Export & Import - Importing to India - Import Policy
IMPORT POLICY
The economic needs of the country, effective use of foreign exchange and industrial as well as consumer requirements are the basic factors which influence India's import policy. On the import side the policy has three objectives:
1. to make necessary imported goods more easily available, including essential capital goods for modernizing and upgrading technology;
2. to simplify and streamline procedures for import licensing;
3. to promote efficient import substitution and self-reliance.
There are only 4 prohibited goods: tallow fat, animal rennet, wild animals and unprocessed ivory. There is a restricted list, but most of the restrictions are on grounds of security, health and environmental protection or because the goods are reserved for production by small and tiny enterprises, which are home-based or village-based and which require low skills and employ a large number of people. But the policy of restricting import of consumer goods is changing.
The Indian government's clearly laid down policy is to achieve, through a series of progressive steps, the average tariff levels prevalent in the ASEAN region. The basic customs tariff rate now ranges from 0 to 40% plus additional duty of 2%; the average rate is about 30%.
Imports are allowed free of duty for export production under a duty exemption scheme. Input-output norms have been specified for more than 4200 items. These norms specify the amount of duty-free import of inputs allowed for specified products to be exported.
There are no quantitative restrictions on imports of capital goods and intermediates. Import of second-hand capital goods is permitted provided they have a minimum residual life of 5 years. There is an Export Promotion Capital Goods (EPCG) Scheme under which exporters are allowed to import capital goods (including computer systems) at concessionary customs duty, subject to fulfillment of specified export obligations. Service industries enjoy the facility of zero import duty under the EPCG Scheme. Likewise, hospitals, air cargo, hotels and other tourism-related industries. Software units can use data communication network to export their products.
Export & Import - Importing to India - Foreign Exchange
FOREIGN EXCHANGE REGIME
4. General The Reserve Bank of India administers exchange controls in accordance with the Government's policy designed to maintain general control over the foreign exchange situation, particularly outgoing financial flows. The Foreign Exchange Regulation Act (FERA), 1973 confers powers to the Reserve Bank of India concerning foreign exchange control. General or specific permission is required from the Reserve Bank of India for all foreign exchange transactions.
Foreign companies operating in India are governed by the 1973 Foreign Exchange Regulation Act (FERA), which sets guidelines for bank accounts, loans, foreign exchange trading and the remittance of dividends and profits.
In March 1993, the government ended certain FERA restrictions on domestic borrowing, trading and acquisition of immovable property by companies with more than 40% foreign equity. Residents may use up to 25% of foreign exchange earnings to maintain a foreign currency bank account in India. Foreign employees, liaison offices, project offices and branches of foreign companies may open and use a resident bank account in Indian currency provided that they have approval by the Reserve Bank for operations in India.
Exporters who have net foreign exchange earnings of a certain level can maintain a foreign currency account outside of India. The sale of foreign exchange or rupee transfers to non-resident accounts in payment for imports may be made by authorized dealers. Persons, firms and banks (other than authorized banks) must apply to an authorized dealer on form A1 "Application for remittance in foreign currency" to pay for imported goods. In certain cases, additional questionnaire forms or supporting letters may be required along with form A1.
5. Currency convertibility In August 1994, the rupee was made fully convertible on the current account. Rupee convertibility on the trade account is restricted by the negative list of imports and exports and limited to those involved in trade. All export and import transactions are conducted at the market rate of exchange. This applies as well to other transactions, such as inflow of foreign equity for investment, outflows in the case of disinvestment, payments in respect of repatriation of dividends, fees and royalties for technical know-how and for foreign travel.
6. Banking The financial sector in India is controlled by the state. As a result of past nationalizations, the government controls some 90% of the assets of the banking and finance sectors. The Reserve Bank, India's central banking institution, supervises all banking operations in the country. Its tasks involve the following:
· regulation of the availability of funds to the banking sector by adjusting bank rates, imposing reserve requirements and engaging in open-market securities operation;
· credit control through bank lending to the commercial sector;
· approval for short-term loans and overdrafts secured by guarantees from parent or affiliate companies.
However, the Indian government is expected to continue liberalization of the financial sector. The Reserve Bank has permitted the establishment of new domestic banks, and foreign banks are being encouraged to open new branches.
The Asian Clearing Union (ACU) was established in 1974 under the auspices of the Economic and Social Commission for Asia and the Pacific as a mechanism for settlement of payments among participating countries' central banks. The Reserve Bank of India is one of the original participants. The other participants are Bangladesh, the Islamic Republic of Iran, Nepal, Pakistan, Sri Lanka and Myanmar.
