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Indian Economy

Notes (ii) Supply of goods to EOU/STP/EHTP/BTP;
(iii) Supply of capital goods to EPCG Authorisation holders;
(iv) Supply of goods to projects financed by multilateral or bilateral Agencies/Funds as
informed by the Department of Economic Affairs (DEA), MoF under International
Competitive Bidding (ICB) consistent with procedures of those Agencies/Funds,
where legal agreements provide for tender evaluation without involving customs
duty; supply and installation of goods and equipment (single responsibility of
turnkey contracts) to projects financed by multilateral or bilateral Agencies/Funds
as informed by DEA, MoF under ICB, consistence with procedures of those Agencies/
Funds, which bids may have been invited and assessed on the basis of Delivered
Duty Paid (DDP) prices for goods manufactured overseas;
(v) Supply of capital goods, involving goods in unassembled/disassembled condition
as well as plants, accessories, machinery, tools, dies and such goods which are utilised
for installation purposes till the stage of commercial production, and spares to the
degree of 10% of FOR value to fertilizer plants;
(vi) Supply of goods to any project or purpose with relation to which the MoF, by a
notification, allows import of such goods at zero customs duty;
(vii) Supply of goods to power projects and refineries not included in the point above;
(viii) Supply of marine freight containers by 100% EOU (Domestic freight containers-
manufacturers) offered said containers are exported out of India within six months
or such extra period as allowed by customs;
(ix) Supply to projects financed by UN Agencies.

It is important to note that apart from all these, various concessions and exemptions were issued
during the nineties to liberalise imports and promote exports. Liberalisation also permitted FDI
in many sectors. Foreign companies are permitted to open branch offices, foreign technology
agreements were permitted, and the Foreign Investment Promotion Board (FIPB) was set up to
process and give speedy approvals for foreign investment proposals. Automatic approval was
permitted for technical collaboration and foreign equity participation till 51% in Indian
companies in 34% high priority industries.
In totality, we pursued a policy of globalisation after 1991 as far as foreign trade is involved.
This may appear like a threat to the domestic industry, but it only assisted Indian industry. Now,
domestic industry has to confront competition at an international level, which only enhances
their competitive position. It also permits them to import raw material and machines that
enhance the quality of their products and decrease the cost.
You must understand that due to the abolition of Phased Manufacturing Programme (PMP), the
domestic industry now doesn’t have to go for Indianisation. It decreases their cost and releases
the R&D budget for something new rather than investing on that which is accessible in the
international market at competitive prices.

Self Assessment

Fill in the blanks:
1. In the …………………… of development, India had to import capital equipment, machinery,
spare parts, industrial raw material, etc.

2. Till ……………………, there was no clear Exim policy and no import restrictions of any
kind.

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