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‘INDIANFOREIGN TRADE: IMPORTERS AND EXPORTERS SHOULD KNOW THE GENERAL PROVISIONS(2010-2014)’Exportsand Imports free unless regulatedExportsand Imports shall be free, except where regulated by FTP or any other law inforce. The item wise export and import policy shall be, as specified in ITC(HS) notified by DGFT, as amended from time to time.Importof rough diamond from Cote d’Ivoire shall be prohibited in compliance toParagraph 6 of UN Security Council Resolution (UNSCR) 1643(2005).Theimport/export of rough diamond (HS Code 710210, 710221 or 710231) from / toVenezuela shall be prohibited in view of voluntary separation of Venezuela fromthe Kimberley Process Certification Scheme (KPCS). No Kimberley ProcessCertificate shall be accepted / endorsed/ issued for import and export of roughdiamonds from / to Venezuela.(1)Import / export of arms and related material from / to Iraq shall beprohibited.(2)Direct or indirect export and import of following items, whether or notoriginating in Democratic People’s Republic of Korea (DPRK), to / from, DPRK isprohibited:Allitems, materials equipment, goods and technology including as set out in listsin documents S/2006/814,S/2006/815 and S/2006/853(United Nations Security CouncilDocuments) which could contribute to DPRK’s nuclear-related, ballisticmissile-related or other weapons of mass destruction-related programmes.(3)Direct or indirect export and import of all items, materials, equipment, goodsand technology which could contribute to Iran’s enrichment-related,reprocessing or heavy water related activities, or to development of nuclearweapon delivery systems, as mentioned below, whether or not originating inIran, to / from Iran is prohibited:(i)items, listed in INFCIRC/254/Rev8/Part I in document S/2006/814, in SectionsB.2 to B.7 as well as A.I and B.I except supply, sale or transfer of equipmentcovered by B.I when such equipment is for light water reactors and low-enricheduranium covered by A.1.2 when it is incorporated in assembled nuclear fuelelements for such reactors;(ii)items listed in S/2006/815 except supply sale or transfer of items covered by19.A.3 of Category II.Above-mentionedUN Security Council documents are accessible from DGFT web site.Compliancewith Laws Everyexporter or importer shall comply with the provisions of FT (D&R) Act, theRules and Orders made there-under, FTP and terms and conditions of any Authorisationgranted to him. All imported goods shall also be subject to domestic Laws,Rules, Orders, Regulations, technical specifications, environmental and safetynorms as applicable to domestically produced goods. No import or export ofrough diamonds shall be permitted unless accompanied by Kimberley Process (KP)Certificate as specified by Gem & Jewellery EPC (GJEPC).Interpretationof PolicyIfany question or doubt arises in respect of interpretation of any provisioncontained in FTP, or classification of any item in ITC (HS) or Schedule of DEPBRates (including content, scope or issue of an authorization there under) saidquestion or doubt shall be referred to DGFT whose decision thereon shall befinal and binding.ProcedureDGFTmay, specify procedure to be followed for an exporter or importer or by anylicensing or any other competent authority for purpose of implementing provisionsof FT (D&R) Act, the Rules and the Orders made there under and FTP. Suchprocedures shall be published by means of a Public Notice, and may, in like manner,be amended from time to time.Exemptionfrom Policy / ProcedureDGFTmay pass such orders or grant such relaxation or relief, as he may deem fit andproper, on grounds of genuine hardship and adverse impact on trade.DGFTmay, in public interest, exempt any person or class or category of persons fromany provision of FTP or any procedure and may, while granting such exemption,impose such conditions as he may deem fit. Such request may be considered onlyafter consulting committees as under:(i)  Fixation/ modification of product norms under all schemes  -- NormsCommittee(ii) Nexuswith capital goods (CG) and benefits under EPCG Schemes -- EPCG Committee(iii) Allother Issues  ---  Policyrelaxation Committee (PRC)Principlesof Restriction DGFTmay, through a notification, adopt and enforce any measure necessary for: -(i)Protection of public morals.(ii)Protection of human, animal or plant life or health.(iii)Protection of patents, trademarks and copyrights and the prevention ofdeceptive practices.(iv)Prevention of use of prison labour.(v)Protection of national treasures of artistic, historic or archaeological value.(vi)Conservation of exhaustible natural resources.