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Essentials of Exports


Dr. Vijaya Katti

Chairperson (MDPs)
Indian Institute of Foreign Trade
New Delhi
For Niryat Bandhu (Batch#21) (Session on 10th October 2017)
• Foreign Trade Policy of India 2015-2020
• Export Promotion Bodies
• Institutional Framework for Export
• Basic Steps in Exports
• GATT to WTO and related issues
Foreign Trade Policy related issues
INDIA’S FTP 2015 - 2020
• India’s new five year FTP 2015 – 2020 provides a stable
and sustainable policy environment ; overarching
framework and architecture to catalyse exports and
facilitate nay rationalise imports; generate
employment and increase value addition in the
• India’s FTP – Domestic Trade Policy is anchored in the
Domestic Policy framework (symbiotic relationship and
synergy) Export Promotion Mission to be created that
would be synergised with the National Missions of
‘Make in India’; ‘Digital India’ – e Governance -
Improve the ‘ease of doing business’ index; ‘Skill India’.

• India’s FTP Statement explains the Vision ,Mission.

Objectives and Goals ; Market and Product strategy;
Structure and Architecture to achieve the goals.
• VISION - Super Ordinate Goal – big Hairy Audacious Goal (b
HAG ) of doubling India’s exports of merchandise and
services from about USD 450 Billion in FY 2013 -14 to USD
900 Billion in FY 2019 – 2020 and to raise India’s share in
world exports from 2% to 3.5%.
• Every thing hangs together in International Trade – so
‘Whole of Government’ approach - State Governments ;
Other Central Government Ministries to be also involved
rather than just the role of Department of Commerce in the
export value chain (both up stream and down stream
activities in terms of Michael Porter’s value chain)
2015 – 2020

• Market Strategy – Market Penetration and Market

Development (Diversification). India has signed 5
limited PTAs ; 11 FTAs and is negotiating 17 FTAs.
Some of the issues being addressed are Rules of
Origin; Inversion in Duty Structure; Capturing
preferential export data; FTA outreach and
information dissemination and setting up a Trade
Portal. Under MEIS (Chapter – 3 – Export Reward
Scrips), countries have been grouped into three
categories – A – Traditional Markets ; B – Emerging &
Focus Markets; C – Other Markets.

• NAFTA Countries – USA , Canada and Mexico – negotiating

a FTA with Canada.
• European Union (EU) – negotiating a BTIA.
• Australia and New Zealand – negotiating a CECA/CEPA
• South Asia – Sri Lanka FTA and discussions with Pakistan.
• Focus on Iran.
• SE Asia under the Look/ Act East Policy – ASEAN – India
Trade in Goods/Services/ Investment Agreement.
• Future Focus on CLMV (Cambodia; Lao PDR; Myanmar;
Vietnam) and India – Myanmar – Thailand Trilateral

• NE Asia – Focus on China , Japan and South Korea.

• Focus on Africa ; West Asia & North Africa (WANA)
particularly UAE; Latin American and Caribbean region
- India – Chile/ Peru PTA being negotiated ; India –
MERCOSUR (Argentina , Brazil , Paraguay, Venezuela
and Uruguay) PTA already in place.
• Focus on 12 countries of Commonwealth of
Independent States (CIS) – negotiating a RTA with the
Customs Union of Russian Federation, Kazakistan and
Belarus. Connecting India with the CIS – the
International North South Transport Corridor.

• PRODUCT STRATEGY – Focus on moving up the value chain –

Value added products (more domestic value in sync with Make in
India) – Engineering Products ; Electronics and Drugs and
• Focus on labour intensive products (create employment
opportunities so that our demographic dividend does not become
a demographic disaster) – handicrafts , leather, textiles, gems and
jewellery; agro and plantation products; marine products.
• Focus on new , innovative and high tech products and Project

• Move towards ‘World Class Products’-

transforming India into a manufacturing and
exporting hub. Build ‘Brand India’.
• Facilitating and encouraging export of Dual
use items – Special Chemicals , Organisms,
Materials, Equipment and Technologies
(SCOMET) items – validity of SCOMET
authorisation has been extended from 12 to 24
months to help industry to plan their activity in
an orderly manner and obviate the need to
seek re validation or relaxation from DGFT.
• Facilitating and encouraging export of defence
items – normal export obligation period under
Advance Authorisation is 18 months which has
been extended to 24 months. 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 for defence and
security items for which industrial licenses are
issued by DIPP.
FTP 2015 - 2020


