w.e.f. 1.4.2006

Website: http://dgft.gov.in

Ministry of Commerce and Industry

Department of Commerce

PART-II, SECTION-3, SUB SECTION (ii)

MINISTRY OF COMMERCE AND INDUSTRY

DEPARTMENT OF COMMERCE

This issues in Public interest.

( K.T. CHACKO )

Director General of Foreign Trade and

Ex Officio Additional Secretary to the Government of India
(Issued from F.No. 01/94/180/Foreign Trade Policy/AM07/PC-I)

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9 DEFINITIONS 

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part of the Foreign Trade Policy.

Foreign Trade (Development and Regulation Act), 1992 (No.

22 of 1992), the Central Government hereby notifies the

Foreign Trade Policy for the period 2004-2009 incorporating

the Export and Import Policy for the period 2002-2007, as

modified. This Policy shall come into force with effect from

2009 unless as otherwise specified.

to make any amendments to this Policy in exercise of the

powers conferred by Section-5 of the Act. Such amendment

shall be made by means of a Notification published in the

Gazette of India.

immediately before the commencement of this Policy shall,

in so far as they are not inconsistent with the provisions of

this Policy, continue to be in force and shall be deemed to

have been made, issued or done under this Policy.

Authorisations, certificates and permissions issued before the

commencement of this Policy shall continue to be valid for

the purpose and duration for which such Authorisation,

certificate or permission was issued, unless otherwise

stipulated.

1.5 In case an export or import that is permitted freely under this

Policy is subsequently subjected to any restriction or

regulation, such export or import will ordinarily be permitted

notwithstanding such restriction or regulation, unless

otherwise stipulated, provided that the shipment of the export

or import is made within the original validity of an irrevocable

letter of credit established before the date of imposition of

such restriction.

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especially in semi urban and rural areas, certain special

focus initiatives have been identified for the agriculture,

handlooms, handicraft, gems & jewellery, leather and Marine

sectors.

Government of India shall make concerted efforts to promote

exports in these sectors by specific sectoral strategies that shall

be notified from time to time.

For the present, the thrust sectors indicated below shall be

extended the following facilities:

(i) Agriculture and Village Industry

(a) A new scheme called the Vishesh Krishi and Gram

Udyog Yojana (Special Agricultural and Village

Industry Scheme) for promoting export of fruits,

Vegetables, Flowers, Minor Forest produce, Dairy,

Poultry and their value added products and Gram

Udyog products has been introduced (Para 3.8).

(b) Funds shall be earmarked under ASIDE for

development of Agri Export Zones (AEZ)

(c) Deleted.

(d) Deleted.

(e) Capital goods imported under EPCG shall be

permitted to be installed anywhere in the AEZ.

(f) Import of restricted items, such as panels, shall be

allowed under the various export promotion

schemes.

(g) Import of inputs such as pesticides shall be

permitted under the Advance Authorisation for agro

exports.

(h) New towns of export excellence with a threshold

limit of Rs 250 crore shall be notified.

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(ii) Handlooms :

(a) Specific funds would be earmarked under MAI/

MDA Scheme for promoting handloom exports.

(b) Duty free import entitlement of specified trimmings

and embellishments shall be 5% of FOB value of

exports during the previous financial year.

(c) Duty free import entitlement of hand knotted carpet

samples shall be 1% of FOB value of exports during

the previous financial year.

(d) Duty free import of old pieces of hand knotted

carpets on consignment basis for re-export after

repair shall be permitted.

(e) New towns of export excellence with a threshold

limit of Rs 250 crore shall be notified.

(f) Government has decided to develop a trade mark

for Handloom on lines similar to ‘Woolmark’ and

‘Silkmark’. This will enable handloom products to

develop a niche market with a distinct identity.

(iii) Handicrafts:

(a) New Handicraft SEZs shall be established which

would procure products from the cottage sector and

do the finishing for exports.

