Foreign Trade Policy 2009-2014, Highlights

Higher Support for Market and Product Diversification
 Incentive schemes have been expanded by way of addition of new products and markets.
 New markets have been added under Focus Market Scheme. The incentive available under Focus Market Scheme (FMS) has been raised from 2.5% to 3%.
 The incentive available under Focus Product Scheme (FPS) has been raised from 1.25% to 2%.
 A large number of products from various sectors have been included for benefits under FPS.
 Market Linked Focus Product Scheme (MLFPS) has been greatly expanded by inclusion of products. MLFPS benefits also extended for export to additional new markets for certain products. These products include auto components, motor cars, bicycle and its parts, and apparels.
 Higher allocation for Market Development Assistance (MDA) and Market Access Initiative (MAI) schemes is being provided.
EPCG Scheme (Export Promotion Capital Goods Scheme)
 To aid technological upgradation of our export sector, EPCG Scheme at Zero Duty has been introduced.
 To increase the life of existing plant and machinery, export obligation on import of spares, moulds etc. under EPCG Scheme has been reduced to 50% of the normal specific export obligation.
 Taking into account the decline in exports, the facility of Re-fixation of Annual Average Export Obligation for a particular financial year in which there is decline in exports from the country, has been extended for the 5 year Policy period 2009-14.
Stability/ continuity of the Foreign Trade Policy
 To impart stability to the Policy regime, Duty Entitlement Passbook (DEPB) Scheme is extended beyond 31-12- 2009 till 31.12.2010.
 Interest subvention of 2% for pre-shipment credit for 7 specified sectors has been extended till 31.3.2010 in the Budget 2009-10.
 Income Tax exemption to 100% EOUs and to STPI units under Section 10B and 10A of Income Tax Act, has been extended for the financial year 2010-11 in the Budget 2009-10.
 The adjustment assistance scheme initiated in December, 2008 to provide enhanced ECGC cover at 95%, to the adversely affected sectors, is continued till March, 2010.
Marine Sector
 Fisheries have been included in the sectors which are exempted from maintenance of average EO under EPCG Scheme
 Additional flexibility under Target Plus Scheme (TPS) / Duty Free Certificate of Entitlement (DFCE) Scheme for Status Holders has been given to Marine sector.
Pharmaceutical Sector
 Export Obligation Period for advance authorizations issued with 6-APA as input has been increased from the existing 6 months to 36 months, as is available for other products.
 Pharma sector extensively covered under MLFPS for countries in Africa and Latin America; some countries in Oceania and Far East.
EOUs
 EOUs have been allowed to sell products manufactured by them in DTA upto a limit of 90% instead of existing 75%, without changing the criteria of ‘similar goods’, within the overall entitlement of 50% for DTA sale.
 To provide clarity to the customs field formations, DOR shall issue a clarification to enable procurement of spares beyond 5% by granite sector EOUs.
 EOUs will now be allowed to procure finished goods for consolidation along with their manufactured goods, subject to certain safeguards.
 During this period of downturn, Board of Approvals (BOA) to consider, extension of block period by one year for calculation of Net Foreign Exchange earnings of EOUs.
 EOUs will now be allowed CENVAT Credit facility for the component of SAD and Education Cess on DTA sale.
DEPB (Duty Entitlement Pass Book Scheme)
 DEPB rate shall also include factoring of custom duty component on fuel where fuel is allowed as a consumable in Standard Input-Output Norms.
Flexibility provided to exporters
 Payment of customs duty for Export Obligation (EO) shortfall under Advance Authorisation / Duty Free Import Authorisation (DFIA) / Export Promotion Capital Goods Scheme (EPCG) Authorisation has been allowed by way of debit of Duty Credit scrips. Earlier the payment was allowed in cash only.
 Import of restricted items, as replenishment, shall now be allowed against transferred DFIAs, in line with the erstwhile DFRC scheme.