1. Foreign Trade and India
Ancient maritime trading nation
Bay of Bengal was once known as CHOLA LAKE
Exports touch $155 billion in
India is among the top ten in services exports
The export basket

2. Laws to note EX & IM Control Act 1947
The foreign trade ( development and regulation ) Act 1970
EXIM policy 1985
Liberalization of EXIM policies Act 1992
New EXIM policy

3. Steps in Exporting A business organization Manufacturer exporter
Merchant exporter
Agent/ intermediary
Service provider
Product selection
Procurement of order

4. Essentials of export contract
Product, standards & specification
Quantity
Inspection
Value
Terms of delivery
Taxes, duties and charges
Period of shipment

5. Export contract contd….
Packing, labeling,marking
Terms of payment- Amount.mode & currency
Discounts and commissions
Licences and Permits
Insurance
Documentary requirements
Guarantee

6. Export contract contd……
Force majeure
Remedies
Arbitration
The case of Dalmia & Arun Jain of Polaris

7. Incoterms EXW– Ex works FCA--- Free Carrier
FAS---- Free alongside ship
FOB---- Free on board
C&F----- Cost and freight
CIF----- cost ,insurance and freight
CPT– Carriage paid to
CIP---- Carriage and insurance paid to

8. Incoterms contd------
DAF– delivered at frontier
DES--- delivered EX ship
DDU--- delivered duty unpaid
DDP---- delivered duty paid
DEQ– delivered ex quay

9. Risks in International trade
Credit risk
Currency risk
Carriage risk
Country risk
Voyage risk

10. Export registration IEC with DGFT PAN Bank account
Appointment of agents
Export licenses
Customs registration
Registration with export promotion councils

11. Export inspection IPQC– In process quality control ISI, AGMARK
Fumigation
ISO & ISO – 14000
EIA
SA- 8000
Global compact

12. Currency management Understanding currency fluctuations
Invoicing currency
Forward contract
Hedging
Repatriation
EEFC

13. Reading FTP The policy The handbook of procedures
The ITC- HSN classification
Export licenses
Import licenses
OGL
State Trading

14. Customs procedure- export
Exporter
Person in charge of conveyance
Bill of lading
Export general manifest
Shipping bill, packing list,ARE etc
Stuffing/ examination/ sealing
Self- sealing/ self- certification

15. Customs procedure contd----
Importance of ICD/CFS/
Customs bonded warehouse
Green channel for exporters
Assessment
New concept of Transaction value

16. Customs import procedure
Importer
Person in charge of conveyance
Bill of entry
Import general manifest
Assessment
EDI

17. Central excise export procedure
Exports are free of duty
Bond clearances
Rebate clearances
ARE 1
ARE 2
Proof of export
Sealing of container

18. Export promotion schemes
Section 65 of customs Act
Advance authorization / DFIAS
Export promotion capital goods
DEPB
Drawback
EOU
SEZ

19. EOU Minimum investment of INR 10 million
300 warehousing districts as location
Nearly 3000 units in existence
New or conversion from DTA
Manufacturing & services covered
Trading units are not permitted

20. EOU contd------- Widest definition of manufacture Single B – 17 Bond
Duty-free import of raw materials and inputs and similar sourcing of inputs and capital items from DTA
NFE= A – B = 0 +
EO over 5 years

21. EOU contd----- Can subcontract part of production to DTA
Can sell upto 50% of production in DTA
Can sell to other EOU/ BTP/ EHTP/STP/SEZ and count against EO
Exempt from state trading and SSI reservation restrictions
100% EEFC retention

22. EOU contd-----
Clubbing of exports with exports of parent company for export house status
CST exemption
PC and CT3 procedure
Self sealing
Green channel clearance on import

23. Drawback
Recouping of duties of customs and central excise and service taxes
All industry rates
Brand rate
Special brand rate
Post export documentation

24. EPCG Import of capital goods at 5% concessional customs duty
EO is 8 times the duty saved in 8 years
12 years for SSI holders and licenses for INR1000million
Covers manufacturer exporters or merchant exporters with supporting manufacturers

25. EPCG contd----- Direct as well as third party exports allowed
Shipments under Advance authorization DFIAS , DEPB & draw back will count for fulfillment of EO
Physical exports required but certain deemed exports allowed
Clubbing of licenses allowed

26. Advance authorization
Duty free import of inputs
Fuel, oil and energy are also allowed to be imported
SION norms
Ad hoc SION permitted
Positive value addition
Issued for annual requirement also

27. Advance authorization contd--
Advance release order/ Invalidation
Supplies to SEZ counted
Actual user condition
Disposal of imported items after meeting EO
License transferable after meeting EO and with the permission of DGFT