– Earlier there were a plethora of reward schemes like
Focus Product Scheme; Focus Market Scheme; Market
Linked Focus Product Scheme; Vishesh Krishi Gram
Udyog Yojna Scheme; Incremental Export
Incentivisation scheme ; SHIS; AIIS etc. These have
been rationalised and now there are only two
schemes (Buckets) -:
– Merchandise Exports from India Scheme (MEIS)shall
be payable as percentage of realised FOB Value (in
FFE) as reward for export of notified goods to notified
FTP 2015 - 2020

• The rewards would range from 2% to 5% on

realised FOB value of Exports in FFE.
• This scheme has replaced Served from India
Scheme (SFIS) and now applies to ‘Service
Providers located in India’ instead of ‘Indian
Service Providers’ earlier. Under this scheme
selected services would be rewarded @ 3 % or
5% of the Net Foreign Exchange (NFE) earned.
• Under both the schemes Duty Credit Scrips
(DCSs) would be given as reward to the exporters.
FTP 2015 - 2020


• New initiatives for EOUs, EHTPs and STPs – share
infrastructural facilities; inter unit transfer of goods and
services ; set up warehouses near the port of export;
use all duty free equipment/goods for training
purposes ; simplified procedure to fast track the de
bonding etc.
• A new Chapter -8 on Quality Complaints and Trade
Disputes has been incorporated in the new FTP. A
Committee on QC &TD would be set up in 22 R A s of
DGFT with members from EPCs/ FIEO/APEDA/EIC etc to
resolve disputes at a faster pace.
FTP 2015 - 2020

• Additional Ports allowed for export and

import – Calicut Airport in Kerala and
Arakonam ICD in Tamil Nadu have been
notified as registered ports for import and
export. Vishakhapatnam and Bhimavaram
have been added as Towns of Export
Excellence (TEE) for sea foods category.
• Goods falling in the category of handloom
products, books/periodicals, leather footwear,
toys and customised fashion garments, having
FOB value up to Rs 25,000 per consignment
(finalised using e – commerce 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.

• Reduced Export Obligation (EO) for domestic procurement under

EPCG scheme – specific EO under EPCG scheme in case capital
goods are procured from indigenous manufacturers which is
currently 90% of the normal EO (6 times the duty saved amount)
has been reduced to 75% in order to boost ‘Make in India’.
• Higher level of reward DCSs under MEIS for export items with
high domestic content and value addition.
• In order to encourage manufacturing of indigenous capital goods,
imports under EPCG authorisation shall not be eligible for
exemption from payment of Anti Dumping Duty, Safeguard Duty
and Transitional Product Specific Safeguard Duty.
• Online filing of documents/applications and paperless
trade in 24 x 7 environment -:
• 70% of applications filed in DGFT relate to Chapter 3
and Chapter 4. Henceforth hard copies of applications
and specified documents under these chapters would
not be required to be submitted to the Regional
Authorities (RAs) under DGFT. Applications under
Chapter – 5 would be taken in the next phase.
• Certificates issued by C A s / Cost A s/ C S s to be
enabled to be digitally signed and uploaded in the new
• Landing documents of export consignments as proofs
for notified markets to be enabled to be digitally up
loaded by any exporter / Three , Four , Five Star
Export Houses.
• Under Para 2.06 of FTP only 3 mandatory documents
are required for - :
• Export of goods from India - : Bill of Lading/ Airway
Bill ; Commercial Invoice cum Packing List ; Shipping
Bill /Bill of Export.
• Import of goods into India – Bill of Lading/ Airway Bill ;
Commercial Invoice cum Packing List ; Bill of Entry.
• Exporter Importer Profile (EIP) has been created to
upload documents and there would be no need to
submit copies of permanent records/ documents like
IEC, PAN , RCMC, Manufacturing Licence etc with each
application once uploaded.
• Online Inter Ministerial Consultations for approval of
export of SCOMET items , Norms fixation, Import and
Export Authorisations in a phased manner.


• Message exchange for transmission of chapter 3 export
reward Duty Credit Scrips from DGFT to Customs.
• Message exchange for transmission of Bills Of Entry
(Import details) from Customs to DGFT.
• Online issuance of Export Obligation Discharge
Certificate (EODC).
• Message exchange with CBDT for PAN.
• Message exchange with Ministry of Corporate Affairs
for CIN & DIN.

