Page 274 - DMGT546_INTERNATIONAL_TRADE_PROCEDURE_AND_DOCUMENTATION

Unit 12: Export Incentives Schemes

each phase of the elimination of QRs. Now, all items except those for which QRs are still Notes
operative (numbering around 800) can be imported under DEPB.
Duty-free imports are more detrimental compared to imports under OGL from the angle
of the domestic producers. Under a fully WTO-compatible trade regime (which India has
committed to design), the only weapon available in normal circumstances to check imports
which are injurious to the domestic industry is the flexibility in the fixation of customs
duty subject to the committed bound rates. But as import under the export-linked schemes
are duty-free, surge in such imports cannot be arrested through the tariff rate mechanism.
Hence, it is necessary to rationalise the duty exemption and remission schemes so as to
control duty-free import of sensitive and vulnerable items. As imports under the duty
exemption and remission schemes are not related to the bound rates committed under
Article II of the GATT 1994, GOI has the liberty to restrict the number of items and quantity
imported through the duty-free channels. Otherwise, a surge in duty-free imports of
sensitive and vulnerable ‘products may signal transfer of in-vestible resources from the
respective sectors of the economy leading to eventual dependence on external sources.
Moreover, the potential repercussions of the perceived trend may lead to hardship for
small and marginal farmers and gradual collapse of inputs and intermediate products
manufacturing segments of the industry in the long run. Therefore, relevant provisions
have to be clearly spelt out in the new EXIM policy empowering the government to
control duty-free import of vulnerable items through duty exemption and remission
schemes at times of emergency. In the absence of such relevant provisions, GOI will have
serious constraints in countering the serge in imports of sensitive products through duty-
free channels.
Question:

What do you understand by Duty-free replenishment certificate scheme? Discuss the scheme
in detail.
Source: http://wtocentre.iift.ac.in/DOC/Duty%20Exemption%20and%20Remission%20Scheme.pdf

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