The Indian Ministry of Commerce recently published an updated draft export policy. This is a product-specific guide that incorporates all the current policy conditions, public notices, and notifications issued post-January 2018. This comprehensive document also integrates non-tariff rules enforced by various government bodies. The primary aim of this draft export policy is to merge export rules for each product, assigning them individual eight-digit HS codes. It’s a crucial tool that will help exporters understand the regulations tied to their specific products.
Understanding ITC and HS Codes
ITC (HS) codes, or Indian Trade Clarification codes, are based on the Harmonized System (HS) of coding. These codes were incorporated into the Indian import-export operations to meet the country’s unique trade requirements. The Indian custom uses an eight-digit code system to suit local trade demands. These ITC-HS codes are categorized into two schedules. Schedule I outlines rules and exim guidelines concerning import policies, whereas Export Policy Schedule II describes the rules and regulations related to export policies.
About India’s Export-Import Policy
The Export-Import (Exim) Policy or Foreign Trade Policy in India is essentially a set of rules and instructions put forth by the DGFT (Directorate General of Foreign Trade) regarding the import and export of goods. The nation’s foreign trade is guided and regulated by the Exim Policy under the Foreign Trade Development and Regulation Act, 1992. The principal goal of the Foreign Trade (Development and Regulation) Act is to develop and regulate foreign trade, facilitate imports, and increase exports.
A Glance at the Objectives of the Exim Policy
The Exim policy or Foreign Trade Policy for 2015-20 has ambitious aims, including doubling overseas sales to $900 billion by 2019-20, integrating foreign trade with the “Make in India” and “Digital India Programs”, and promoting India on a global stage.
Key Features of the Export Policy
The MEIS scheme is one of the central features of the updated export policy. Five schemes for merchandize export promotion have been consolidated into one Merchandise Exports from India Scheme (MEIS). The MEIS and SEIS schemes apply to SEZ units, promoting paperless trade and online form filling for increased trade facilitation and ease of doing business. Additionally, the policy applies to e-commerce exports worth up to 25,000 and offers provisions for export-oriented units and technology parks.
| Policy | Purpose |
|---|---|
| MEIS scheme | Consolidation of five merchandize export promotion schemes into one |
| SEIS | Applicable only for India based service providers, based on net foreign exchange earned |
| Paperless Trade and Online Forms | To ensure trade facilitation by simplifying processes |
| E-commerce export regulation | Applies to items worth upto 25,000 |
Scrips: Another Pillar of Indian EXIM Policy
Another remarkable feature of the Indian Exim Policy is the provision of Duty-free scrips, a form of credit issued to exporters under various government export promotion schemes. Depending on the scheme, these scrips may be transferable or non-transferable.