(b) Duty free import entitlement of trimmings and

embellishments shall be 5% of the FOB value of

exports during the previous financial year. The

entitlement is broad banded, and shall extend also

to merchant exporters tied up with supporting

manufacturers.

(c) The Handicraft Export Promotion Council shall be

authorized to import trimmings, embellishments

and consumables on behalf of those exporters for

whom directly importing may not be viable.

(d) Specific funds would be earmarked under MAI &

MDA Schemes for promoting Handicraft exports.

(e) CVD is exempted on duty free import of trimmings,

embellishments and consumables.

(f) New towns of export excellence with a reduced

threshold limit of Rs 250 crore shall be notified.

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(iv) Gems & Jewellery

(a) Import of gold of 8k and above shall be allowed

under the replenishment scheme subject to the

import being accompanied by an Assay Certificate

specifying the purity, weight and alloy content.

(b) Duty free import entitlement of consumables for

metals other than Gold, Platinum shall be 2% of

FOB value of exports during the previous financial

year.

(c) Duty free import entitlement of commercial samples

shall be Rs 300,000.

(d) Duty free re-import entitlement for rejected

jewellery shall be 2% of the FOB value of exports

(e) Cutting and polishing of gems and jewellery, shall

be treated as manufacturing for the purposes of

exemption under Section 10A of the Income Tax

Act

(v) Leather and Footwear

(a) Duty free import entitlement of specified items shall

be 5% of FOB value of exports during the preceding

financial year.

(b) The duty free entitlement for the import of

trimmings, embellishments and footwear

components for footwear (leather as well as

synthetic), gloves, travel bags and handbags shall

be 3% of FOB value of exports of the previous

financial year. The entitlement shall also cover

packing material, such as printed and non printed

shoeboxes, small cartons made of wood, tin or

plastic materials for packing footwear.

(c) Machinery and equipment for Effluent Treatment

Plants shall be exempt from basic customs duty.

(d) Re-export of unsuitable imported materials such as

raw hides & skins and wet blue leathers is permitted.

(e) CVD is exempted on lining and interlining material

notified at S.No 168 of Customs Notification No

21/2002 dated 01.03.2002.

(f) CVD is exempted on raw, tanned and dressed fur

skins falling under Chapter 43 of ITC (HS).

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the extent of 1% of FOB value of preceding

financial years export.

(b) To allow import of monofilament long line system

for tuna fishing at a concessional rate of duty.

(c) A self removal procedure for clearance of seafood

waste to be applicable subject to prescribed wastage

norms.

transformed into a world-class complex with visitor

friendliness ingress and egress system. The complex utilisation

will be improved, increased and diversified. There shall be

brand new, state-of-the-art, environmentally- controlled, airconditioned

exhibition areas, and Permanent Exhibition Marts.

In addition, a large Convention Centre to accommodate ten

thousand delegates will be developed, with multiple and

flexible hall spaces, auditoria and meeting rooms with hi-tech

equipment. A year-round Food and Beverage destination will

be developed, with a large number of outlets covering all

cuisines and pricing levels. There will be a multi- level park

to accommodate over nine thousand vehicles within the

envelope of Pragati Maidan.

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dynamic role in advising government on relevant issues

connected with Foreign Trade Policy. There would be a process

of continuous interaction between the Board of Trade and

Government in order to achieve the desired objective of

boosting India’s exports.

reference:

I To advise the Government on Policy measures for

preparation and implementation of both short and

long term plans for increasing exports in the light

of emerging national and international economic

scenarios;

II To review export performance of various sectors,

identify constraints and suggest industry specific

measures to optimize export earnings;

III To examine the existing institutional framework for

imports & exports and suggest practical measures

for further streamlining to achieve the desired

objectives;

IV To review the policy instruments and procedures

for imports & exports and suggest steps to

rationalize and channelise such schemes for

optimum use;

V To examine issues which are considered relevant

for promotion of India’s foreign trade, and to

strengthen the international competitiveness of

Indian goods and services; and

VI To commission studies for furtherance of the above

objectives.

trade policy to be Chairman of the Board of Trade.

