With a view to providing remunerative returns to the farming community in a sustained manner, efforts will be made to provide improved access to the produce/ products of the Agriculture and Allied sectors in the international market.

State Governments may identify product specific Agri export zone for end to end development for export of specific products from a geographically contiguous area. State Government may evolve a comprehensive package of services provided by all State Government Agencies, State Agricultural Universities and all institutions and agencies of the Union Government for intensive delivery in these zones.

Such services would include provision of pre/ post harvest treatment and operations, plant protection, processing, packaging, storage and related research & development, etc. Department of Commerce will supplement, within its schemes and provisions, efforts of State Governments for facilitating such exports.

The service providers; setting up common infrastructural facilities such as sorting, grading, polishing, packaging, cold storage, transport equipment/ refrigerated vans, vapour treatment heat treatment plant, X-ray screening facility etc. shall be entitled for EPCG Scheme.

Agri exporters shall be entitled for recognition as Export House/Trading House/Star Trading House/Super Star Trading House on achieving 1/3rd of the threshold limit prescribed for exporters of goods.

2. MARKET ACCESS INITIATIVE (MAI)

The Government would assist the industry in research & development, market research, specific market and product studies, warehousing and retail marketing infrastructure in select countries and direct market promotion activities through media advertising and buyer seller meets. A plan scheme has been evolved for this purpose.

3. SPECIAL ECONOMIC ZONES

� A new Chapter on Special Economic Zones introduced.

� Special Economic Zones developers are allowed duty free import/ procurement from DTA for development of SEZ to give a boost for development of integrated infrastructure for exports.

� Duty free import/procurement from DTA of goods for setting up of factory in the Zone permitted.

� Items reserved for SSI do not require any licence for setting up units in SEZ.

� Units in SEZ can bring back their export proceeds in 365 days as against normal period of 180 days and can retain 100% of the proceeds in the EEFC account.

� Special Economic Zones trading units permitted to sell goods in the DTA in accordance with the import policy in force.

� Subcontracting of part of production abroad permitted.

� To facilitate greater flexibility and to attract capital intensive units into Special Economic Zones, amortization of value of imported Capital Goods is being spread over a period of 8 years instead of 5 years at present.

� SEZ developer given infrastructure status under Income Tax Act as provided in the Finance Bill, 2001.

4. REMOVAL OF QRs.

� The process of removal of import restrictions, which began in 1991, has been completed in a phased manner this year with removal of restrictions on 715 items. Out of these 715, 342 are textile products, 147 are agricultural products including alcoholic beverages and 226 are other manufactured products including automobiles.

� Import of agricultural products like wheat, rice, maize, other coarse cereals, copra and coconut oil has been placed in the category of State Trading. The nominated State Trading Enterprise will conduct the imports of these commodities solely as per commercial considerations. Similarly, import of petroleum products including petrol, diesel and ATF has also been placed in the category of State Trading. Import of urea will also be done through the mechanism of State Trading.

� Care has been taken to ensure a level playing field to domestic producers vis-�-vis imports. In conformity with the “National Treatment Principle” of GATT, imports have also been made subject to the following domestic regulations:

(i)
Import of all food products will be subject to compliance of all the provisions of Food Adulteration Act and Rules thereunder;

(ii)
Import of meat and poultry products will be subject to compliance of all the provisions of Meat Food Product Order;

(iii)
Import Tea Waste will be subject to compliance of Tea Waste (Control Order);

(iv)
No import of textile material using the prohibited dyes like azo dye shall be allowed. For this purpose, a pre-shipment inspection certificate has been made mandatory.

� In view of road safety and environment considerations, imports of second hand automobiles have been allowed subject to the following conditions:

(i)
Import of autombiles older than three years is not allowed;

(ii)
Imported vehicles need to conform to Central Motor Vehicle Rules;

(iii)
Import of left hand drive vehicles not allowed;

(iv)
For ensuring the requirements, preshipment as well as post shipment certification made mandatory;

(v)
Imported automobiles to have a minimum residual life of five years and the importer to ensure supply of spares and service during this period; and

(vi)
Such imports allowed only through customs port at Mumbai.

