Executive Summary:
This notification amends the Foreign Trade Policy (FTP) 2015-2020 with immediate effect, aligning it with RBI's A.P. DIR Series Circular No. 10 dated July 11, 2022. The amendments permit export benefits and fulfillment of Export Obligations for invoicing, payment, and settlement of exports and imports in Indian Rupees (INR).
Key Points / Main Content:
Import for Export:
Goods (new and second-hand) can be imported for export, provided the export is against freely convertible currency or as per Para 2.52(d)(ii) of FTP.
Goods imported against freely convertible currency can only be exported against freely convertible currency unless otherwise notified by DGFT. Goods imported under Para 2.52(d)(i) can only be exported against payments as per Para 2.52(d)(ii), unless otherwise notified by DGFT.
Export to Iran & Export Realizations in Indian Rupees:
Export proceeds realized in Indian Rupees against exports to Iran are permitted to avail export benefits and fulfillment of Export Obligations under the Foreign Trade Policy 2015-2020, at par with export proceeds realized in freely convertible currency, subject to compliance of para 2.18 of the FTP.
Export proceeds realized in Indian Rupees as per para 2.52(d)(ii) are permitted to avail export benefits and fulfillment of Export Obligations under the Foreign Trade Policy 2015-2020.
Status Holder:
All exporters of goods, services, and technology with an IEC number are eligible for recognition as a status holder based on export performance.
For the Gems and Jewellery sector, export performance during the current and previous two financial years will be considered for status recognition. Export performance will be counted on the basis of FOB of export earning in freely convertible foreign currencies or in Indian Rupees as per para 2.53 of the FTP.
Currency for Realisation of Export Proceeds:
Export proceeds shall be realized in freely convertible currency or in Indian Rupees as per para 2.53 of FTP, except otherwise specified. Provisions regarding realisation and non-realisation of export proceeds are given in paragraph 2.52, 2.53 and 2.54 of FTP.
Impact Analysis:
Exporters:
Impact: Can now avail export benefits and fulfill export obligations for invoicing, payment, and settlement of exports and imports in INR, in addition to freely convertible currency.
Action Required: Understand and comply with the revised guidelines for export proceeds realization in INR as per Para 2.53 of FTP and RBI's A.P. DIR Series Circular No. 10.
DGFT (Directorate General of Foreign Trade):
Impact: Responsible for implementing and overseeing the amended Foreign Trade Policy. May need to issue notifications clarifying the conditions for exports and imports in INR.
Action Required: Ensure that the necessary systems and procedures are in place to support the revised policy and provide guidance to exporters.
RBI (Reserve Bank of India):
Impact: Its A.P. DIR Series Circular No. 10 provides the basis for these amendments, related to invoicing, payment, and settlement of exports and imports in INR.
Action Required: Continue to monitor and regulate foreign exchange transactions, ensuring compliance with the relevant guidelines.
Gems and Jewellery Sector:
Impact: Benefits from amended criteria for status holder recognition, where export performance during the current and previous two financial years will be considered.
Action Required: Track and ensure compliance with the updated export performance criteria for Status Holder recognition, considering both freely convertible currencies and Indian Rupees as per Para 2.53 of the FTP.
Key Entities Referenced
Foreign Trade Policy 2015-2020: A policy document outlining guidelines and regulations for foreign trade, amended by this notification.
RBI A.P. DIR Series Circular No. 10 dated 11th July 2022: A circular issued by the Reserve Bank of India (RBI) regarding invoicing, payment and settlement of exports and imports in Indian Rupees (INR), which this notification aligns with.
Foreign Trade Development and Regulation Act, 1992: The act that confers powers to the Central Government to make amendments in the Foreign Trade Policy.
Directorate General of Foreign Trade (DGFT): The government agency responsible for implementing and regulating foreign trade policies in India.
Indian Rupee (INR): The official currency of India, relevant in the context of export proceeds and trade benefits as per the notification.
Iran: A country specifically mentioned in relation to export proceeds realized in Indian Rupees.
Minister of Commerce and Industry: The government minister whose approval was obtained for issuing this notification.
