Exim Policy 2002-07: Highlights
I- Special Economic Zones (SEZs)
Offshore Banking Units (OBUs) shall be permitted in SEZs. Detailed guidelines are being worked out by RBI. This should help some of our cities emerge as financial nerve centres of Asia.
Units in SEZ would be permitted to undertake hedging of commodity price risks, provided such transactions are undertaken by the units on stand-alone basis. This will impart security to the returns of the unit.
It has also been decided to permit External Commercial Borrowings (ECBs) for a tenure of less than three years in SEZs. The detailed guidelines will be worked out by RBI. This will provide opportunities for accessing working capital loan for these units at internationally competitive rates.
II- Employment oriented
Export restrictions like registration and packaging requirement are being removed today on Butter, Wheat and Wheat products, Coarse Grains, Groundnut Oil and Cashew to Russia . Quantitative and packaging restrictions on wheat and its products, Butter, Pulses, grain and flour of Barley, Maize, Bajra, Ragi and Jowar have already been removed on 5th March, 2002.
Restrictions on export of all cultivated (other than wild) varieties of seed, except Jute and Onion, removed.
To promote export of agro and agro based products, 20 Agri export zones have been notified.
In order to promote diversification of agriculture, transport subsidy shall be available for export of fruits, vegetables, floriculture, poultry and dairy products. The details shall be worked out in three months.
3% special DEPB rate for primary & processed foods exported in retail packaging of 1 kg or less.
b) Cottage Sector and Handicrafts
An amount of Rs. 5 crore under Market Access Initiative (MAI) has been earmarked for promoting cottage sector exports coming under the KVIC.
The units in the handicrafts sector can also access funds from MAI scheme for development of website for virtual exhibition of their product.
Under the Export Promotion Capital Goods (EPCG) scheme, these units will not be required to maintain average level of exports, while calculating the Export Obligation.
These units shall be entitled to the benefit of Export House status on achieving lower average export performance of Rs.5 crore as against Rs. 15 crore for others; and
The units in handicraft sector shall be entitled to duty free imports of an enlarged list of items as embellishments upto 3% of FOB value of their exports.
c) Small Scale Industry
With a view to encouraging further development of centres of economic and export excellence such as Tirupur for hosiery, woollen blanket in Panipat, woollen knitwear in Ludhiana, following benefits shall be available to small scale sector:
Common service providers in these areas shall be entitled for facility of EPCG scheme.
The recognised associations of units in these areas will be able to access the funds under the Market Access Initiative scheme for creating focused technological services and marketing abroad.
Such areas will receive priority for assistance for identified critical infrastructure gaps from the scheme on Central Assistance to States.
Entitlement for Export House status at Rs. 5 crore instead of Rs. 15 crore for others.
Duty free imports of trimmings and embellishments upto 3% of the FOB value hitherto confined to leather garments extended to all leather products.
Sample fabrics permitted duty free within the 3% limit for trimmings and embellishments.
10% variation in GSM be allowed for fabrics under Advance Licence.
Additional items such as zip fasteners, inlay cards, eyelets, rivets, eyes, toggles, velcro tape, cord and cord stopper included in input output norms.
Duty Entitlement Passbook (DEPB) rates for all kinds of blended fabrics permitted. Such blended fabrics to have the lowest rate as applicable to different constituent fabrics.
f) Gem & Jewellery
Customs duty on import of rough diamonds is being reduced to 0%. Import of rough diamonds is already freely allowed. Licensing regime for rough diamond is being abolished. This should help the country emerge as a major international centre for diamonds.
Value addition norms for export of plain jewellery reduced from 10% to 7%. Export of all mechanised unstudded jewellery allowed at a value addition of 3 % only. Having already achieved leadership position in diamonds, now efforts will be made for achieving quantum jump on jewellery exports as well.
Personal carriage of jewellery allowed through Hyderabad and Jaipur airport as well.
(III) Technology oriented
a) Electronic hardware
The Electronic Hardware Technology Park (EHTP) scheme is being modified to enable the sector to face the zero duty regime under ITA(Information Technology Agreement)-1. The units shall be entitled to following facility:
Net Foreign Exchange as a Percentage of Exports (NFEP) positive in 5 years.
No other export obligation for units in EHTP.
Supplies of ITA I items having zero duty in the domestic market to be eligible for counting of export obligation.
b) Chemicals and Pharmaceuticals
All pesticides formulations to have 65% of DEPB rate of such pesticides.
Free export of samples without any limit.
Reimbursement of 50% of registration fees for registration of drugs.
Free import of equipment and other goods used abroad for more than one year.
Click for Page 2 of Exim Policy 2002-07: Highlights