(vii)Protection of trade of fissionable material or material from which they arederived; and(viii)Prevention of traffic in arms, ammunition and implements of war.RestrictedGoods Anygoods, export or import of which is restricted under ITC(HS) may be exported orimported only in accordance with an Authorization or in terms of a publicnotice issued in this regard.Termsand Conditions of a licence / Certificate / Permission / AuthorizationEveryAuthorization shall be valid for prescribed period of validity and shallcontain such terms and conditions as may be specified by RA which may include:(a)Quantity, description and value of goods;(b)Actual User condition;(c)Export obligation;(d)Value addition to be achieved; and(e)Minimum export / import price.Authoriaation/ Licence / Certificate / Permission not a RightNoperson may claim an Authorization as a right and DGFT or RA shall have power torefuse to grant or renew the same in accordance with provisions of FT (D&R)Act, Rules made there under and FTP.PenaltyIfan Authorization holder violates any condition of such Authorisation or failsto fulfill export obligation, he shall be liable for action in accordance withFT (D&R) Act, the Rules and Orders made there under, FTP and any other lawfor time being in force.StateTrading Anygoods, import or export of which is governed through exclusive or specialprivileges granted to STE(s), may be imported or exported by STE(s) as perconditions specified in ITC (HS). DGFT may, however, grant an Authorization toany other person to import or export any of these goods.SuchSTE(s) shall make any such purchases or sales involving imports or exportssolely in accordance with commercial considerations, including price, quality, availability,marketability, transportation and other conditions of purchase or sale in a nondiscriminatory manner and shall afford enterprises of other countries adequateopportunity, in accordance with customary business practices, to compete forparticipation in such purchases or sales.Importer-ExporterCode (IEC) Number Noexport or import shall be made by any person without an IEC number unlessspecifically exempted. An IEC number shall be granted on application bycompetent authority in accordance with procedure.Tradewith NeighbouringCountries DGFTmay issue instructions or frame schemes as may be required to promote trade andstrengthen economic ties with neighbouring countries.TransitFacility Transitof goods through India from / or to countries adjacent to India shall beregulated in accordance with bilateral treaties between India and thosecountries and will be subject to such restrictions as may be specified by DGFTin accordance with International Conventions.Tradewith Russia under Debt- Repayment AgreementIncase of trade with Russia under Debt Repayment Agreement, DGFT may issueinstructions or frame schemes as may be required, and anything contained inFTP, in so far as it is inconsistent with such instructions or schemes, shallnot apply.ActualUser Condition Capitalgoods, raw materials, intermediates, components, consumables, spares, parts,accessories, instruments and other goods, which are importable without anyrestriction, may be imported by any person.However,if such imports require an Authorization, actual user alone may import suchgoods unless actual user condition is specifically dispensed with by RA.SecondHand Goods Allsecond hand goods, except second hand capital goods, shall be restricted forimports and may be imported only in accordance with provisions of FTP, ITC(HS), HBP v1, Public Notice or an Authorization issued in this regard.Importof second hand capital goods, including refurbished / re-conditioned sparesshall be allowed freely.However,second hand personal computers / laptops, photocopier machines, airconditioners, diesel generating sets will only be allowed against a licence.Importof re-manufactured goods shall be allowed only against a licence.Scrap/Wastein SEZ Anywaste or scrap or remnant including any form of metallic waste & scrapgenerated during manufacturing or processing activities of an SEZ Unit/Developer/Co-developer shall be allowed to be disposed in DTA freelysubjectto payment of applicable Customs Duty.Importof samples Importof samples shall be governed by specific contemporary norms.Importof Gifts Importof gifts shall be permitted where such goods are otherwise freely importableunder FTP. In other cases, a Customs Clearance Permit (CCP) shall be requiredfrom DGFT.PassengerBaggageBonafidehousehold goods and personal effects may be imported as part of passengerbaggage as per limits, terms and conditions thereof in Baggage Rules notified byMinistry of Finance.Samplesof such items that are otherwise freely importable under FTP may also beimported as part of passenger baggage without an Authorization.Exporterscoming from abroad are also allowed to import drawings, patterns, labels, pricetags, buttons, belts, trimming and embellishments required for export, as partof their passenger baggage without an Authorization.Importon Export basisFreelyexportable new or second hand capital goods, equipments, components, parts andaccessories, containers meant for packing of goods for exports, jigs, fixtures,dies and moulds may be imported for export without an Authorization onexecution of LUT / BG with Customs Authorities.Re-importof goods repaired abroad Capital goods, equipments, components,parts and accessories, whether imported or indigenous, except those restrictedunder ITC (HS) may be sent abroad for repairs, testing, quality improvement orupgradation or standardization of technology and re-imported without an Authorization.Importof goods used in projects