SETTING UP SPECIAL ECONOMIC ZONES:

    With a view to enabling hassle free manufacturing and trading activity for the purpose of exports, Special Economic Zones are being set up. The units in these Zones shall not be subjected to any pre-determined value addition, export obligation, input output/wastage norms. They shall be treated as being outside the Customs territory of the country. Sale in Domestic Tariff Area by the units in these Zones will be permitted only on payment of full Customs Duty.

    A private sector Special Economic Zone in an area of about 3,500 hectares has been sanctioned at Pipavav in Gujarat on the West Coast. Another Special Economic Zone has been sanctioned at Tuticorin in Tamil Nadu. Besides, the existing Export Processing Zones at Mumbai, Kandla, Vishakhapatnam and Cochin are also being converted into Special Economic Zones.

    With a view to making exports a national effort by involving all the State Governments, a Scheme has been evolved for granting assistance to the States on the basis of their export performance for development of export related infrastructure. To facilitate an equitable allocation of resources, this amount will be distributed on the basis of absolute export performance as well as on the basis of incremental one. To begin with, an allocation of Rs. 250 crores is proposed for the current year which would be suitably increased in the subsequent years. There would be subsequent annual allocation for this Fund. The amount would be utilised by the States for complementary export related infrastructure, such as roads connecting the production centres with Ports, research and development of state specific ethnic products, development of cold chains for agro exports, development of minor ports, creation of new export promotion industrial parks, human resource development and for the purpose of developing marketing infrastructure.

    In an attempt to speed up the transactions and to bring about transparency in the offices of DGFT, electronic filing of licence applications has been already introduced in 7 major ports. This is being extended to all the remaining ports by June 30, 2000. The new arrangement will practically eliminate all physical interface between the DGFT offices and the exporter who shall get his licences within 24 hours. With the proposed electronic data interchange with the other Govt. organisations, the transaction time and cost shall get reduced substantially.

    Bar Coding of packaged export products is also being encouraged with a view to introducing international practices for labelling and packaging. All Bar Coded products shall be given double weightage for calculating eligibility for granting status to such units.

The Scheme is being extended uniformally to all the sectors and to all Capital Goods without any threshold limit on payment of 5% of duty. It has also been extended to identified service sectors. No additional customs duty/countervailing duty required to be paid. In all cases, export obligation fulfillment period is being extended to 8 years.

• Introduction of post-export duty free replenishment licence scheme for enabling import of inputs on the basis of input-output norms. The Scheme would be available for more than 5000 such items where input output norms exist and on the basis of uniform value addition of 33%.

• Pre-export DEPB Scheme abolished, as very few exporters were using this Scheme.

• Advance Licence for physical exports, Advance Licence for domestic supply and Advance Licence for intermediate supply for exports, will be subject to actual user condition and non-transferable. The Advance Licence for physical export and for intermediate supply for exports will be exempted from payment of all kinds of duties like Basic,ACD,SAD, Antidumping, Safeguard duty. Advance Licence for annual requirement to continue.

3. Duty Entitlement Passbook Scheme (DEPB):

• DEPB rates rationalised to account for the changes in Customs duties.

• Caps fixed on certain items but there would be no verification of PMV (Present Market Value) on such items.

• The threshold limit of Rs. 20 crore for fixing new DEPB rates removed.

• Diamond Dollar Account Scheme has been introduced for such items wherein export proceeds will be retained in dollar and such DDA holder will be allowed to utilize dollars in this account for import of rough diamonds and for purchase of rough diamonds/cut and polished diamonds from local market. This will go a long way in developing India as a major trading centre for diamonds.

• EPZ & SEZ units have been allowed to import studded jewellery for repairs, re-make and re-export.

• Personal carriage of import parcels of Gems & Jewellery has been allowed.

• Replenishment licence, for duty free import of consumables required for Gems & Jewellery items, has been introduced.

• Replenishment licence for import of jewellery samples, upto 2.5% of exports of preceding year, has been introduced.

• Status holders have been allowed to import gold directly from foreign buyers to make jewellery and re-export. They have also been allowed to import semifinished jewellery directly for re-export.

• Export of jewellery by Speed Post also allowed.

• Value Addition Norms for export of plain jewellery rationalised & permission also granted for export of plain jewellery with imitation stones/cubic zerconia etc. with the same value addition.

2. Silk :

• Input-output norms rationalised to promote the export of silk and silk products.

• Central Silk Board inspection dispensed with.

• Import of silk allowed under SIL.

3. Leather, Handicrafts & Garments:

• Entitlement for duty free import of trimmings, embellishments and other items increased from 2 to 3% of FOB value of exports.

• For encouraging exports in these new economy areas, manufacturing firms allowed to import laboratory equipment, chemicals and reagents for R&D purposes upto 1% of the fob value of exports duty free.

• Procedure simplified for export of non-prohibited and non-CITES Indian herbs and formulation. NOC (No Objection Certificate) introduced in place of a cumbersome Legal Procurement Certificate.

• Inspection norms rationalised for export of products conforming to the standard pharmacopoeia as per the declaration on the label. The requirement of NOC from the Drug Controller dispensed with.

• Double weightage on FOB or NFE (Net Foreign Exchange) on exports made by units having ISO or equivalent status for granting status certification.

• In an attempt to promote export of branded products, value caps under DEPB Scheme will not be applicable to the identified branded products.

• To promote export of Granite and other related industry, EOUs for this sector allowed the same benefit as in case of agriculture sector. The capital goods imported under this Scheme will now be allowed to be moved out for the purpose of excavation.

• All EOUs (Export Oriented Units)/units in EPZ (Export Processing Zones) having an investment of Rs. 5 crores or above, in plant and machinery, will be required to maintain Positive Value Addition only.

• EOUs/EPZ units have been allowed to carry jobwork for DTA units, in all sectors.

• Uniform benefits extended to eligible categories under deemed exports. Definition of capital goods expanded to include all such items/components/spares/accessories/tools etc. which go into the making of Capital Goods.

• Deemed export benefits have been extended to core infrastructural sectors, involving an investment of Rs.100 crore and above, like coal and hydrocarbon.

• Deemed Export benefits extended to supply to projects funded by UN agencies.

• Deemed Export benefits have been extended to power sectors even for modernisaton and for renovation of power plants.

• Duty exemption licence facility on the basis of self-declaration extended to deemed exports as well as intermediate supplies.

• Registration-cum-Membership Certificate shall now be required to be filed once in 4 years instead of with each application.

• Powers to issue Trading House Certificate delegated to regional licensing authorities.

• Requirement of endorsement from Export Promotion Councils for export of non-quota textile items to quota countries and textile items to non-quota countries dispensed with.

• Project exporters/construction companies/domestic service providers with a domestic turnover of Rs. 100 crores or more shall now be eligible for "International Service House" status on signing an MoU with the DGFT for exports.

• Double weightage on exports manufactured in Jammu & Kashmir for status.

    Second hand capital goods which are less than 10 years old will be allowed to be imported without obtaining any licence on surrender of SIL.

• The SIL list will be abolished by 1.4.2001 and the grant of SIL will be discontinued after 31.3.2001. Thus, SIL will not be granted in respect of exports/supplies made on or after 1.4.2000 and such licences issued during this financial year will be valid only upto 31.3.2001.

• All items which are under SIL will now be importable on surrender of SIL equivalent to 5 times of CIF value of imported goods.

    Quantitative restrictions are being removed on 714 tariff lines. Out of these only 58 are those which are reserved for small scale sector. The remaining 198 items reserved for small scale sector have been backloaded to be freed only on 1.4.2001.