All authorized banks in India can handle transactions cleared through the Asian Clearing Union, and there is a specific A1 form to cover remittances for imports through the Asian Clearing Union. It is compulsory that all eligible payments among participants be settled through the Asian Clearing Union
Export & Import - Imports to India- Regulations and Procedures
REGULATIONS AND PROCEDURES
All imports now fall into one of the following four categories:
7. freely importable items; Most capital goods fall into this category. Items in this category do not require import licences and may be freely imported by any individual or entity.
8. licensed imports; Certain items can be imported only with licences and only by actual users. The current "negative list" of items in this category includes several broad product groups that are classified as consumer goods; precious and semi-precious stones; products related to safety and security; seeds, plants and animals; some insecticides, pharmaceuticals and chemicals; some electronical items; several items reserved for production by the small-scale sector; and 17 miscellaneous or special-category items. In April 1993 the government ended licensing requirements for several agricultural items, including prawns, shrimp and poultry feed.
9. canalised items; Items under this category can be imported only by specified public-sector agencies. These include petroleum products (to be imported only by the Indian Oil Corporation); nitrogenous phosphatic, potassic and complex chemical fertilizers (by the Minerals and Metals Trading Corporation) vitamin- A drugs (by the State Trading Corporation); oils and seeds (by the State Trading Corporation and Hindustan Vegetable Oils); and cereals (by the Food Corporation of India).
10. prohibited items; Only three items-tallow fat, animal rennet and unprocessed ivory-are completely banned from importation
:icon1: :icon1: :icon1: :icon1: :icon1:
From India, Bangalore
IMPORT POLICY
The economic needs of the country, effective use of foreign exchange and industrial as well as consumer requirements are the basic factors which influence India's import policy. On the import side the policy has three objectives:
1. to make necessary imported goods more easily available, including essential capital goods for modernizing and upgrading technology;
2. to simplify and streamline procedures for import licensing;
3. to promote efficient import substitution and self-reliance.
There are only 4 prohibited goods: tallow fat, animal rennet, wild animals and unprocessed ivory. There is a restricted list, but most of the restrictions are on grounds of security, health and environmental protection or because the goods are reserved for production by small and tiny enterprises, which are home-based or village-based and which require low skills and employ a large number of people. But the policy of restricting import of consumer goods is changing.
The Indian government's clearly laid down policy is to achieve, through a series of progressive steps, the average tariff levels prevalent in the ASEAN region. The basic customs tariff rate now ranges from 0 to 40% plus additional duty of 2%; the average rate is about 30%.
Imports are allowed free of duty for export production under a duty exemption scheme. Input-output norms have been specified for more than 4200 items. These norms specify the amount of duty-free import of inputs allowed for specified products to be exported.
There are no quantitative restrictions on imports of capital goods and intermediates. Import of second-hand capital goods is permitted provided they have a minimum residual life of 5 years. There is an Export Promotion Capital Goods (EPCG) Scheme under which exporters are allowed to import capital goods (including computer systems) at concessionary customs duty, subject to fulfillment of specified export obligations. Service industries enjoy the facility of zero import duty under the EPCG Scheme. Likewise, hospitals, air cargo, hotels and other tourism-related industries. Software units can use data communication network to export their products.
Export & Import - Importing to India - Foreign Exchange
FOREIGN EXCHANGE REGIME
4. General The Reserve Bank of India administers exchange controls in accordance with the Government's policy designed to maintain general control over the foreign exchange situation, particularly outgoing financial flows. The Foreign Exchange Regulation Act (FERA), 1973 confers powers to the Reserve Bank of India concerning foreign exchange control. General or specific permission is required from the Reserve Bank of India for all foreign exchange transactions.
Foreign companies operating in India are governed by the 1973 Foreign Exchange Regulation Act (FERA), which sets guidelines for bank accounts, loans, foreign exchange trading and the remittance of dividends and profits.
In March 1993, the government ended certain FERA restrictions on domestic borrowing, trading and acquisition of immovable property by companies with more than 40% foreign equity. Residents may use up to 25% of foreign exchange earnings to maintain a foreign currency bank account in India. Foreign employees, liaison offices, project offices and branches of foreign companies may open and use a resident bank account in Indian currency provided that they have approval by the Reserve Bank for operations in India.
Exporters who have net foreign exchange earnings of a certain level can maintain a foreign currency account outside of India. The sale of foreign exchange or rupee transfers to non-resident accounts in payment for imports may be made by authorized dealers. Persons, firms and banks (other than authorized banks) must apply to an authorized dealer on form A1 "Application for remittance in foreign currency" to pay for imported goods. In certain cases, additional questionnaire forms or supporting letters may be required along with form A1.
