Date: 2022-11-25Category: Extra OrdinaryState: Union GovernmentCountry: India
Fixation of new Standard Input Output Norms at E 136 for export of wheat flour (Atta), deletion of SION E 110, amendment in Appendix 4J and insertion of new para 4.05 (iii) under Handbook of Procedures 2015 20.
## Policy Analysis Report: Amendments to Foreign Trade Policy Regarding Wheat Flour Exports
**1. Executive Summary:**
This report analyzes amendments to the Foreign Trade Policy (FTP) 2015-2020, specifically those pertaining to the export of wheat flour (Atta) under the Advance Authorization (AA) Scheme. The core purpose of these amendments is to allow the export of wheat flour under strict conditions, primarily pre-import requirements for wheat and limitations on domestic sourcing. Key changes include the deletion of SION E110, the insertion of a new SION E136 for wheat flour, and the imposition of stringent conditions on AAs issued for this purpose. These amendments are intended to regulate wheat flour exports, likely in response to changing market dynamics or export restrictions on wheat itself.
**2. Introduction:**
This report aims to provide a comprehensive analysis of the recent amendments to the Foreign Trade Policy (FTP) 2015-2020, focusing on modifications related to the export of wheat flour (Atta). The analysis is based solely on the provided government policy text (Public Notice No. 38/2015-2020, dated November 25, 2022).
**3. Policy Overview:**
This report concerns amendments to the existing Foreign Trade Policy (FTP) 2015-2020. The core objective, as inferred from the text, is to facilitate and regulate the export of wheat flour (Atta) under specific conditions within the Advance Authorization Scheme.
**4. Background and Rationale:**
This amendment likely arises from a need to manage wheat and wheat flour exports in light of potential supply constraints or price fluctuations. The introduction of stringent pre-import conditions and restrictions on domestic sourcing suggests a policy response to ensure that exports are supported by imported wheat, thereby minimizing the impact on domestic wheat availability and potentially controlling export volumes. The prohibition of domestic tariff area (DTA) procurement reinforces this interpretation.
**5. Key Provisions / Changes:**
The provided text introduces the following key changes:
* **Deletion of SION E110:** This standard input-output norm (SION) is removed, indicating a previous policy or guideline concerning a particular export item (likely wheat related) is no longer applicable.
* **Insertion of New SION E136 for Wheat Flour (Atta):** This is a significant change. The new SION specifies that for every 1.00 Kg of Wheat Flour (Atta) exported, 1.07 Kg of Wheat must be imported. This establishes a specific input-output requirement for wheat flour exports under the AA scheme. The text clarifies that "wheat flour atta implies to whole wheat flour atta."
* **Conditions on Advance Authorization (AA) under SION E136:**
* AAs will *only* be issued to flour millers. This targets the change to affect only a specific, related industry
* AAs will be issued with a "pre-import condition," meaning wheat must be imported *before* the flour is exported.
* The SION is valid only while wheat exports are *not* prohibited. Once wheat exports are banned, no new AAs will be issued under this SION. Existing AAs remain valid.
* Customs authorities must verify that the Bills of Entry for imported wheat match the exported wheat flour. This is a clear control measure.
* Procurement of wheat from the Domestic Tariff Area (DTA) is *not permitted* against the AA.
* **Amendment to Appendix 4J:** Wheat is subject to an export obligation period of 180 days from the date of clearance of each import consignment.
* **New Sub-para 4.05 (iii):** Export of wheat flour is only permitted under the AA scheme with the pre-import condition of wheat under the notified SION. Domestic sourcing is *not permitted*, and invalidation letter/ARO facility is not available. Third-party exports are also not allowed. Import and export must occur through EDI-enabled ports. The export obligation period is 180 days with no extensions. Imported wheat is subject to actual user conditions and cannot be transferred. Penalties for non-fulfillment of export obligations will be five times the CIF value of the imported material.
**6. Target Audience and Stakeholders:**
The primary target audience is **flour millers** engaged in the export of wheat flour. Other stakeholders include:
* Customs authorities: They are responsible for verifying imports and exports.
* The Directorate General of Foreign Trade (DGFT): They are responsible for implementing and overseeing the policy.
* Wheat importers and exporters.
**7. Implementation Aspects (Inferred):**
* **Responsible Agency:** The Directorate General of Foreign Trade (DGFT) is the primary responsible body, responsible for issuing AAs and monitoring compliance. Customs authorities play a crucial role in verifying imports and exports.
* **Timelines:** The SION's validity is tied to the export status of wheat. The export obligation period (EOP) is 180 days from the date of import clearance. No extensions to the EOP are allowed.
* **Procedures:** Flour millers must apply for AAs, adhering to the pre-import condition. Imports and exports must be conducted through EDI-enabled ports, suggesting a reliance on electronic data interchange systems.
**8. Expected Outcomes / Impact of Changes:**
The likely intended outcomes of these amendments are:
* **Controlled Wheat Flour Exports:** By linking wheat flour exports to prior wheat imports, the government aims to control the volume of exports and prevent the depletion of domestic wheat stocks.
* **Discouragement of Domestic Sourcing for Exports:** The prohibition of DTA procurement ensures that exports are supported by imported wheat and not subsidized by domestic supplies.
* **Increased Monitoring and Enforcement:** The involvement of customs authorities and the use of EDI-enabled ports suggest a focus on stricter monitoring and enforcement of export obligations.
**9. Conclusion:**
The amendments to the Foreign Trade Policy regarding wheat flour exports introduce significant changes to the Advance Authorization Scheme. The key takeaway is the implementation of strict pre-import conditions and the prohibition of domestic sourcing, signaling a policy aimed at managing wheat and wheat flour exports in a controlled and regulated manner. This will significantly impact flour millers engaged in export activities, requiring them to adapt to the new requirements and procedures. The effect of these changes will be to ensure Indian domestic wheat supplies are less affected by foreign exports of value added wheat products.