Government shall also nominate 25 persons, of whom at least

10 will be experts in trade policy. In addition, Chairmen of

recognized Export Promotion Councils and President or

Secretary-Generals of National Chambers of Commerce will

be ex-officio members.

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recommendations to Government on issues pertaining to its

terms of reference.

and to co-opt experts to these, to make

recommendations on specific sectors and objectives.

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for the time being in force. The item wise export and import

policy shall be, as specified in ITC(HS) published and notified

by Director General of Foreign Trade, as amended from time

to time.

of the Foreign Trade (Development and Regulation) Act, 1992,

the Rules and Orders made thereunder, the provisions of this

Policy and the terms and conditions of any Licence/certificate/

permission/Authorisation granted to him, as well as provisions

of any other law for the time being in force. All imported

goods shall also be subject to domestic Laws, Rules, Orders,

Regulations, technical specifications, environmental and

safety norms as applicable to domestically produced goods.

No import or export of rough diamonds shall be permitted

unless the shipment parcel is accompanied by Kimberley

Process (KP) Certificate required under the procedure

specified by the Gem & Jewellery Export Promotion Council

(GJEPC).

of any provision contained in this Policy, or regarding the

classification of any item in the ITC(HS) or Handbook (Vol.1)

or Handbook (Vol.2), or Schedule Of DEPB Rate the said

question or doubt shall be referred to the Director General of

Foreign Trade whose decision thereon shall be final and

binding.

If any question or doubt arises whether a licence/ certificate/

permission has been issued in accordance with this Policy or

if any question or doubt arises touching upon the scope and

content of such documents, the same shall be referred to the

Director General of Foreign Trade whose decision thereon

shall be final and binding.

class of cases, specify the procedure to be followed by an

exporter or importer or by any licensing or any other competent

authority for the purpose of implementing the provisions of

the Act, the Rules and the Orders made thereunder and this

Policy. Such procedures shall be included in the Handbook

(Vol.1), Handbook (Vol.2), Schedule of DEPB Rate and in

ITC(HS) and published by means of a Public Notice. Such

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procedures may, in like manner, be amended from time to

time.

The Handbook (Vol.1) is a supplement to the Foreign Trade

Policy and contains relevant procedures and other details. The

procedure of availing benefits under various schemes of the

Policy are given in the Handbook (Vol.1).

to the applicant or that a strict application of the Policy or the

procedure is likely to have an adverse impact on trade, may

be made to the Director General of Foreign Trade for such

relief as may be necessary. The Director General of Foreign

Trade may pass such orders or grant such relaxation or relief,

as he may deem fit and proper.

The Director General of Foreign Trade may, in public interest,

exempt any person or class or category of persons from any

provision of this Policy or any procedure and may, while

granting such exemption, impose such conditions as he may

deem fit. Such request may be considered only after consulting

Norms Committee (NC) if the request is in respect of a

provision of Chapter-4 (excluding any provision relating to

Gem & Jewellery sector) and EPCG Committee if the request

is in respect of a provision of Chapter-5 of the Policy/

Procedure. However, any such request in respect of a provision

other than Chapter-4, Chapter-5 and Gem & Jewellery sector

as given above may be considered only after consulting Policy

Relaxation Committee.

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 of deceptive 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 are derived; and

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viii Prevention of traffic in arms, ammunition and

implements of war.

ITC(HS) may be exported or imported only in accordance

with a licence/ certificate/ permission or a public notice issued

in this behalf.

conditions as may be specified by the licensing authority which

may include:

(a) The quantity, description and value of the goods;

(b) Actual User condition;

(c) Export obligation;

(d) The value addition to be achieved; and

(e) The minimum export price.

