I- Special Economic Zones (SEZs)

1. It has been decided to permit External Commercial Borrowings (ECBs) for tenure of less than three years in SEZs.

The detailed guidelines will be worked out by RBI. This will provide opportunities for accessing working capital loan for these units at internationally competitive rates.

2. Offshore Banking Units (OBUs) shall be permitted in SEZs. This should help some of our cities emerge as financial nerve centres of Asia.

ADVERTISEMENTS:

II- Employment Oriented

(a) Agriculture

1. Export restrictions like registration and packaging requirements are being removed on butter, wheat and wheat products, coarse grains, groundnut oil and cashew to Russia.

2. Restrictions on export of all cultivated (other than wild) varieties of seed, except jute and onion have been removed.

ADVERTISEMENTS:

3. To promote export of agro and agro-based products, 20 agri-export zones have been notified.

4. In order to promote diversification of agriculture, transport subsidy shall be available for export of fruits, vegetables, floriculture, poultry and dairy products.

5. 3% special DF.PB rate for primary and processed foods exported in retail packaging of 1 kg or less.

(b) Cottage Sector and Handicrafts

ADVERTISEMENTS:

1. An amount of Rs. 5 crore under Market Access Initiative (MAI) has been earmarked for promoting cottage sector exports coming under the KVIC.

2. These units shall be enticed to the benefit of Export House status on achieving lower average export performance of Rs. 5 crore as against Rs. 15 crore for others;

3. The units in handicraft sector shall be entitled to duty free imports of an enlarged list of items as embellishments up to 3% of the value of their exports.

(c) Small Scale Industry

ADVERTISEMENTS:

With a view to encouraging further development of centres of economic and export excellence such as Tirupur for hosiery, woollen blanket in Panipat, woollen knitwear in Ludhiana, following benefits shall be available to small scale sector:

(i) The recognised associations of units in these areas will be able to access the funds under the Market Access Initiative scheme for creating focused technological services and marketing abroad.

(ii) Such areas will receive priority for assistance for identified critical infrastructure gaps from the scheme on Central Assistance to States.

(d) Leather

ADVERTISEMENTS:

Duty free imports of trimmings and embellishments up to 3% of the FOB value hitherto confined to leather garments extended to all leather products.

(e) Textiles

(i) Sample fabrics permitted duty free within the 3% limit for trimmings and embellishments.

(ii) Duty Entitlement Passbook (DEPB) rates for all kinds of blended fabrics permitted. Such blended fabrics to have the lowest rate as applicable to different constituent fabrics.

ADVERTISEMENTS:

(F) Gems & Jewellery

(i) Customs duty on import of rough diamonds is being reduced to 0%. Import of rough diamonds is already freely allowed. Licensing regime for rough diamonds is being abolished. This should help the country emerge as a major international centre of diamond industry.

(ii) Value addition norms for export of plain jewellery reduced from 10% to 7%. Export of all mechanized unstudied jewellery allowed at a value addition of 3% only.

(iii) Personal carriage of jewellery allowed through Hyderabad and Jaipur airport as well.

III. Technology Oriented

(a) Electronic Hardware

1. The Electronic Hardware Technology Park (EHTP) scheme is being modified to enable the sector to face the zero duty regimes under ITA (Information Technology Agreement)-1.

(b) Chemicals and Pharmaceuticals

1. Free export of samples without any limit.

2. Reimbursement of 50% of registration fees for registration of drugs.

(c) Projects

1. Free import of equipment and other goods used abroad for more than one year.

IV. Growth Oriented

(a) Strategic Package for Status Holders

The status holders shall be eligible for the following new/special facilities:

1. Licence/Certificate/Permissions and Customs clearances for both imports and exports on self-declaration basis.

2. Priority finance for medium and long term capital requirement as per conditions notified by RBI;

3. 100% retention of foreign exchange in Exchange Earners’ Foreign Currency (EEFC) account;

4. Enhancement in normal repatriation period from 180 days to 360 days.

(b) Neutralizing high fuel costs

1. Fuel costs to be rebated in Standard Input Output Norms (SIONs) for all export products. This would enhance the cost competitiveness of our export products.