Key Entities Referenced
Foreign Trade Policy FTP, 20152020: A trade policy governing import and export activities.
Director General of Foreign Trade: The authority making amendments to trade policies.
Standard Input Output Norms SION: Norms related to input and output in foreign trade, specifically SION E110 (deleted) and SION E136 (newly inserted).
E136 Wheat Flour Atta: New standard for export of wheat flour.
Wheat: Import item for the production of wheat flour Atta
Advance Authorization AA: A scheme that allows duty-free import of inputs for export production, with specific conditions applied to wheat and wheat flour.
Appendix 4J: An appendix to the Foreign Trade Policy that lists items subject to pre-import conditions; wheat is placed under this appendix.
Domestic Tariff Area DTA: Area within India where domestic tariffs apply; procurement of wheat from DTA is not permissible under Advance Authorization.
EDI enabled ports: Ports which supports electronic data interchange for import and export activities
Handbook of Procedures 201520: Handbook of procedures for foreign trade.
Ministry of Commerce and Industry: Government Ministry overseeing commerce and industry.
Department of Commerce: Department within the Ministry of Commerce and Industry.
New Delhi: Location of the Directorate General of Foreign Trade (DGFT) and the issuance of the public notice.
Santosh Kumar Sarangi: Director General of Foreign Trade.
रजिस्ट्री स.ं डी.एल.- 33004/99 REGD. No. D. L.-33004/99
सी.जी.-डी.एल.-अ.-26112022-240605
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असाधारण
EXTRAORDINARY
भाग I—खण्ड 1
PART I—Section 1
प्राजधकार स ेप्रकाजित
PUBLISHED BY AUTHORITY
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MINISTRY OF COMMERCE AND INDUSTRY
(Department of Commerce)
(DIRECTORATE GENERAL OF FOREIGN TRADE)
PUBLIC NOTICE
New Delhi, the 25th November, 2022
No. 38/2015-2020
Subject:- Fixation of new Standard Input Output Norms (SION) at E-136 for export of wheat flour (Atta), deletion of
SION E-110, amendment in Appendix 4J and insertion of new para 4.05 (iii) under Handbook of
Procedures 2015-20- reg.
F. No. 01/94/180/157/AM-22/PC-4.—In exercise of the powers conferred under paragraph 1.03 & 2.04 of
the Foreign Trade Policy (FTP), 2015-2020, as amended from time to time, and as per provision of paragraph 4.13 of
Foreign Trade Policy, the Director General of Foreign Trade hereby makes the following amendments:[भाग I—खण् ड 1] भारत का रािपत्र : असाधारण 3
1. The Standard Input Output Norms (SION) E-110 stands deleted.
2. A new SION in food products category is inserted as under:
SION Export Item Quantity Import Item Quantity
E-136 Wheat Flour (Atta) 1.00 Kg. Wheat 1.07 Kg.
Note: For the purpose of this SION, „wheat flour (atta)‟ implies to „whole wheat flour (atta)‟ and the same is to be
endorsed as technical characteristic while applying for the Advance Authorization.
3. The Advance Authorization (AA) under this SION is subject to the following conditions:
i. The Advance Authorization (AA) shall be issued only to flour millers.
ii. The AA shall be issued with pre-import condition.
iii. The SION is valid until „wheat‟ is prohibited for exports. Thereafter, no further AA will be issued
under the SION. AAs already issued will continue to operate in the normal course.
iv. The Bills of Entry against which wheat has been imported shall be confirmed by Custom Authorities
while allowing exports.
v. Procurement of wheat from Domestic Tariff Area (DTA) is not permissible in any case against the
Advance Authorization.
4. The following amendment is made in Appendix 4J:
Serial No. Import Item(s) Export Obligation Period with pre-import condition from the date of
clearance of each import consignment by Customs Authority
14. Wheat 180 days
5. After sub para 4.05 (ii) a new sub-para 4.05 (iii) is introduced as under:
“Wheat Flour (Atta)” is permitted to be exported under the Advance Authorization Scheme, subject to
pre-import condition of wheat under the notified SION only. No domestic/ indigenous sourcing of wheat is
permitted and the invalidation letter/ARO facility is not available. Third party exports are also not allowed in
this case. Import and Export would be permitted only through EDI enabled ports. The Export Obligation
period (EOP) of Advance Authorization for wheat shall be 180 days from the date of clearance of each
import consignment and no extension in EOP shall be allowed. Such import shall be subject to actual user
condition and no transfer of imported wheat for any purpose, including job work, shall be permitted. In case
of non-fulfilment of EO/ non-achievement of stipulated value addition, a penalty equal to five times of the
CIF value of the imported material, corresponding to the shortfall in EO, shall be imposed in addition to the
payment of applicable duty and interest. Provisions of Paragraph 4.49 of Handbook of Procedures shall not
be applicable in this case.
Effect of this Public Notice:
The SION-E110 stands deleted. The export of wheat flour (atta) is allowed under Advance Authorization
Scheme. Accordingly, a new SION has been notified and import of „Wheat‟ is placed under Appendix 4J with
pre-import condition. Domestic procurement is not allowed in case of such Advance Authorization.
SANTOSH KUMAR SARANGI, Director General of Foreign Trade
& Ex-officio Addl. Secy.
Uploaded by Dte. of Printing at Government of India Press, Ring Road, Mayapuri, New Delhi-110064
and Published by the Controller of Publications, Delhi-110054.