In the ever-evolving landscape of international trade, India’s EXIM Policy stands as a key to the kingdom, opening doors to vast opportunities and economic growth. Imagine a world where a country’s trade rules are not just a list of do’s and don’ts but a strategic roadmap, designed to boost exports, foster economic resilience, and deepen global ties.
That’s precisely what the Export-Import (EXIM) Policy of India is all about.
In this blog, we embark on a journey to demystify this powerful policy. We’ll uncover its meaning, explore its objectives, delve into its functions, decipher its unique features, and reveal the myriad benefits it brings to India’s dynamic trade landscape.
So, fasten your seatbelts and get ready to unravel the secrets of India’s EXIM Policy.
Also Read: How EXIM policies have evolved in the last 75 years in India
What is EXIM Policy?
An EXIM policy is a government plan that helps a country with its international trade. It includes rules and benefits for things like exporting and importing goods. These policies are made to make trade easier, boost the economy, and protect a country’s interests.
The exact rules can be different from one country to another, and they might change over time to match what’s happening in the world.
EXIM stands for “Export-Import”
The EXIM Policy, also called the Foreign Trade Policy (FTP), is managed under the Foreign Trade Development and Regulation Act of 1992. In India, the Directorate General of Foreign Trade (DGFT) is in charge of overseeing the EXIM Policy.
You Must Know!
In 2004, the EXIM Policy got a new name, becoming the Foreign Trade Policy. This change aimed to take a more complete approach to foreign trade in India.
The Ministry of Commerce recently introduced the latest FTP, which started on April 1, 2023. The FTP for 2023-2028 has a big goal: to turn India into a major export center and better connect it with the worldwide supply chain.
It sets up a supportive environment for exporters, all in line with India’s vision of being self-reliant, often called ‘Atmanirbhar’.
How India’s Trade Rules Get Updated?
The Ministry of Finance works with the DGFT and the Union Minister of Commerce and Industry to make changes to India’s EXIM Policy. They announce these updates with the help of DGFT’s regional offices.
What are the Objectives of EXIM Policy of India?
The Export-Import (EXIM) Policy of India has several objectives aimed at promoting and regulating international trade. Here are 20 key objectives:
- Promoting Export Growth: To stimulate and increase India’s exports of goods and services.
- Enhancing Foreign Exchange Earnings: To earn foreign currency and strengthen India’s balance of payments.
- Diversifying Exports: To expand the range of exportable products and services.
- Facilitating Market Access: To provide easier access to international markets for Indian exporters.
- Encouraging High-Value Exports: To focus on high-value and technologically advanced products and services.
- Promoting Trade with Emerging Markets: To boost trade with emerging economies and reduce dependency on traditional markets.
- Supporting Small and Medium Enterprises (SMEs): To assist small and medium-sized enterprises in becoming competitive exporters.
- Strengthening Infrastructure: To improve transportation, logistics, and export-related infrastructure.
- Simplifying Trade Procedures: To reduce bureaucracy and streamline export-import processes.
- Providing Export Incentives: To offer financial incentives, tax benefits, and subsidies to exporters.
- Ensuring Product Quality and Standards: To maintain and enhance the quality of export products.
- Promoting Research and Development: To encourage innovation and technological advancement in exports.
- Encouraging Foreign Direct Investment (FDI): To attract foreign investment in export-oriented industries.
- Supporting Agri-Exports: To boost agricultural and processed food exports.
- Fostering Trade Relations: To strengthen diplomatic and trade ties with other countries.
- Promoting E-commerce Exports: To facilitate online trade and e-commerce exports.
- Ensuring Sustainability: To encourage eco-friendly and sustainable trade practices.
- Facilitating Import of Essential Goods: To ensure the availability of critical imports for the domestic market.
- Expanding Service Exports: To increase exports in sectors like IT, tourism, and healthcare services.
- Achieving Global Competitiveness: To make Indian industries competitive on a global scale and position India as a significant player in international trade.