Licence/certificate/permission/Authorisation in accordance

with the provisions of the Act and the Rules made there

under.

violates any condition of the Licence/certificate/ permission

or fails to fulfill the export obligation, he shall be liable for

action in accordance with the Act, the Rules and Orders made

there under, the Policy and any other law for the time being in

force.

exclusive or special privileges granted to State Trading

Enterprise(s), may be imported or exported by the State

Trading Enterprise(s) as specified in the ITC(HS) Book subject

to the conditions specified therein. The Director General of

Foreign Trade may, however, grant a Licence/certificate/

permission/Authorisation to any other person to import or

export any of these goods.

In respect of goods the import or export of which is governed

through exclusive or special privileges granted to State Trading

Enterprise(s), the State Trading Enterprise(s) shall make any

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such purchases or sales involving imports or exports solely in

accordance with commercial considerations, including price,

quality, availability, marketability, transportation and other

conditions of purchase or sale. These enterprises shall act in a

non discriminatory manner and shall afford the enterprises of

other countries adequate opportunity, in accordance with

customary business practices, to compete for participation in

such purchases or sales.

exempted. An Importer-Exporter Code (IEC) number shall

be granted on application by the competent authority in

accordance with the procedure specified in the Handbook

(Vol.1).

required to promote trade and strengthen economic ties with

neighbouring countries.

to India shall be regulated in accordance with the bilateral

treaties between India and those countries and will be subject

to such restrictions as may be specified by DGFT in accordance

with International Conventions.

as may be required, and anything contained in this Policy, in

so far as it is inconsistent with such instructions or schemes,

shall not apply.

consumables, spares, parts, accessories, instruments and other

goods, which are importable without any restriction, may be

imported by any person.

However, if such imports require a licence/ certificate/

permission, the actual user alone may import such goods

unless the actual user condition is specifically dispensed with

by the licensing authority.

shall be restricted for imports and may be imported only in

accordance with the provisions of this Policy, ITC(HS),

Handbook (Vol.1), Public Notice or a Licence/certificate/

permission/Authorisation issued in this behalf.

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Import of second hand capital goods, including

refurbished/ re-conditioned spares shall be allowed freely.

However, second hand personal computers/laptops,

photocopier machines, air conditioners, diesel generating sets

will only be allowed against a license issued in this behalf.

Import of re-manufactured goods shall be allowed only against

a licence issued in this behalf.

in Handbook (Vol.1).

otherwise freely importable under this Policy. In other cases,

a Customs Clearance Permit (CCP) shall be required from

the DGFT.

imported as part of passenger baggage as per the limits, terms

and conditions thereof in the Baggage Rules notified by the

Ministry of Finance.

Samples of such items that are otherwise freely importable

under this Policy may also be imported as part of passenger

baggage without a Licence/certificate/permission/

Authorisation.

Exporters coming from abroad are also allowed to import

drawings, patterns, labels, price tags, buttons, belts, trimming

and embellishments required for export, as part of their

passenger baggage without a Licence/certificate/permission/

Authorisation.

parts and accessories, containers meant for packing of goods

for exports, jigs, fixtures, dies and moulds may be imported

for export without a Licence/certificate/permission/

Authorisation on execution of Legal Undertaking/Bank

Guarantee with the Customs Authorities provided that the item

is freely exportable without any conditionality/requirement

of Licence/ permission as may be required under ITC(HS)

Schedule II.

ITC (HS) may be sent abroad for repairs, testing, quality

improvement or upgradation or standardization of technology

and re-imported without a Licence/certificate/permission/

Authorisation.

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goods including capital goods provided they have been used

for at least one year.

subject to this Policy or any other law for the time being in

force.

Licence/ certificate/ permission issued subsequently.

otherwise specifically stated, the importer shall execute

a Legal Undertaking (LUT)/Bank Guarantee (BG)/ Bond

with the Customs Authority before clearance of goods

through the Customs, in the manner as may be

prescribed. In case of indigenous sourcing, the Licence/

certificate/ permission holder shall furnish LUT / BG /

Bond to the licensing authority before sourcing the

material from the indigenous supplier/nominated

agency.

and have a good track record of three years of exports

will be exempted from furnishing a BG for any of

the schemes under this Policy and may furnish a LUT in

lieu of BG.

conditions of notification issued by Department of

Revenue.