New Delhi: The location where the notification was issued. New Delhi, Delhi, India
ee
To be published in the Gazette of India Extraordinary Part-II, Section-3, Sub-Section (II)
Government of India
Ministry of Commerce & Industry
Department of Commerce
Directorate General of Foreign Trade
Notification No. 43 /2015-2020
New Delhi, Dated: 9" November, 2022
Subject: Amendments under the Foreign Trade Policy in syne with RBI A.P.(DIR Series)
Circular No.10 dated 11" July 2022
S.0.(E): In exercise of powers conferred by Section 5 of the Foreign Trade (Development and
Regulation) Act, 1992, read with paragraph 1.02 of the Foreign Trade Policy, 2015-2020, as
amended from time to time, the Central Government hereby makes the following amendments in
the Foreign Trade Policy 2015-20, with immediate effect, in sync with the RBI’s A.P. (DIR
Series) Circular No.10 dated 11" July, 2022:
SLIExisting Para Revised Para
1. | 2.46 Import for export 2.46 Import for export
I. (b) Goods, including capital goods I. (b) Goods, including capital goods (both new
(both new and second hand), may be and second hand), may be imported for export
imported for export provided: provided:
iii. Export is against freely convertible ili. Export isagainst freely convertible
currency. currency or as per 2.52(d)(ii) of FTP.
II. (a) Goods imported against payment I]. (a) Goods imported against payment in
in freely convertible currency would be freely convertible currency would be permitted
permitted for export only against for export only against payment in freely
payment in freely convertible currency, convertible currency, unless otherwise notified
unless otherwise notified by DGFT. by DGFT.Goods imported under Para
2.52(d)(i) would be permitted for exports only
against payments as per Para 2.52(d)(ii), unless
otherwise notified by DGFT.
2.| 2.53 Export to [ran —Realisations in 2.53 Applicability of FTP Schemes for
Indian Rupees to be eligible for FTP Export Realisations in Indian Rupees
benefits / incentives
(i) Export proceeds realized in Indian Rupees
Notwithstanding the provisions against exports to Iran are permitted to avail
contained in para 2.52 (a) above, export exports _ benefits/fulfilment of Export
proceeds realized in Indian Rupees Obligations under the Foreign Trade Policy
against exports to Iran are permitted to (2015-20), at par with export proceeds realized
avail exports benefits / incentives under in freely convertible currency, subject to
the Foreign Trade Policy (2015-20), at compliance of para 2.18 of the FTP.
par with export proceeds realized in
(ii) Export proceeds realized in Indian Rupees
freely convertible currency.
as per para 2.52(d)(ii) are permitted to avail
exports _ benefits/fulfilment of Export
Obligations under the Foreign Trade Policy
(2015-20).
aall 3.20 Status Holder
3.20 Status Holder
(b) All exporters of goods, services and b) All exporters of goods, services and
technology having an import-export technology having an import-export code
code (IEC) number shall be eligible for (IEC) number shall be eligible for recognition
recognition as a_ status holder. as a status holder.
Status recognition will depend on export Status recognition will depend on export
performance. An applicant shall be performance. An applicant
categorized as status holder on shall be categorized as status holder on
achieving export performance during achieving export performance during the
the current and previous three financial current and previous three financial years (for
years (for Gems & Jewellery Sector the Gems & Jewellery Sector the performance
performance during the current and during the current and previous two financial
previous two financial years shall be years shall be considered for recognition as
considered for recognition as status status holder) as indicated in paragraph 3.21 of
holder) as indicated in paragraph 3.21 of Foreign Trade Policy. The export performance
Foreign Trade Policy. The export will be counted on the basis of FOB of export
performance will be counted on the earning in freely convertible foreign currencies
basis of FOB of export earning in freely or in Indian Rupees as per para 2.53 of the
convertible foreign currencies. FIP,
*| 4.21 Currency for Realisation of
4.21 Currency for Realisation of Export
Export Proceeds Proceeds
(i) Export proceeds shall be realized in (i) Export proceeds shall be realized in freely
freely convertible currency except convertible currency or in Indian Rupees as per
otherwise specified. Provisions para 2.53 of FTP, except otherwise specified.
regarding realisation and non-realisation Provisions regarding realisation and non-
of export proceeds are given in realisation of export proceeds are given in
paragraph 2.52, 2.53 and 2.54 of FTP. paragraph 2.52, 2.53 and 2.54 of FTP.
Effect of this Notification: Amendments under FTP are notified, to permit exports benefits /
fulfilment of Export Obligations for Invoicing, payment and settlement of exports and imports in
INR, as per RBI’s A.P. (DIR Series) Circular No. 10 dated 11" July, 2022. This shall come into
force with immediate effect.
This issues with the approval of Minister of Commerce & Industry.
Cc
a“
(Santosh Kumar Sarangi)
Director General of Foreign Trade &
Ex-officio Addl. Secretary to the Government of India
E-mail: dgft@nic.in
[File No. 01/93/180/32/AM-19/PC.II(B/E-17430]