Key Features of India’s EXIM Policy 2023-2028
India’s EXIM Policy for the period from April 1, 2023, to March 31, 2028, brings a host of exciting changes to boost exports and enhance the trade ecosystem.
1. Process Re-Engineering and Automation
The EXIM Policy is like having a tech-savvy assistant to help with exporting goods. It’s all about simplifying the process and making it more efficient. Think of it as working together and using smart tools to get things done faster.
This way, it reduces the hassles for exporters and creates a system that’s easy for everyone to use. It’s like a win-win for trade!
2. Towns of Export Excellence
In this update, four new towns are welcomed into the existing group of 39 “Towns of Export Excellence” under the EXIM Policy. These towns are recognized for their special skills in creating handicrafts, handlooms, and carpets. Being part of this group comes with great perks.
They get first dibs on funds and support for promoting their exports. It’s like shining a spotlight on the incredible talent these towns have, giving them extra support to make their products known worldwide. It’s a way of celebrating and boosting local skills and creativity.
3. Recognition of Exporters
Recognizing exporters involves categorizing them into different levels based on their compliance and performance in international trade. Recognized exporter firms receive privileges, such as streamlined customs procedures, while two-star and higher status holders, who exhibit exceptional performance, provide trade-related training.
These training programs are developed using a model curriculum and aim to enhance the skills and knowledge of other exporters. In addition, recognized exporters often participate in capacity-building initiatives to further strengthen their ability to engage in global trade successfully. This multi-tiered approach promotes growth and competence in the export sector.
4. Promoting Exports from Districts
This policy wants to help small businesses in different areas or districts sell their products to other countries. It does this by working together with the governments of those states.
The idea is to make it easier for local businesses to find opportunities to export their goods and get support to do it. This way, each district can focus on what they are good at and sell those things to the world, which helps the country make more money from exports.
5. Streamlining SCOMET Policy
The aim is to make the SCOMET Policy more accessible and improve how we control the export of special chemicals, organisms, materials, equipment, and technologies. We want more people to know about SCOMET and understand it better.
We also want to make the rules for exporting these things stronger. This helps in ensuring that sensitive items don’t end up in the wrong hands and are used responsibly. By streamlining this policy, we make it simpler and more effective in protecting national security.
6. Facilitating e-Commerce Exports
This plan focuses on making it easier for businesses to sell things online to customers in other countries. It involves creating a clear plan for e-commerce hubs, which are like online marketplaces. It also covers how businesses should keep track of their finances, handle returned items, and make sure they get paid correctly.
Plus, it outlines the rules for businesses to sell products abroad. By doing this, it helps businesses navigate the complexities of online international trade more smoothly, encouraging e-commerce exports.
7. Rationalization of EPCG Scheme
The plan involves simplifying the EPCG (Export Promotion Capital Goods) scheme, making it easier for businesses. This scheme allows companies to import machinery and equipment at a lower duty, which they use for producing goods for export.
The proposed changes will make the scheme more straightforward and practical. Additionally, the introduction of PM MITRA (Project Management and Information Tracking Analysis) for the CSP (Common Service Provider) scheme will help businesses claim benefits more efficiently, encouraging trade facilitation and smoother operations for companies involved in the CSP scheme.
8. Dairy Sector Exemption
In simple terms, the dairy sector doesn’t have to meet a specific average export target, which is a requirement for other sectors. This means dairy businesses can focus on their domestic market without worrying about exporting a certain amount.
Additionally, if a company deals with eco-friendly or “green” technology products, they will have to export less to meet their obligations. These exemptions and reduced requirements aim to support the dairy industry and environmentally friendly technology businesses, making it easier for them to do business.
9. Advance Authorisation Scheme
The Advance Authorisation scheme is like a special permission for businesses. It allows them to import raw materials for making products without paying taxes on them. The new plan aims to make this process even simpler and more helpful for businesses.