Any person may import goods except prohibited items,

arms and ammunition, hazardous waste and chemicals

and warehouse them in such private/public bonded

warehouses.

Such goods may be cleared for home consumption in

accordance with the provisions of this Policy and against

Licence/certificate/ permission, wherever required. Customs

duty as applicable shall be paid at the time of clearance of

such goods.

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If such goods are not cleared for home consumption within a

period of one year or such extended period as the custom

authorities may permit, the importer of such goods shall reexport

the goods.

the extent such exports are regulated by ITC(HS) or any other

provision of this Policy or any other law for the time being in

force.

The Director General of Foreign Trade may, however, specify

through a public notice such terms and conditions according

to which any goods, not included in the ITC(HS), may be

exported without a licence/ certificate/ permission.

by the provisions given in Handbook (Vol.1).

after the passenger’s departure from India. However, items

mentioned as Restricted in ITC(HS) shall require a Licence/

certificate/permission/Authorisation.

Rs.5,00,000/- in a licensing year, may be exported as a gift.

However, items mentioned as restricted for exports in ITC(HS)

shall not be exported as a gift, without a Licence/certificate/

permission/Authorisation.

equipment, machinery, automobiles or any other goods, except

those restricted under ITC (HS), may be exported along with

the main equipment or subsequently but within the contracted

warranty period of such goods subject to approval of RBI.

under the Policy.

Licence/certificate/permission/Authorisation provided that the

item to be imported or exported is not mentioned as restricted

for import or export in the ITC(HS).

Exports of such goods imported against payment in freely

convertible currency would be permitted against payment in

freely convertible currency.

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2.36 Goods, including those mentioned as restricted item for import

(except prohibited items) may be imported under Customs

Bond for export in freely convertible currency without a

licence/ certificate/ permission provided that the item is

freely exportable without any conditionality/ requirement of

Licence/permission as may be required under ITC (HS)

Schedule II.

charge by the exporter and such goods shall be allowed

clearance by the customs authorities provided that the

replacement goods are not mentioned as restricted items for

exports in ITC(HS).

unfit for use may be imported for repair and subsequent reexport.

Such goods shall be allowed clearance without a licence/

certificate/permission and in accordance with customs

notification issued in this behalf.

Such warehouses shall be entitled to procure the goods from

domestic manufacturers without payment of duty. The supplies

made by a domestic supplier to the notified warehouses shall

be treated as physical exports provided the payments for the

same are made in free foreign exchange.

proceeds shall be realised 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 resident bank situated in any country

other than a member country of ACU or Nepal or Bhutan.

Additionally, the rupee payment through the Vostro account

must be against payment in free foreign currency by the buyer

in his non resident bank account. The free foreign exchange

remitted by the buyer to his non resident bank (after deducting

the bank service charges) on account of this transaction would

be taken as the export realization under the export promotion

schemes of this Policy.

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Contracts for which payments are received through the Asian

Clearing Union (ACU) shall be denominated in ACU Dollar.

The Central Government may relax the provisions of this

paragraph in appropriate cases. Export contracts and Invoices

can be denominated in Indian rupees against EXIM Bank/

Government of India line of credit.

prejudice to any liability or penalty under any law for the time

being in force, be liable to action in accordance with the

provisions of the Act, the Rules and Orders made there under

and the provisions of this Policy.

Central/State Government. In case of any doubt,

the authorities concerned may ask for an undertaking

from the exporter.

as to disrupt the manufacturing activity and delivery schedule

of export goods. In exceptional cases, the concerned agency

may seize the stock on the basis of prima facie evidence.

However, such seizure should be lifted within 7 days.