(c) Diversification of Markets

1. Setting up of “Business Centre” in the Indian missions abroad for visiting Indian exporters/businessmen.

2. ITPO portal to host a permanent virtual exhibition of Indian export products.

3. Focus LAC (Latin American Countries) was launched in November, 1997 in order to accelerate our trade with Latin American countries. This has been a great success. To consolidate the gains of this programme, we are extending this up to March, 2003.

4. Focus Africa is being launched. There is tremendous potential for trade with the Sub-Saharan African region. The first phase of the Focus Africa programme shall include 7 countries namely, Nigeria, South Africa, Mauritius, Kenya, Ethiopia, Tanzania and Ghana. The exporters exporting to these markets shall be given Export House Status on export of Rs. 5 crore and above.

5. Links with CIS countries to be revived. We have traditional trade ties with these countries. In this group, Kazakhstan, Kyrgyzstan, Uzbekistan, Turkmenistan, Ukraine and Azerbaijan arc to be in special focus in the first

(d) North Eastern States, Sikkim and Jammu and Kashmir

1. Transport subsidy for exports to be given to units located in North East, Sikkim and jammu and Kashmir so as to offset the disadvantage of being far from ports.

(e) Re-location of Industries

1. To encourage re-location of industries to India, plant and machineries would be permitted to be imported without a licence, where the depreciated value of such relocating plants exceeds Rs. 50 crores.

V. Reduction in Transaction Time & Cost

With a view to reduce transaction cost, various procedural simplifications have been introduced. These include:

DGFT

1. A new 8 digit commodity classification for imports is being adopted. This classification shall also be adopted by Customs and DGCI & S shortly.

The common classification to be used by DGFT and Customs will eliminate the classification disputes and hence reduce transaction costs and time. Similarly, Ministry of Environment and Forests is in the process of finalization of guidelines to regulate the import of hazardous waste.

2. Further simplification of all schemes.

3. Reduction of the maximum fee limit for electronic application under various schemes from Rs. 1.5 lakh to Rs. 1.00 lakh.

4. Same day licensing introduced in all regional offices.

Customs

1. The percentage of physical examination of export cargo has already been reduced to less than 10 per cent except for few sensitive destinations.

2. The application for fixation of brand rate of drawback shall be finalized within 15 days.

Banks

1. Direct negotiation of export documents to be permitted. This will help the exporters to save bank charges.

2. 100% retention in EEFC accounts.

3. The repatriation period for realization of export proceeds extended from 180 days to 360 days. The facility is already available to units in SEZ and exporters exporting to Latin American countries.

4. These facilities are being made available to status holders only for the present.

VI. Trust Based

1. Import/Export of samples to be liberalized for encouraging product up gradation.

2. Penal interest rate for bonafide defaults to be brought down from 24% to 15%.

3. No seizure of stock in trade so as to disrupt the manufacturing process affecting delivery schedule of exporters.

4. Newcomers to be entitled for licences without any verification against execution of Bank Guarantee.

VII. Duty Neutralization Instruments

(a) Advance Licence

1. Duty Exemption Entitlement Certificate (DEEC) book to be abolished.

2. The exporters can avail Advance Licence for any value.

3. Mandatory spares to be allowed in the Advance Licence up to 10% of the CIF value.

(b) Duty Free Replenishment Certificate (DFRC)

1. Technical characteristics to be dispensed with for audit purpose.

(c) Duty Entitlement Passbook (DEPB)

1. Value cap exemption granted on 429 items to continue.

2. No Present Market Value (PMV) verification except on specific intelligence.

(d) Export Promotion Capital Goods (EPCG)

1. EPCG licences of Rs. 100 crore or more to have 12 year export obligation (EO) period with 5 year moratorium period.

2. Supplies under Deemed Exports to be eligible for export obligation fulfillment along with deemed export benefit.

3. Re-fixation of EO in respect of past cases of imports of second hand capital goods under EPCG Scheme.