• Facility to pay application fee using Debit/

Credit Card.
• Open API (Application Programme Interface)
for submission of IEC application.
• Mobile applications for FTP.
• Capacity building of the relevant stakeholders and institutions is
of utmost importance in order to fully realise the potential of
various Trade Agreements and FTP measures. The focus areas
would be as follows -:
• Training of Officers of the Export Promotion Councils (EPCs) and
Export Development Authorities.
• Establishment of a trade research/Analysis cell in these
• Creation of an internal team for soliciting value added inputs
from stakeholders.
• Development and regular updation of the web portals of
• Under Para 1.08 of FTP , DGFT is implementing
Niryat Bandhu Scheme (NBS) for mentoring new
and potential exporters on the intricacies of
foreign trade through counselling , training and
outreach programmes.
• Considering the strategic significance of Small
and Medium Enterprises (SMEs) in the
manufacturing sector and employment
generation, SME Clusters have been identified for
focused interventions to boost exports.
Startup India Stand up

• Our Prime Minister unveiled a 19-point action

plan for start-up enterprises in India. Highlighting
the importance of the Standup India Scheme,
Hon’ble Prime minister said that the job seeker
has to become a job creator. Prime Minister
announced that the initiative envisages loans to
at least two aspiring entrepreneurs from the
Scheduled Castes, Scheduled Tribes, and Women
categories. It was also announced that the loan
shall be in the ten lakh to one crore rupee range.
• Stand up India backed up by Department of
Financial Services (DFS) intents to bring up
Women and SC/ST entrepreneurs. They have
planned to support 2.5 lakh borrowers with Bank
loans (with at least 2 borrowers in both the
category per branch) which can be returned up to
seven years.

• “There will be no income tax on startups’ profits

for three years”

• Under para 1.07 of the FTP , DGFT Officers

have to work not as Controllers but as
Facilitators of exports / imports (Niryat
Bandhus). Focus would be on good
governance; efficient, transparent and
accountable delivery systems.
Recent initiatives of the Govt. of India for speedy disposal of work of
SEZs :-

 Work Disposal Timelines have been implemented in the SEZs across

the country w.e.f. 14.08.2014.
 Online modules have been implemented w.e.f. 01.11.2014 for more
effective digitization and online processing of applications.
 Harmonization of procedures, simplification of practices &
standardization of Forms in all SEZs has been implemented w.e.f.
 Govt. of India vide GSR(5) dated 2nd January, 2015 has issued
notification allowing dual-use of infrastructure in NPA in SEZs by both
SEZ and DTA entities, by amending Rule 11(10) of SEZ Rules, 2006.

Department of Commerce, Govt. of India 29

Export Promotion Bodies

• Details available at : http://commerce.gov.in/

The course on “Export & Import Business”
has 7 segments

Basic steps for Exporting

Marketing related issues (Identification of Product and Market)

WTO Related Issues

FTP related issues

Finance/Risk Management issues

Customs and Excise interface/Sales contract

Preparation & Execution of Export Business Plan
Institution Framework: An overview
Tier Bodies Responsibilities
Tier I Department of Commerce Framing of Trade Policy Coordinating
discussions between industry and
Government for bringing in required
Tier II Advisory Bodies Assist the Export effort of specific
product group
Tier III Commodity Organizations Facilitate and assist exporters to
expand markets

Tier IV Service Organizations Handle export import of specific

Tier V Government Trading Facilitate export promotion from the
Organizations States
Tier VI State Export Promotion
Institutional Setup

• Institutions involved in export promotion efforts

can be put into six different categories. Ministry
of Commerce is included at the top level. It is the
main organization involved in the formulation of
and guidance for India’s trade policy.
• Second level institutions include advisory bodies
which ensure that they deal with the export
problems with the help of mutual discussions
between the government and the industry in a
very comprehensive manner.
• The third level institutions include commodity
specific organizations dealing with the
problems related to individual commodities
and different groups of commodities.
• Institutions at the fourth level belong to the
category of service institutions which help and
provide full support to exporters to expand
their business operations and also expand
their effective reach to the world markets.