Council is responsible for the promotion of a particular

group of products, projects and services. The list of the

councils, and their main functions are given in Handbook

(Vol.1).

as restricted items in ITC(HS)] or (ii) any other benefit or

concession under this policy shall be required to furnish

Registration-cum-Membership Certificate (RCMC) granted

by the competent authority in accordance with the procedure

specified in the Handbook (Vol.1) unless specifically exempted

under the Policy.

2.45 Deleted

documents using international best practices. As a step in this

direction DGFT shall move towards an automated

environment for electronic filing, retrieval and authentication

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of documents based on agreed protocols and message

exchange with other community partners including Customs

and Banks.

available with a minimum time lag in a query based structured

format on a commercial criteria.

(Vol.I).

and Customs to decide such cases also with effect from

01.04.2005.

license/certificate issued by the other Government departments

based on the verification of the export documents Like

shipping bill, bank realization certificate, Packing list, bill of

lading etc .and will not insist upon fresh submission of these

documents.

BTP remission of service tax levied shall be allowed.

depends on clean, transparent and accountable delivery

systems.

commitment to serve importers and exporters. It also gives

time schedules for providing services to clients, and details

of grievance committees at different levels.

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put in place by a Government Resolution.

The Government is committed to resolving all outstanding

problems and disputes pertaining to the past policy periods

through the Grievance Redressal Committee set up on

27.10.2004, for condoning delays, regularizing breaches by

exporters in bonafide cases, resolving disputes over

entitlements, granting extensions for utilization of Licences

etc.

2.49.3 Deleted

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Suitable provision has been made in the Annual Plan of the

Department of Commerce for allocation of funds to the States

on the twin criteria of gross exports and the rate of growth of

exports.

The States shall utilise this amount for developing

infrastructure such as roads connecting production centers with

the ports, setting up of Inland Container Depots and Container

Freight Stations, creation of new State level export promotion

industrial parks/zones, augmenting common facilities in the

existing zones, equity participation in infrastructure projects,

development of minor ports and jetties, assistance in setting

up of common effluent treatment facilities, stabilizing power

supply and any other activity as may be notified by Department

of Commerce from time to time.

export promotion efforts with a sharp focus on a country and

product.

The financial assistance is available for Export Promotion

Councils, Industry and Trade Associations, Agencies of State

Governments, Indian Commercial Missions abroad and other

eligible entities as may be notified from time to time.

A whole range of activities can be funded under the MAI

scheme. These include market studies, setting up of

showroom/ warehouse, sales promotion campaigns,

international departmental stores, publicity campaigns,

participation in international trade fairs, brand promotion,

registration charges for pharmaceuticals and testing charges

for engineering products etc. Each of these export promotion

activities can receive financial assistance from the Government

ranging from 25% to 100% of the total cost depending upon

the activity and the implementing agency, as indicated in the

detailed guidelines. The full text of the guidelines can be seen

at http://commerce.nic.in.

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councils, industry and trade associations on a regular basis

every year.

As per the revised MDA guidelines, assistance under MDA is

available for exporters with annual export turnover upto

Rs 10 crores.

These include participation in Trade Fairs and Buyer Seller

meets abroad or in India, export promotion seminars etc.

Further, assistance for participation in Trade Fairs abroad and

travel grant is available to such exporters if they travel to

countries in one of the four Focus Areas, such as, Latin

America, Africa, CIS Region, ASEAN countries, Australia

and New Zealand.

For participation in trade fairs etc., in other areas financial

assistance without travel grant is available.

handsomely to India’s exports. It is necessary to grant

recognition to these industrial clusters with a view to

maximizing their potential and enabling them to move higher

in the value chain and tap new markets.

Selected towns producing goods of Rs. 1000 crore or more

will be notified as Towns of Exports Excellence on the basis

of potential for growth in exports. However for the Towns of

Export Excellence in the Handloom, Handicraft, Agriculture

and Fisheries sector, the threshold limit would be Rs 250

crores.

Common service providers in these areas shall be entitled for

the facility of the EPCG scheme.

The recognized associations of units will be able to access

the funds under the Market Access Initiative scheme for

creating focused technological services.

