Page 219 - DMGT547_INTERNATIONAL_MARKETING

International Marketing

Notes Following are few schemes of Foreign Trade Policy:
1. Foreign trade policy: The main attractions of the Foreign Trade Policy for 2013-14 include
extension of zero duty Export Promotion Capital Goods (EPCG) scheme that allows duty
free import of capital goods to all sectors, widening the interest subvention scheme for the
engineering and textiles sector, allowing use of duty credit scrip beyond duty free imports,
and permitting the transferability of status holder incentive scheme.
2. Operational flexibility: More operational flexibility was also given to Special Economic
Zones (SEZs) with the Government reducing the area requirement by half for all SEZs and
doing away with the minimum area requirement for IT SEZs.
3. Revenue outgo: It is, however, refused to make an estimate of the revenue outgo for the
schemes stating that it all depended on how much was exported by the qualifying sectors.
The extension of zero duty EPCG scheme to all sectors will promote the technology
intensity of exports. Textile exporters benefiting from the Technology Upgradation Funds
Scheme will also be allowed to avail themselves of the EPCG scheme.
The FTP did not extend any fiscal sop to the SEZ units, but it would now be much easier for
the zones to come up. The minimum area requirement for multi-product SEZs has come
down to 500 hectares from 1,000 hectares while sector-specific SEZs will be allowed to
come up in an area of 50 hectares, down from 100 hectares. There would be no minimum
land requirement for setting up IT/ITES SEZ and builders will have to meet only the
minimum built up area requirement.
4. Exit policy: An exit policy permitting transfer of ownership of SEZ units, including sale,
has also been introduced in the SEZ Framework. Moreover, sector-specific SEZs have been
allowed to bring in an additional sector for each contiguous (continuous) 50 hectare parcel
of land. This means that a sector-specific SEZ can go beyond its particular sector if it
manages to get more land.
5. Minimum alternate tax: SEZ developers and units are, however, disappointed that the
Government has not exempted them from minimum alternate tax (MAT). The SEZ units
have not been made eligible for the focus product and the focus market schemes are not
available to domestic exporters.
6. Interest subvention: While the discount rate of 2 per cent was not enhanced in the interest
subvention scheme, the Government has extended the scheme up to March 31, 2014 and
included 134 sub-sectors of engineering in addition to handicrafts, handlooms, carpets,
garments, processed food, sports goods and toys. Small and medium enterprise sector,
too, would continue to get the benefit.
7. Focus market scheme: Norway has been added as a new market under the Focus Market
Scheme, which gives exporters a 2 per cent duty credit (that can be transferred for money)
taking the total number of markets to 125.
Exports to Venezuela will now be eligible for the Special Focus Market Scheme that allows a
duty credit of 4 per cent taking the number of such markets to 50.

As many as 47 new items have been added to the Market Linked Focus Product Scheme and the
benefits for exporting textile to the EU and the US have been extended by another year.

Apartfrom the above schemes, there are other Export Policy Incentive Schemes which can be
categorized as following:
Advance Authorisation Scheme: The Advance Authorisations are issued to allow duty free
import of inputs, which are physically incorporated in the export product (after making normal

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