28. DEPB Duty free post export remission scheme SION norms
Ad hoc SION norms permitted
Schedule of rates
Can be used to pay for import duties
Transferable scrip
Scheme valid upto March 2009

29. SEZ Exclusive geography Duty free enclave Sales to DTA permitted
Special concessions for promoters
Positive EO is required
Customs duty, excise duty, service tax and VAT & CST are exempt on supplies to SEZ units

30. High Tech products promotion scheme
Appendix 37E goods
Duty free scrip equal to 10% incremental export growth
Ceiling of INR 150 million
Some exports not counted
Scrip freely transferable

31. Focus products scheme Goods notified in appendix 37D
Some exports not counted
Duty credit scrip equal to 1.25% of FOB value of exports for each year
Scrip transferable

32. Focus markets scheme Notified as per Appendix 37C
Duty credit scrip of 2.5% on the FOB value of exports achieved
Certain exports not allowed
Scrip transferable

33. Deemed Exports The concept of deemed exports
Covers supply of goods against:
Advance authorization/ DFIAS
EOU/ STP/EHTP/BTP
EPCG
Projects under International competitive bidding procedure

34. Deemed exports contd-----
Projects approved by ministry of finance
Supplies of capital stock to fertilizer plants
Supplies of goods to Refineries and power projects
Supplies of goods to UN- funded projects
Supplies of goods to Nuclear power projects thro competitive bidding

35. Benefits to deemed exports
Advance authorization / DFIAS
Deemed duty drawback
Exemption from terminal excise duty if supplies are against International competitive bidding
In other cases refund of terminal excise duty paid will be given

36. Served from India scheme
To promote served from India image
Appendix 10
Minimum previous year exports of INR1 million
10% duty credit scrip
Scrip transferable within corporate group and not otherwise

37. Status Holders under the FTP
Export House Rs 20 crores
Star export House Rs 100 crores
Trading House Rs crores
Star Trading House Rs crores
Premier Trading House Rs crores
Benefits allowed to status holders

38. Excise export concessions
Export without payment of duty
Export under claim for duty
Procurement of excisable goods for export production without payment of duty
Drawback
Concessional notifications

39. Service tax concessions
Drawback
Its limitations
ASTR 1
ASTR 2
Clearances to SEZ exempt
Refund of service tax paid on export related input services

40. WTO/ GATT International Treaty Governing Principles MFN
Non discrimination
National treatment
Reduction of tariffs
Elimination of Non tariff barriers

41. Free Trade Agreements NAFTA EU MECOSUR ASEAN SAFTA
Indian agreements with Sri Lanka, Thailand and Singapore
Implications of FTAs

42. Importance of Ports in International Trade
70% of international trade is over the seas
For India, it is 90%
Trade through Air is comparatively very expensive and cannot become a common preference, and is unsuited for heavy, large cargo
Many coastal states possess a number of ports

43. Ports in India India has 12 major ports and more than 180 lesser ones
India has a coastline of nearly 6000 KMs
All ports of India together handled 519 million tons of cargo during the fiscal year ended March 2008
Growth rate of 12%

44. Problems of Indian Ports
Limited land area
Industries located in hinterland
Low channel draft
Too many players
Inadequate deployment of skill and technology
Lack of coordinated approach

45. Requirements of modern World class port
Skill – Intensive
Technology driven, minimal paper work
Port is the best when its an industrial complex by itself
Quay cranes
Crane productivity
Fully automated terminals with good quay length

46. Port stake holders in India
Customs
Port Trusts
Port Health Organization
Plant Quarantine
Immigration
Terminal operator
Vessel operating agent

47. continued Steamer agent / Mainline operator
Container operating agent ( NVOCC, VOCC )
Stevedore
CHA / Exporters / Importers
Transport operators
CFS / ICD
Security agencies / External players

48. A comparison Factor JNPT SINGAPORE PORT Terminals 3 4 Vessels per
Quay length m ,754 m
Total area ha ha

49. continued Factor JNPT SINGAPORE Total no of quay cranes 8 131
Crane moves
per hour –
Crane rate per hour

50. continued
All Indian ports in together handled cargo of million tons
Singapore port in the same period handled 423 million tons of cargo
Transaction costs at Indian ports are 10 %
Transaction costs in leading ports are 6 %
The transaction costs at Indian ports are in money terms - $ 12 billion per annum

51. Dwell time at Indian ports as on 2005 - 06
Cargo type As on expected
export import exp imp
Dry bulk
Break Bulk
Containers