Further such areas will receive priority for assistance for

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rectifying identified critical infrastructure gaps from the

ASIDE scheme.

The notified towns of export excellence are listed in Appendix 7.

for their products. The Central Government will extend

support and assistance to Trade and Industry to launch a

nationwide programme on quality awareness and to promote

the concept of total quality management.

upgradation of test houses and laboratories in order to bring

them at par with international standards.

General of Foreign Trade shall investigate quality complaints

received from foreign buyers. The guidelines for settlement

of quality complaints, in particular, and such other complaints,

in general, are given in Appendix-16 of Handbook of

Procedures (Vol. I).

been made in a manner that

(i) is gravely prejudicial to the trade relations of India

with any other country; and/or

(ii) is gravely prejudicial to the interest of other persons

engaged in exports or imports; and/or

(iii) has brought disrepute to the country;

The Director General Foreign Trade may take action against

the exporter or importer concerned in accordance with the

provisions of the Act, the Rules and Orders made thereunder

and this Policy.

Providers, Export Oriented Units (EOUs) and Units located

in Special Economic Zones (SEZs), Agri Export Zone

(AEZ’s), Electronic Hardware Technology Parks (EHTPs),

Software Technology Parks (STPs) and Bio Technology Parks

(BTPs) shall be eligible for applying for status as Star Export

Houses.

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(FOR - for deemed exports) export performance during the

current plus the previous three years:

Category Performance

(Rupees in Crores)

One Star Export House 15

Two Star Export House 100

Three Star Export House 500

Four Star Export House 1500

Five Star Export House 5000

Note 1. Exporters in the Small Scale Industry/Tiny Sector/

Cottage Sector, Units registered with KVICs/

KVIBs, Units located in North Eastern States,

Sikkim and J&K, Units exporting handloom/

handicrafts/hand knotted or silk carpets, exporters

exporting to countries in Latin America/CIS/sub-

Saharan Africa as listed in Appendix-9, Units having

ISO 9000 (series)/ ISO 14000 (series) /WHOGMP/

HACCP/SEI CMM level-II and above status

granted by agencies listed in Appendix-6, exports

of services and exports of agro products shall be

entitled for double weightage on exports made for

grant of Star Export House status. The Double

Weightage shall be admissible to Merchant as well

as Manufacturer Exporters. However, a shipment

can get double weightage only once in any one of

the above categories.

1(a) Transfer of export performance from one to

another is not permitted. Therefore disclaimer

system shall not be allowed for counting of export

turnover.

2. Exports made on re-export basis shall not be

counted for the purpose of recognition.

3. Exports made by a subsidiary of a limited company

shall be counted towards export performance of the

limited company for the purpose of recognition only

if the limited company has a majority share holding

in the subsidiary company.

4. Recognition of One Star Export House status shall

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be considered only in case the exporter has

minimum export performance of Rs. 15 Crores or

more during any two years out of the current and

preceding three years.

facilities:

i) Authorisation/Licence/certificate/permissions and

Customs clearances for both imports and exports

on self-declaration basis;

ii) Fixation of Input-Output norms on priority within

60 days;

iii) Exemption from compulsory negotiation of

documents through banks. The remittance, however,

would continue to be received through banking

channels;

iv) 100% retention of foreign exchange in EEFC

account;

v) Enhancement in normal repatriation period from

180 days to 360 days;

vi) Deleted

vii) Exemption from furnishing of Bank Guarantee in

Schemes under this Policy.

viii) Two Star Export Houses and above shall be

permitted to establish Export Warehouses, as per

the guidelines issued by Department of Revenue in

this regard.

shall be valid from 1st April of the licensing year during which

the application for the grant of such recognition is made upto

On the expiry of status certificate, application for grant of

status shall be required to be made within a period as

prescribed in the Handbook of Procedures (Vol. I), as a fresh

application for continued recognition. During the intervening

period, the star export house shall be eligible to claim the

usual privileges under Para 3.5.2.1 above, subject to furnishing

of an undertaking by the applicant at the time of claiming

such facilities and benefits that they are eligible for continued

recognition as per current policy.