• Government trading organizations especially

set up to handle export-import of identified
commodities get incorporated into the fifth
tier. They supplement the efforts of various
private enterprises in the field of export
promotion and import management.
• Sixth tier institutions cover agencies of export
promotion at the state level.
Important Steps to Export
• Step 1: Point to remember
• Step 2: Find item for export
• Step 3: Find HS Code
• Step 4: Find your item Type
• Step 5: Analyse Export Import Data
• Step 6: Find Buyer
DGFT and Export Promotion
1. Foreign Trade Policy
2. Promotional Schemes
3. Duty Exemption Schemes
4. Scheme for Capital Goods
5. Export Oriented Unit EOU
6. Special Economic Zone SES
Step 1: Points to Remember
1. Export-Import is totally free with very limited
restriction (96% items are free items).
2. To find buyer-seller is your decision.
3. To decide product and its price-qty are your
4. Products should be exported not taxes.
• Step 2: Find Item for Export :
• Step 3: Find HS Code :
• Step 4: Find your item Type :
• Step 5: Analyse Export-Import Data :

Step 2,3,4 & 5 will be explained with hands-on

database surfing with Internet.
• Step 6: Find Buyer
1. Experience
2. Business Promotion: website
3. Distributors, Dealers, Commission Agents
4. Reference
5. Visits, Exhibition, Event Participation
6. Advertise and Marketing
7. Surfing
• Step 6 (Contd..)
1. Take order
2. Find CHA (Custom House Agent)
3. Find mode of export (sea/air)
4. Find Carrier
5. Fill Shipping Bill
6. Take payment
7. Request for Bank Realization Certificate
8. Register for Export Scheme
Just For Starters: How To Start Your
Own Export Business
- A Book Published by NIIR Project Consultancy Services

• Entrepreneurship helps in the development of

nation. A successful entrepreneur not only
creates employment for himself but for
hundreds. Deciding on a right project can lead
you to the road to success.
• Any unit or new entrepreneur, establishing or
implementing the project needs a complete set
of plan and finance for making it successful.
GATT 1947

US proposals made in 1945

World economy to be organized around three corner
stones: IMF, IBRD, and ITO
Plans for the ITO were abandoned
GATT negotiated in 1947, in force from January 1948
GATT 1947 was, consequently, a treaty without its planned
administering organization
123 bilateral agreements covering 50,00,000 items
Founding Members of the GATT

1. Australia 13 Lebanon
2. Belgium 14 Luxembourg
3. Brazil 15 The Netherlands
4. Burma (now Myanmar) 16 New Zealand
5. Canada 17 Norway
6. Ceylon (now Sri Lanka) 18 Pakistan
7. Chile 19 Southern Rhodesia
8. China (now Zimbabwe)
9. Cuba 20 Syria
10. Czechoslovakia 21 South Africa
11. France 22 United Kingdom
12. India 23 United States
Emergence & Agreement establishing
of WTO

• Emergence of WTO on 1st

January 1995
The agreement
establishing WTO calls for
a single institutional
Ensures a single
undertaking approach
Basic principles of GATT/WTO

Market access
Reduction and binding of tariffs
General elimination of quantitative restrictions on imports and

National treatment
The structure of WTO

Highest authority-ministerial conference

The general council delegates responsibility to three other
major bodies namely the councils for
Trade in goods,
Trade in services and
Trade-related aspects of intellectual property rights.
Committee on trade and development
Committee on BOP restriction
Committee on budget, finance, and administration
The structure of WTO (Cont’d…)

Committee on Regional Trade Agreement 1996

Bodies set under limited membership Plurilateral Trade
Committee on market access
Working party on accession
Working groups on relationship between
Trade and investment
Trade and competition policy
Transparency in government procurement

The WTO agreement (which some have described

as a “mini charter”) is strictly institutional and
procedural in character and has no substantive
rules or principles other than those which are
included in the annexed agreements.

Administering and implementing the multilateral and

plurilateral trade agreements which together make up the

Acting as a forum for multilateral trade negotiations

Seeking to resolve trade disputes

Overseeing national trade policies
Cooperating with other international institutions involved in
global economic policy making
Assisting developing countries in trade policy issues,
through technical assistance and training programmes
Annex 1

Annex 1A  Multilateral agreement

on trade in goods

Annex 1B  General agreement on

trade in services and

Annex 1C  Agreement on trade-

related aspects of
intellectual property
Annex 1A: Multilateral agreement on
trade in goods

GATT 1994
Agreement on agriculture
Agreement on application of SPS measures
Agreement on TBT
Agreement on textiles & clothing
Agreement on TRIMS
Annex 1A: Multilateral agreement on trade in
goods (Cont’d…)