5. Currency convertibility In August 1994, the rupee was made fully convertible on the current account. Rupee convertibility on the trade account is restricted by the negative list of imports and exports and limited to those involved in trade. All export and import transactions are conducted at the market rate of exchange. This applies as well to other transactions, such as inflow of foreign equity for investment, outflows in the case of disinvestment, payments in respect of repatriation of dividends, fees and royalties for technical know-how and for foreign travel.
6. Banking The financial sector in India is controlled by the state. As a result of past nationalizations, the government controls some 90% of the assets of the banking and finance sectors. The Reserve Bank, India's central banking institution, supervises all banking operations in the country. Its tasks involve the following:
· regulation of the availability of funds to the banking sector by adjusting bank rates, imposing reserve requirements and engaging in open-market securities operation;
· credit control through bank lending to the commercial sector;
· approval for short-term loans and overdrafts secured by guarantees from parent or affiliate companies.
However, the Indian government is expected to continue liberalization of the financial sector. The Reserve Bank has permitted the establishment of new domestic banks, and foreign banks are being encouraged to open new branches.
The Asian Clearing Union (ACU) was established in 1974 under the auspices of the Economic and Social Commission for Asia and the Pacific as a mechanism for settlement of payments among participating countries' central banks. The Reserve Bank of India is one of the original participants. The other participants are Bangladesh, the Islamic Republic of Iran, Nepal, Pakistan, Sri Lanka and Myanmar.
All authorized banks in India can handle transactions cleared through the Asian Clearing Union, and there is a specific A1 form to cover remittances for imports through the Asian Clearing Union. It is compulsory that all eligible payments among participants be settled through the Asian Clearing Union
Export & Import - Imports to India- Regulations and Procedures
REGULATIONS AND PROCEDURES
All imports now fall into one of the following four categories:
7. freely importable items; Most capital goods fall into this category. Items in this category do not require import licences and may be freely imported by any individual or entity.
8. licensed imports; Certain items can be imported only with licences and only by actual users. The current "negative list" of items in this category includes several broad product groups that are classified as consumer goods; precious and semi-precious stones; products related to safety and security; seeds, plants and animals; some insecticides, pharmaceuticals and chemicals; some electronical items; several items reserved for production by the small-scale sector; and 17 miscellaneous or special-category items. In April 1993 the government ended licensing requirements for several agricultural items, including prawns, shrimp and poultry feed.
9. canalised items; Items under this category can be imported only by specified public-sector agencies. These include petroleum products (to be imported only by the Indian Oil Corporation); nitrogenous phosphatic, potassic and complex chemical fertilizers (by the Minerals and Metals Trading Corporation) vitamin- A drugs (by the State Trading Corporation); oils and seeds (by the State Trading Corporation and Hindustan Vegetable Oils); and cereals (by the Food Corporation of India).
10. prohibited items; Only three items-tallow fat, animal rennet and unprocessed ivory-are completely banned from importation
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From India, Bangalore
Hi Pranjan,
This is GCM Worldwide!
If you require any assistance in Import - Export Consultancy, please let us know.
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Solution Clinic – Medicating the complications of your performance
For Import – Export procedures and Documentations, Export Incentives, Letter of Credit, Foreign Trade Policy, Duty Drawback, Advance License, EPCG and similar related areas. You will get solutions to the problems faced by you in this subject on the spot.
By - Mr. S.M. Chaturvedi
04th April’2013 at Hotel Sea Princess, Mumbai
06th Arpil’’2013 at Hotel Jaypee Siddharth, New Delhi
13th Arpil’’2013 at Hotel Adarsh Hamilton, Bangalore
Warm Regards,
Thanks & Regards,
For GCM Worldwide
Diksha Kapoor
Board Line: 011- 32642736 & 32488138 & 01127047690
From India, Delhi
This is GCM Worldwide!
If you require any assistance in Import - Export Consultancy, please let us know.
First Time in India – An Hour for Answers
Solution Clinic – Medicating the complications of your performance
For Import – Export procedures and Documentations, Export Incentives, Letter of Credit, Foreign Trade Policy, Duty Drawback, Advance License, EPCG and similar related areas. You will get solutions to the problems faced by you in this subject on the spot.
By - Mr. S.M. Chaturvedi
04th April’2013 at Hotel Sea Princess, Mumbai
06th Arpil’’2013 at Hotel Jaypee Siddharth, New Delhi
13th Arpil’’2013 at Hotel Adarsh Hamilton, Bangalore
Warm Regards,
Thanks & Regards,
For GCM Worldwide
Diksha Kapoor
Board Line: 011- 32642736 & 32488138 & 01127047690
From India, Delhi
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