abroad Aftercompletion of projects abroad, project contractors may import, without an Authorizationused goods including capital goods provided they have been used for at leastone year.Saleon High Seas Saleof goods on high seas for import into India may be made subject to FTP or anyother law in force.Importunder Lease Financing Permissionof RA is not required for import of capital goods under lease financing.Clearanceof Goods from Customs Goodsalready imported / shipped / arrived, in advance, but not cleared from Customsmay also be cleared against an Authorization issued subsequently.Executionof BG / LUT Whereverany duty free import is allowed or where otherwise specifically stated,importer shall execute prescribed LUT / BG / Bond with Customs Authority beforeclearance of goods. In case of indigenous sourcing, Authorisation holder shallfurnish LUT / BG / Bond to RA concerned before sourcing material fromindigenous supplier / nominated agency.Private/ Public Bonded Warehouses for ImportsPrivate/ Public bonded warehouses may be set up in DTA as per terms and conditions ofnotification issued by DoR.Anyperson may import goods except prohibited items, arms and ammunition, hazardouswaste and chemicals and warehouse them in such bonded warehouses. Such goodsmay be cleared for home consumption in accordance with provisions of FTP andagainst Authorization, wherever required. Customs duty as applicable shall bepaid at the time of clearance of such goods.Ifsuch goods are not cleared for home consumption within a period of one year orsuch extended period as the custom authorities may permit, importer of suchgoods shall re-export the goods.FreeExports Allgoods may be exported without any restriction except to extent such exports areregulated by ITC (HS) or any other provision of FTP or any other law for timebeing in force.DGFTmay, however, specify through a public notice such terms and conditionsaccording to which any goods, not included in ITC (HS), may be exported withoutan Authorization.Exportof Samples Exportof samples and Free of charge goods shall be governed by concerned provisions related to Indian Foreign trade.Exportof Passenger BaggageBonafidepersonal baggage may be exported either along with passenger or, ifunaccompanied, within one year before or after passenger’s departure fromIndia. However, items mentioned as restricted in ITC (HS) shall require an Authorization.Government of India officials proceeding abroad on official postings shall,however, be permitted to carry alongwith their personal baggage, food items (free,restricted or prohibited) strictly for their personal consumption.Exportof Gifts Goods,including edible items, of value not exceeding Rs.5,00,000 /- in a licensingyear, may be exported as a gift.However,items mentioned as restricted for exports in ITC (HS) shall not be exported asa gift, without an Authorization.Exportof Spares Warrantyspares (whether indigenous or imported) of plant, equipment, machinery,automobiles or any other goods, (except those restricted under ITC (HS)) may beexported along with main equipment or subsequently but within contractedwarranty period of such goods subject to approval of RBI.ThirdParty ExportsThirdparty exports shall be allowed under FTP.Exportof Imported Goods Goodsimported, in accordance with FTP, may be exported in same or substantially sameform without an Authorization provided that item to be imported or exported isnot restricted for import or export in ITC (HS).Exportsof such goods imported against payment in freely convertible currency would bepermitted against payment in freely convertible currency.Goods,including those mentioned as restricted for import (except prohibited items)may be imported under Customs Bond for export in freely convertible currency withoutan Authorization provided that item is freely exportable without anyconditionality / requirement of Licence / permission as may be required underITC (HS) Schedule II.AHides, Skins and semi finished leather may be imported in the Public Bondedwarehouse for the purpose of DTA sale and the unsold items thereof can bere-exported from such bonded warehouses at 5 0% of the applicable export duty.However, this facility shall not be allowed for import under Private Bondedwarehouse.Exportof Replacement Goods Goodsor parts thereof on being exported and found defective / damaged or otherwiseunfit for use may be replaced free of charge by the exporter and such goods shallbe allowed clearance by Customs authorities, provided that replacement goodsare not mentioned as restricted items for exports in ITC (HS).Exportof Repaired GoodsGoodsor parts, except restricted under ITC (HS) thereof, on being exported and founddefective, damaged or subsequent re-export.Suchgoods shall be allowed clearance without an Authorization and in accordancewith customs notification.PrivateBonded Warehouses for Exports Privatebonded warehouses exclusively for exports may be set up in DTA as per terms andconditions of notifications issued by DoR.Suchwarehouses shall be entitled to procure goods from domestic manufacturerswithout payment of duty.Suppliesmade by a domestic supplier to such notified