Agreement on the implementation of article VI of

GATT 1994
Agreement on pre-shipment inspection
Agreement on rules of origin
Agreement on import licensing procedures
Agreement on subsidies and countervailing
Agreement on safeguards
Annexes 1B and Annexes 1C

Annex 1B – General agreement on Trade in


Annex 1C – Intellectual property and its rights -

What they imply?
Four Modes of Supply of Services

The services trade can be any one or a combination of:

Cross-border supply Supply from the territory of one Member

into the territory of any other Member

Consumption abroad Cross-border movement of consumers to

purchase a service abroad

Commercial presence Supply of a service via establishment of

a territorial presence

Presence of natural Entry and temporary stay of foreign

persons residents to supply a service
Universal Coverage

All Services (except those provided in the exercise of

governmental authority)

Business and professional Finance and insurance

Communications Health and social

Construction Tourism

Distribution Recreation, culture, sports

Education Transport

Environment Other
Annex 1C - TRIPS…

Sets out minimum protection to be given to each category of

intellectual property in the national laws of each WTO member.
Lays down procedures and remedies to be provided by each country
for intellectual rights enforcement.
Is a minimum standard agreement encouraging countries to provide
higher level of intellectual property protection and explicitly permits
them to do so.


To give adequate and effective protection to the intellectual property

rights to reward creative and inventiveness.

The seven IPRs

• Copyright and related rights;

• Trademarks;
• Geographical indications, including appellation of origin
• Industrial designs;
• Patents;
• Layout-designs of integrated circuits;
• Undisclosed information, including trade secrets.

• Anti-dumping Duties
• Countervailing Duties
• Safeguard Measures


Annex 2 - Understanding the rules and

procedures governing the settlement of dispute

Annex 3 - Trade policy review mechanism

Annex 4 – Plurilateral trade agreement

Agreement on trade in civil aircraft
Agreement on government procurement
Trade Facilitation
In WTO-so far, no clear definition on the term “Trade
Facilitation”. However, it is understood that:

• Trade Facilitation means systematic

rationalization of procedures and
documentation for international trade.

• Issues covered under GATT Art. V, VIII &


Existing WTO rules on
trade facilitation
 Article V: Freedom of Transit
most convenient routes, No discrimination, Removal of
unnecessary delays/restrictions and No duties
 Article VIII: Fees and Formalities connected with Importation
and Exportation
Fees should reflect cost for services rendered, Reduce number
and kind of fees, Simplify formalities & documents and No
penalty for minor errors
 Article X : Publication and Administration of Trade
Publication, Administration of Laws and Appeals

Regional Trading Agreements

• A Trade Bloc is a large Free Trade Area (FTA) formed

by one or more tax, tariff and trade agreements.
• It is usually established through a trade pact covering
different issues of economic integration.
• It is usually regional by nature.
• Increase freedom of trade
• Development of closer integration of economies of
contracting Parties
• 1st – “Substantially All” test
• 2nd – “Higher or More Restrictive” test
• 3rd – Notification under XXIV

• Under Article XXIV customs union and free trade

area agreements are a permitted exception to the
cardinal principle of non-discrimination.
• It is recognized that such agreements have the
potential for further economic integration without
necessarily adversely affecting the interest of third
Criteria – Rules of Origin

• Regional Value-Added content

• Change in tariff classification
• Local Content Requirement
Stages of Regional Integration

Three shallow integration


Two Deep
Integration Stages

Economic Union
Customs Union Integrating
Preferential Trade Agreements Free Trade Area Common level of Common Market
national economic
Elimination of all trade barriers vis-à- Free movements of
Partial preference to trading policies and a
Tafriffs, QRs and NTBs vis non-members factors of
partners common currency
Ministerial conferences
First Ministerial – Singapore (9-13 December 1996)
Second Ministerial – Geneva (18-20 May 1998)
Third Ministerial – Seattle (November 30 – December 3, 1999)
Fourth Ministerial – Doha (9-13 November 2001)
Fifth Ministerial – Cancun (10-14 September 2003)
Geneva Framework – Mexico (July 2004)
Sixth Ministerial – Hong Kong (13-18 December 2005)
Seventh Ministerial –Geneva (30 November - 2 December 2009)
Eighth Ministerial – Geneva (15-17 December 2011)
Ninth Ministerial – Bali, Indonesia (3-6 December 2013)
Tenth Ministerial– Nairobi, Kenya (15 to 18 December 2015)
Eleventh Ministerial to be held - Buenos Aires (11 to 14 December 2017)
Thank You..