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the General Agreement on Trade in Services where payment

for such services is received in free foreign exchange or in

Indian Rupees which are otherwise considered as having been

paid for in free foreign exchange by RBI. A list of services is

given in Appendix-10 of Handbook of Procedures (Vol. I).

All provisions of this Policy shall apply mutatis mutandis to

export of services as they apply to goods, unless otherwise

specified.

software exporters shall register themselves with Electronic

and Software Export Promotion Council.

In order to give proper direction, guidance and encouragement

to the Services Sector, an exclusive Export Promotion Council

for Services shall be set up.

The Services Export Promotion Council shall:

(i) Map opportunities for key services in key markets

and develop strategic market access programmes

for each component of the matrix.

(ii) Co-ordinate with sectoral players in undertaking

intensive brand building and marketing programmes

in target markets.

(iii) Make necessary interventions with regard to

policies, procedures and bilateral/ multilateral

issues, in co-ordination with recognised nodal

bodies of the services industry.

particularly in areas like Engineering & Architectural

design, Multi-media operations, Software developers etc.,

in State and District-level towns, to draw in a vast

multitude of home-based professionals into the services export

arena.

so as to create a powerful and unique ‘Served From India’

brand, instantly recognized and respected world over.

33

Handbook of Procedures (Vol. I) who have a total foreign

exchange earning or earning in Indian Rupees which are

otherwise considered as having been paid for in free foreign

exchange by RBI, of at least Rs.10 lakhs in the preceding or

current financial year shall be eligible to qualify for a duty

credit scrip.

For individuals who are service providers of services listed in

Appendix-10 of Handbook of Procedures (Vol. I), the total

foreign exchange earned or earning in Indian Rupees which

are otherwise considered as having been paid for in free foreign

exchange by RBI criteria would be Rs.5 lakhs in the preceding

financial year.

Service providers as well as Engineering Process Outsourcing

(EPO) and Knowledge Process Outsourcing (KPO) service

providers; of services listed in Appendix-10 of Handbook of

Procedures (Vol. I) (other than service providers covered by

Para 3.6.4.4) shall be entitled to duty credit scrip equivalent

to 10% of the foreign exchange earned by them in the

preceding financial year. However services or service

providers as listed in Para 3.18.1 of Handbook of Procedures

(Vol. I) shall not be entitled for benefits under the scheme.

Cards and other instruments as permitted by RBI for rendering

of service by the service providers shall also be taken into

account for the purposes of computation of duty credit

entitlement under the scheme.

heritage hotels) approved by the Department of Tourism and

other Service providers in the tourism sector registered with

the Department of Tourism shall be entitled to duty credit

equivalent to 5% of the foreign exchange earned by them in

the preceding financial year.

Stand-alone restaurants will be entitled to duty credit

equivalent to 10% of the foreign exchange earned by them in

the preceding financial year.

including spares, office equipment and professional

equipment, office furniture and consumables; that are

otherwise freely importable under ITC (HS) Classification of

Export and Import items. The imports shall relate to any

service sector business of the applicant.

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Utilization of duty credit earned under the scheme shall

not be permitted for payment of duty in case of import of

vehicles, even if such vehicles are freely importable under

ITC (HS).

In the case of hotels, golf resorts and stand-alone restaurants

having catering facilities, the duty credit entitlement may also

be used for the import of consumables including food items

and alcoholic beverages.

However, transfer of duty credit scrips / goods imported under

the scheme shall be allowed within the service providers of

the Group Company as defined in chapter 9 and managed

hotels, with actual user condition.

from time to time the category or type of service exports which

shall not be eligible for calculation of either eligibility or of

entitlement.

Similarly, Government may from time to time also notify the

goods, which shall not be allowed for import under the duty

free entitlement certificate issued under the scheme.