warehouses shall be treated asphysical exports provided payments are made in free foreign exchange.Denominationof Export Contracts Allexport contracts and invoices shall be denominated either in freely convertiblecurrency or Indian rupees butexportproceeds shall be realized in freely convertible currency.However,export proceeds against specific exports may also be realized in rupees,provided it is through a freely convertible VOSTRO account of a non residentbank situated in any country other than a member country of ACU or Nepal orBhutan. Additionally, rupee payment through VOSTRO account must be againstpayment in free foreign currency by buyer in his non-resident bank account.Free foreign exchange remitted by buyer to his non-resident bank (afterdeducting the bank service charges) on account of this transaction would betaken as export realization under export promotion schemes of FTP.Contracts[for which payments are received through Asian Clearing Union (ACU)] shall bedenominated in ACU Dollar. Central Government may relax provisions of thisparagraph in appropriate cases. Export contracts and Invoices can be denominatedin Indian rupees against EXIM Bank / Government of India line of credit.Realisationof Export Proceeds Ifan exporter fails to realise export proceeds within time specified by RBI, heshall, without prejudice to any liability or penalty under any law in force, beliable to action in accordance with provisions of FT (D&R) Act, Rules andOrders made there under and FTP.Freemovement of export goods Consignmentsof items meant for exports shall not be withheld / delayed for any reason by anyagency of Central / State Government. In case of any doubt, authoritiesconcerned may ask for an undertaking from exporter.Noseizure of StockNoseizure of stock shall be made by any agency so as to disrupt manufacturingactivity and delivery scheduleofexports. In exceptional cases, concerned agency may seize the stock on basis ofprima facie evidence. However,such seizure should be lifted within 7 days.ExportPromotion Councils (EPC) Basicobjective of Export Promotion Councils (EPCs) is to promote and develop Indianexports. Each Council is responsible for promotion of a particular group of products,projects and services.Registration-cum- Membership Certificate  (RCMC)Anyperson, applying for: (i) an Authorization to import / export,[except items listed as restricted items in ITC(HS)] or(ii)any other benefit or concession under FTP shall be required to furnish RCMCgranted by competent authority in accordance with procedure specified in HBPv1 unlessspecifically exempted under FTP.Certificateof Registration as Exporter of Spices (CRES) issued by Spices Board shall betreated as Registration- Cum-Membership Certificate (RCMC) for the purposes underthis Policy.TradeFacilitation through EDI InitiativesItis endeavor of Government to work towards greater simplification,standardization and harmonization of trade documents using international bestpractices. As a step in this direction, DGFT shall move towards an automatedenvironment for electronic filing, retrieval and authentication of documentsbased on agreed protocols and message exchange with other community partners includingCustoms and Banks.DGCI&SCommercial Trade Data Toenable users to make commercial decisions in a more professional manner,DGCI&S trade data shall be made available with a minimum time lag in aquery based structured format on a commercial criteria.FiscalIncentives to promote EDI Initiatives adoption Witha view to promote use of Information Technology, DGFT will provide fiscalincentives to user community. Deductionsin Application Fee would be admissible for applications signed digitally or /and where application fee is paid electronically through EFT (Electronic Fund Transfer). Regularizationof EO default and settlement of customs duty and interest through SettlementCommissionWitha view to providing assistance to firms who have defaulted under FTP for reasonsbeyond their control as also facilitating merger, acquisition andrehabilitation of sick units, it has been decided to empower Settlement Commissionin Central Board of Excise and Customs to decide such cases also with effect from01.04.2005.Easingof Documentation RequirementPendingfinalization of Single Common Document (SCD) for international trade,Government Departments dealing with exports and imports will honour Authorizationissued by other Government departments based on verification of exportdocuments Like shipping bill, bank realization certificate, Packing list, billof lading etc. and will not insist upon fresh submission of these documents.Exemption/ Remission of Service Tax in DTA Forall goods and services which are exported from units  in DTA and units in EOU / EHTP / STP / BTPexemption / remission of service tax levied and related to exports, shall beallowed, as per prescribed procedure.Exemptionfrom Service Tax in SEZ Unitsin SEZ shall be exempted from service tax.Exemptionfrom Service Tax on Services received abroad Forall goods and services exported from India, services received / renderedabroad, where ever possible, shall be exempted from service tax.