It will provide extra support and easier rules for getting this permission. This way, companies can bring in the materials they need without extra costs, making it easier for them to manufacture goods and do business.
10. Merchanting Trade
Merchanting trade means buying and selling goods without actually bringing them into your own country. The new plan says that Indian entrepreneurs can now engage in this type of trade even for items that are usually not allowed or have restrictions.
But they must follow the guidelines set by the Reserve Bank of India (RBI). This decision opens up opportunities for Indian entrepreneurs to do more business internationally, expanding their options and markets without dealing with the physical import and export of goods.
11. Amnesty Scheme
The Amnesty scheme is a special opportunity for businesses that have not met their export obligations as required. This plan offers them a chance to rectify these defaults in a one-time effort. The scheme limits the amount of interest a business has to pay to 100% of the exempted duties.
This way, it helps companies correct their past mistakes without facing excessively high financial penalties, encouraging compliance with export obligations and supporting businesses to get back on track.
Benefits of EXIM Policy
Here are ten key advantages of EXIM (Export-Import) Policy:
- Promotes international trade.
- Boosts the country’s economy.
- Encourages foreign investment.
- Fosters job creation.
- Facilitates technology transfer.
- Enhances export competitiveness.
- Supports diverse industry sectors.
- Attracts foreign exchange earnings.
- Provides market access for Indian goods.
- Promotes sustainable growth.
About EXIM Bank Of India
The Export-Import Bank of India, commonly known as EXIM Bank, is a specialized financial institution established by the Indian government in 1982. It primarily focuses on promoting and facilitating international trade and investment. Here are some key points about EXIM Bank of India:
Mission: EXIM Bank’s mission is to be a catalyst for the growth of Indian businesses by providing financial and strategic support for their global expansion.
Functions: The bank offers a range of financial services to Indian exporters and importers, including export credit, import finance, project finance, and export-related advisory services.
Export Credit: EXIM Bank provides export credit in the form of term loans, working capital finance, and export credit insurance to Indian exporters.
Project Finance: It supports Indian companies’ overseas projects by providing project finance and advisory services for infrastructure and other development projects.
Global Presence: The bank has a global presence with offices and representative branches in various countries to facilitate international trade and investment.
Government Support: EXIM Bank receives financial support and guarantees from the Indian government, which allows it to provide financial assistance on concessional terms.
Export Promotion: The bank plays a crucial role in supporting the Indian government’s initiatives to boost exports and achieve a higher share in global trade.
Research and Analysis: It conducts research and analysis related to international trade, providing valuable insights and data to businesses and policymakers.
Trade Facilitation: EXIM Bank collaborates with various organizations to promote trade, including partnerships with international financial institutions and export credit agencies.
Sustainability: The bank also focuses on promoting sustainable development and environmentally friendly projects as part of its initiatives.
Overall, EXIM Bank of India plays a vital role in supporting the country’s international trade and economic growth, helping Indian businesses expand their global footprint.
Credlix is a digital supply chain finance platform, a company that operates in the manufacturing supply chain sector. Credlix specializes in providing fast and collateral-free working capital solutions to various stakeholders, including enterprises, suppliers, and exporters operating in India and South East Asia.
Our primary aim is to facilitate these businesses’ access to the necessary financial resources to seize opportunities within the global manufacturing supply chain. This kind of service can be beneficial in promoting and streamlining international trade activities in the region.
Final Words
In conclusion, India’s EXIM Policy is like a guidebook for trade, helping businesses export and import goods. It’s all about making trade easier and boosting the country’s economy. The latest policy aims to simplify processes, support local talent, and encourage more businesses to go global. It also provides exemptions and benefits for various sectors, from dairy to technology.
Additionally, with initiatives like Credlix, it’s becoming even easier for businesses to access working capital and thrive in international trade. These efforts align with India’s vision of self-reliance and global competitiveness. So, with the EXIM Policy and innovative platforms like Credlix, India is well on its way to becoming a significant player in the world of international trade.
