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FOREIGN TRADE POLICY 2015-20SALIENT FEATURES & KEY CHANGES
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The Government has introduced Foreign Trade Policy 2015-20 (“FTP”) on April 1, 2015. The key changes in
FTP are summarized as under:
• Merchant Export of India Scheme (“MEIS”) and Service Export from India Scheme (“SEIS”) notified
• MEIS subsumes
• Focus Product Scheme
• Market Linked Focus Product Scheme
• Focus Market Scheme
• Agriculture Infrastructure Incentive Scrip
• VKGUY
• SEIS replaces and expands upon Served From India Scheme (“SFIS”) – applies to service providers located
in India as opposed to Indian service providers
Introduction and Overview of Foreign Trade Policy 2015-20
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Category Type Countries Example
Countries in group A Traditional markets 30 Europian Union, USA,
Canada
Countries in group B Emerging markets & Focus
markets
139 Africa, Latin America and
Mexico, Turkey and West
Asian countries
Countries in group C Other Markets 70 Australia, New Zealand,
Antarctica etc.
For the purpose of MEIS three country groups have been formulated
Introduction and Overview of Foreign Trade Policy 2015-20
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• SEZ units will be entitled to the benefits of MEIS and SEIS
• Higher level of rewards under MEIS export with high domestic content and value addition
• Introduction of digital and online filing of documents/applications and paperless trade in 24x7
environment.
• Export obligation period for goods related to Defence and Aerospace has been extended from eighteen
months to twenty four months
• e-Commerce Exports: Benefits of foreign trade policy on export of good, notified under Appendix 3-C
having FOB value upto INR 25,000 per consignment.
Introduction and Overview of Foreign Trade Policy 2015-20
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• New initiatives for EOUs, EHTPs and STPs:
• They can share infrastructure facilities
• Inter-unit transfer of goods has been allowed
• EOU’s have been allowed to set up warehouse near port of export
• Duty free import of goods and equipments required for training purposes
• In an endeavour to resolve quality complaints and trade disputes, chapter on Quality Complaints and
Trade Disputes has been incorporated
• For speedy resolution of disputes, a committee on Quality Complaints and Trade Disputes is being
constituted
• Eligibility criteria for “Status Holder” revised. Other privileges granted are:
• Authorization and Customs clearances on self declaration basis
• Exemption from furnishing of bank guarantee for schemes under FTP
• Exemption from compulsory negotiation of documents through banks
• Preferential treatment and priority in handling of their consignments
Introduction and Overview of Foreign Trade Policy 2015-20
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• Duty Credit Scrips shall be granted as rewards under MEIS and SEIS.
• The Duty Credit Scrips and goods imported/domestically procured against them shall be freely
transferable
• Duty Credit Scrips can be used for the payment of Customs duty, Excise duty and Service tax
• In the MEIS scheme incentives in form of duty credit Scrips will be given as a percent of realized FOB
value of exports
• In SEIS incentive will be based on net foreign exchange earned. The list of services and the rates of
rewards would be reviewed after September 30, 2015
Rewards Under MEIS & SEIS
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Product Countries in group A Countries in group B Countries in group C
Inorganic Chemicals, Organic or Inorganic
Compounds
2-3 2-3 0
Polymers 2-3 2-3 0
petrol 2 2 0
Pharmaceutical 3 3 0
Textiles 0-5 0-5 (in certain cases advantage has
been extended only to Japan)
0-5
Edible oil 5 5 5
Iron and steel 0 2 0
Articles of iron and steel 2-3 2-3 0
Services Percentage rate
Business services 3 and 5
Communication services 5
Construction and related Engineering services 5
Educational services 5
Environmental services 5
Health-related and social services 5
Tourism and travel-related services 3 and 5
Recreational, cultural and sporting services (other than audiovisual
services)
5
Transport services 5
Percentage Rate specified under MEIS (Illustrative)
Percentage Rate specified under SEIS (Illustrative)
Rates specified under the MEIS and SEIS Schemes
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• The FTP has bifurcated the categories of supply eligible for the benefit of deemed exports, into:
• Manufacturers
• Main/sub contractors
• Benefit of deemed exports has been extended to United Nations, International Organizations and
Government of India approved International Organizations for their official and for the projects funded by
them
• Supply of goods to nuclear power projects where tender has been invited through NCB or ICB
• Input services will also be eligible for availing refund of deemed export drawback
• FTP also provides for imposition of an interest at the rate of 15 percent in case of defaults or violation of
the provisions of FTDR Act.
Deemed Exports
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• In case of indigenous procurement of capital goods the specific export obligation shall be 25 percent less
than the stipulated export obligation.
• The FTP has done away with the 3 percent concessional EPCG Scheme.
• The reduced export obligation incentive has been extended to the state of Jammu and Kashmir.
• Import under EPCG Authorization Scheme shall not be eligible for exemption from payment of anti-
dumping duty, safeguard duty and transitional product specific safeguard duty.
• The FTP has provided a uniform time limit of six years for fulfillment of export obligation under the
scheme
Export Promotion Capital Goods Scheme (EPCG)
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Advance Authorization and Duty Free Import Authorization
• The validity period for import of Advance Authorizations will be twelve months
• The scheme provides that the particulars of the input used (or to be used) in the Advance Authorization
must match exactly with the particulars endorsed in the shipping bill.
• The scheme provides a period of eighteen months for fulfilling the export obligation. In case of a turnkey
project in India (Only deemed export category) or abroad period shall be as specified under the contract
or eighteen months, whichever is higher
• Period of export obligation shall be twenty four months or the period specified in the contract (whichever
is higher) for items falling under defence, military store, aerospace and nuclear energy categories
Duty Free Import Authorization
• Imports under DFIA shall be exempted only from the payment of Basic Customs Duty. Additional customs
duty, being not exempt, shall be adjusted as CENVAT credit
• No DFIA shall be granted for cases where an “Actual User Condition” has been specified under the SION