wireless (GSM/satellite) technology; point of sale terminals/transaction
terminals (epos) using GSM/CDMA/Ethernet/WiFi/serial/PSTN technology; SIM cards;
Memory cards; cellular phones (3G Standard, wireless internet and GPS); automatic bank
note dispensers; ultrasonic scanning apparatus; magnetic resonance imaging apparatus;
still image video cameras; videophones; hybrid integrated circuits and solar
cells/photovoltaic cells.

The Finance Ministry has also stipulated that the duty credit cannot be utilised for
imports of peas, garlic and all other vegetables with a import duty of more than 30 per
cent, coconut, arecanut, oranges, lemon, fresh grapes, apple, pear and all fruits with a
duty of more than 30 per cent.

Similarly, the scrip cannot be utilised for import of spices with a duty of more than 30 per
cent, oil seeds, natural rubber, tea, coffee and pepper besides certain capital goods like
agricultural tractors above 25 HP and up to 75 HP.
Sustainability of India’s economic reforms and international competitiveness is
substantially dependent on its ability to increase exports, consistent with the country’s
need for import of goods, services and technology. To have a sustained export growth, it
is imperative that India gears itself for a quantum jump in technology-based goods and
services. Unless there is considerable value-addition, continued export expansion with
limited growth in agriculture and industrial production will not be feasible. Similarly,
services exports, specially technology intensive, must be pushed up. Considering the fact
that services today account for more than 50 per cent of GDP and its rate of growth is
much faster than the other GDP components, its export potential is beyond doubt.
However, new areas involving higher technological and managerial contents may also
need to be identified and nurtured, keeping in view the existing capabilities and potential
not yet exploited fully.
Assignment ::

Hightech product export

promotion scheme

Malaya Kumar Singh

Roll No- 21
MIB – 2nd Sem