Extension in the Export Obligation period of specified Advance and EPCG Authorisations till 31.12.2021 reg.

## Policy Analysis Report: Amendment to Foreign Trade Policy 2015-2020 Regarding Export Obligation Periods **1. Executive Summary:** This report analyzes an amendment to the Foreign Trade Policy (FTP) 2015-2020, specifically concerning the extension of Export Obligation (EO) periods for Advance Authorizations and EPCG Authorizations. The amendment, detailed in Notification No. 28/2015-2020 dated September 23, 2021, offers a one-time extension of the EO period until December 31, 2021, for authorizations expiring between August 1, 2020, and July 31, 2021. This extension is granted without composition fees but is subject to an additional 5% export obligation in free foreign exchange. The report outlines the rationale, key changes, target audience, implementation aspects, and expected outcomes of this amendment. **2. Introduction:** This report provides an informative analysis of a specific amendment to the Foreign Trade Policy 2015-2020. The analysis is based solely on the official policy text provided, focusing on the changes related to the extension of Export Obligation periods for certain Advance and EPCG Authorizations. The purpose of this report is to provide a clear and concise understanding of the amendment to affected industry stakeholders. **3. Policy Overview:** * **Amendment:** This document details an amendment to the Foreign Trade Policy 2015-2020. The original policy is referenced indirectly through Paragraph 1.02 of the Foreign Trade Policy, 2015-20. * **Core Objective(s):** Based on the text, the core objective of this amendment appears to be to provide relief to exporters holding Advance and EPCG Authorizations whose Export Obligation periods expired or are expiring during a specific period (August 1, 2020, to July 31, 2021), likely due to disruptions, and to encourage continued export activity by offering an extension subject to a higher export obligation. **4. Background and Rationale:** This amendment likely addresses disruptions or challenges faced by exporters during the period between August 1, 2020, and July 31, 2021. The offer of extending the EO period suggests the government recognizes potential difficulties in meeting existing export obligations within the original timelines, offering a limited-time option to fulfill these obligations, incentivized by a 5% additional export obligation. **5. Key Provisions / Changes:** This section focuses specifically on the changes introduced by the provided amendment text. * **Specific Part of Original Policy Being Changed:** The amendment adds sub-paragraphs to the "Hand Book of Procedure 2015-2020" (HBP). Specifically, sub-paragraph 4.42 j is added after 4.42i (related to Advance Authorizations), and sub-paragraph 5.17 f is added after 5.17 e (related to EPCG Authorizations). * **New Rule/Provision:** The amendment introduces the following key provision for both Advance and EPCG Authorizations: * For authorizations where the original or extended EO period is expiring between 01.08.2020 and 31.07.2021, the EO period is extended until 31.12.2021 without any composition fees. * This extension is subject to a 5% additional export obligation in value terms in free Foreign Exchange on the balance Export Obligation on the date of expiry of the original/extended export obligation period. * The option to avail EO extensions with payment of composition fees under existing paragraphs remains available as per eligibility. * Refund of composition fees will not be permitted in cases where authorization holders have already obtained EO extension upon the payment of composition fee. * **Difference/Effect of Change:** * The amendment offers a *new* option for EO extension *without* composition fees, but *with* an increased export obligation of 5%. This is in *addition* to the existing option of extending the EO period by *paying* composition fees. * It creates a temporary window of opportunity for exporters facing challenges in meeting their EO to extend the period, albeit with a higher export target. * It clarifies that if an exporter already availed of EO extension with composition fees, they are not eligible for a refund of those fees. **6. Target Audience and Stakeholders:** The primary target audience and stakeholders are: * Holders of Advance Authorizations whose original or extended EO period is expiring between August 1, 2020, and July 31, 2021. * Holders of EPCG Authorizations whose original or extended EO period is expiring between August 1, 2020, and July 31, 2021. * Customs authorities involved in allowing exports and verifying EO fulfillment. * Regional Authorities (RA) responsible for EODC (Export Obligation Discharge Certificate)/Closure/Regularization. **7. Implementation Aspects (Inferred):** * **Responsible Agency/Bodies:** Directorate General of Foreign Trade (DGFT), Customs authorities, and Regional Authorities (RA) are involved in implementing this amendment. * **Timelines/Procedures:** The amendment explicitly sets the extension period until December 31, 2021, for eligible authorizations. The customs authorities will allow exports based on the provisions of this notification. The RAs will verify EO fulfillment details at the time of EODC/Closure/Regularization. The Notification states that Authorisation Holders need not approach RA or make any application to avail this benefit. **8. Expected Outcomes / Impact of Changes:** * The likely intended outcome is to provide immediate relief to exporters struggling to meet their export obligations due to disruptions that occurred between August 2020 and July 2021. * The amendment aims to incentivize increased export activity by imposing a 5% additional export obligation, potentially boosting overall exports. * The clarification regarding the non-refund of composition fees ensures fairness and prevents retrospective claims. * The overall impact is expected to be positive for exporters facing genuine difficulties, enabling them to meet their obligations and contribute to the country's export performance. **9. Conclusion:** The amendment to the Foreign Trade Policy 2015-2020, as detailed in Notification No. 28/2015-2020, offers a valuable, albeit conditional, extension of the Export Obligation period for Advance and EPCG Authorizations. By providing an extension without composition fees, subject to an increased export obligation, the amendment addresses challenges faced by exporters and encourages continued export activity. This one-time measure is expected to have a positive impact on the export sector, offering much needed flexibility and encouraging the fulfillment of export obligations during this critical period.

Key Entities Referenced