Similarly, import of new automobiles allowed subject to following conditions:

(i)
Import allowed only from the country of manufacture;

(ii)
Import of left hand drive vehicles not allowed;

(iii)
Imported vehicles to conform to the provisions of Motor Vehicles Act, 1988;

(iv)
Prototype of vehicle to be approved by notified agencies in India; and

� To ensure that import of agricultural products do not lead to unwanted infiltration of exotic diseases and pests in the country, it has been decided to subject import of primary products of plant and animal origin to ‘Bio Security & Sanitary and Phyto-Sanitary Permit’ to be issued by Deptt. of Agriculture and Cooperation. This permit will be based on Import Risk Analysis of the product to be conducted on scientific principles, in accordance with the WTO agreement on Application of Sanitary and Phyto-Sanitary Measures.

5. EXPORT PROMOTION CAPITAL GOODS SCHEME

� Imports of jigs, fixtures, dies, moulds to be allowed for the full CIF value of the licence instead of restricting to 20% of the CIF value of licence.

� Time limit of 180 days prescribed for finalisation of nexus by EPCG Committee failing which the nexus applied by the applicant becomes final.

� Extension in export obligation period under EPCG for licences issued during 1990-1996 upto 31.3.2002 upon execution of Bank Guarantee with the licensing authority.

� Extension in export obligation period for two years in respect of EPCG issued under Customs notification 29/1997 dated 1.4.97 and 49/2000 dated 27.4.2000.

� No penalty for valuewise shortfall under EPCG except for the customs duty together with interest.

� Facility for partial fulfilment extended under EPCG scheme to reduce transaction time.

� For redemption, the licence holder has been extended the facility to submit either a consolidated statement signed by all banks or separate statements signed by individual banks.

6. ANNUAL ADVANCE LICENCE

� Extension of Annual Advance Licence facility for deemed exports and intermediate supplies.

� The entitlement for Annual Advance Licence increased from 125% to 200% of the FOB value of preceding year exports.

� Extension of Annual Advance Licence to other than Standard Input Output Norms exports.

� Clubbing facility for Annual Advance Licence.

� Dispensing with the need of technical characteristics for inputs except for items in the sensitive list.

7. ADVANCE LICENCE

� Duty free import/procurement of fuel allowed under Standard Input Output Norms for sectors where the same cost more than 10% of the manufacturing cost.

� The facility of Advance Licences extended even to the cases where some of the inputs are supplied free of cost by the buyer.

� The entitlement for Advance Licence where SION does not exist increased from 100% to 200% of the FOB value of preceding year exports for Export House/Trading House/Star trading House/Super Star Trading House.

� Additional facility for Advance Licence where SION does not exist beyond entitlement as well against execution of Bank Guarantee.

� Dispensing with the need of technical characteristics for inputs except for items in the sensitive list.

� The facility of back to back LC for Advance Licence, which is presently confined to one bank and one branch, extended to cover any bank and branch.

� Revalidation of expired Advance Licences, where export obligation has been completed, by six months.

� 506 new Standard Input Output Norms fixed during 2000-01.

� No penalty for valuewise shortfall under Advance Licence except for the Customs duty together with interest provided the licence holder has achieved positive/minimum value addition.

� Coverage of additional ports under Advance Licence

� Simplification of form relating to Advance Licence on SION.

8. DUTY FREE REPLENISHMENT CERTIFICATE SCHEME

� Validity of DFRC to be extended from 12 months to 18 months.

� Dispensing with the need of technical characteristics for inputs except for items in the sensitive list.

� Automatic calculation of CIF value under DFRC scheme without reference to international price of individual inputs.

� Provision incorporated for claim of DFRC against advance payment.

� Coverage of additional ports under DFRC

� Split up facility extended to DFRC scheme to give operational flexibility to the holder of DFRC.

9. DUTY ENTITLEMENT PASSBOOK SCHEME

� Provision made for claiming DEPB against advance payment.

� Validity of DEPB extended upto the last day of the month in which the same is expiring.

� Rationalisation of DEPB rates in line with changes in Customs duty on account of union budget.

� Coverage of additional ports under DEPB.

� TRA facility extended to all notified ports under DEPB scheme.

10. EOU/EPZ/EHTP/STP UNITS

� NFEP/EP norms rationalized. EOU/EPZ units allowed to achieve minimum Export Performance of 3 times the value of CG over 5 years instead of 5 times the value of CG. Highest NFEP requirement pegged at 10%.

� Gem and Jewellery provisions relating to EOU/EPZ units contained in Chapter 8 merged into Chapter 9 for greater clarity.

� Supplies made to bonded warehouses set up under para 11.14 and 9.21 of the policy by EOU/EPZ units to be treated as exports for the purpose of domestic sales entitlement.

� Sub-contracting of production process abroad permitted. At present sub-contracting is permissible only within the country.

� DTA sale against foreign exchange, which is counted towards NFEP/EP is being confined to payment made from EEFC account of the buyer only.

� Simplification of procedure regarding utilization of goods. EOU/EPZ units now have to account for duty free goods in over all terms and not consignment-wise. This is expected to facilitate ease in operation.

� E-Mail address is being made compulsory for approving EOU/EPZ units from 1.4.2001.

� Greater delegation to Development Commissioner’s to approve EOU/EPZ projects. At present, Development Commissioners cannot approve project beyond US$20 million.This value restriction is being withdrawn.

� Suitable procedure provided for conversion of DTA units into EOU scheme having outstanding export obligation under advance licensing scheme by carrying forward goods imported under advance Licensing scheme.

� Joint Monitoring of EOU/EPZ units by a Committee consisting of DC and customs.

11. GEMS & JEWELLERY SECTOR :

� Extension of Diamond Dollar Account scheme (DDAS) to diamond studded jewellery exporters, having an average annual turnover of Rs.5 crore or above during the preceding three licensing years, allowing DDAS holders to operate up to five bank accounts (from maximum of two accounts prescribed earlier) and allowing non-DDAS holders to supply cut and polished diamonds to DDAS holder, which would counted towards discharge of his export obligations or entitle for a Replenishment licence as the case may be.

� With a view to facilitate certification/grading by international laboratories/ agencies cut and polished diamonds weighing 0.50 carats and above, have been permitted for export and return of such diamonds for certification purposes.

� More flexibility to exporters under the Gold Loan Scheme by allowing exporters to fix the price and repay the gold loan within 180 days from the date of export subject to this price being also confirmed by the final buyer and the nominated agency supplying the gold.

� Exporters allowed to personally carry gems and jewellery of a value not exceeding US$ 2 million for purposes of holding/ participating in overseas exhibitions.

� The foreign buyer scheme wherein precious metals can be supplied free of cost to the Indian manufacturers for job working, has been extended to exporters having an annual average turnover of Rs.5 crores during the preceding three years.

� The provisions of personal carriage of gems and jewellery export and import parcels is now available from Bangalore Airport also in addition to Delhi, Mumbai, Kolkata and Chennai.

12. DEEMED EXPORTS:

� The suppliers have been given the option to file application either projectwise or covering supplies to all projects during a month/quarter or half yearly while claiming Terminal Excise duty/Drawback facility. They have also been given the option to file claim covering all the supplies to a project.

� A standard format prescribed for receipt of payment through normal banking channel.

� For supplies under paragraph 10.2(d)(e)(f) and (g) of the Policy, the sub-contractor has been given the facility to file Terminal Excise duty refund without waiting for payment from the main contractor.

13. COMPUTERISATION/EDI:

� The facility of electronic filing of applications extended to 29 out of 31 offices of DGFT.

� The facility of offline filing introduced.

� The electronic filing shall be extended to all categories of licences.

14. PROCEDURAL SIMPLIFICATION:

� Profile of importer/exporter to be submitted once and to be submitted thereafter only in case of any change in the information already furnished.

� Facility of clarifications/interview through E-Mail.

� No time limit for filing application for golden status.

� Restricted Import Licensing Committee, Export Licensing Committee, Classification Committee abolished.

15. MISCELLANEOUS

� Double weightage for grant of status to the units exporting marine products with ‘Q’ mark Certification.

� Prospective/potential exporters allowed to become associate members of the export promotion councils.

� Free import of second hand capital goods upto 10 years old.