**Executive Summary:**
This notification, issued by the Directorate General of Foreign Trade, Ministry of Commerce and Industry, amends the Foreign Trade Policy 2015-2020, specifically paragraph 3.24 concerning export promotion. The amendment, effective immediately, revises the annual limit for free of cost exports by status holders. It was issued on August 27, 2018, and published on August 28, 2018.
**Key Points / Main Content:**
* **Amendment to Para 3.24j of FTP 2015-2020:** Revises the policy regarding free of cost exports for export promotion by status holders.
* **Revised Annual Limit for Most Exporters:**
* The limit is now 2% of the average annual export realization during the preceding three licensing years.
* This excludes exporters of Gems and Jewellery, Articles of Gold, and precious metals.
* **Annual Limit for Gems and Jewellery, Articles of Gold, and Precious Metals Exporters:**
* The limit is Rupees One Crore or 2% of average annual export realization during preceding three licensing years, whichever is lower.
* **Annual Limit for Pharma Product Supplies to International/Government Health Programs:**
* Remains at up to 8% of the average annual export realization during the preceding three licensing years for supplies of pharmaceutical products, vaccines, and life-saving drugs to health programs of international agencies (UN, WHO, PAHO) and government health programs.
* **Ineligibility for Incentives:**
* Free of cost supplies under Para 3.24j are not entitled to Duty Drawback or any other export incentive under any export promotion scheme.
* **Removal of Fixed Limit:**
* The previous fixed limit of Rupees One Crore per year for free of cost exports has been removed, replaced by the 2% of average annual export realization (except for Gems and Jewellery, Articles of Gold, and precious metals).
**Impact Analysis:**
**Status Holders (Exporters):**
* *Impact:* The limit of Rs One Crore per year for exports on free of cost exports basis for export promotion is removed and is made 2% of average annual export realization during preceding three licensing years with immediate effect.
*Action Required:* Status holders need to be aware of the revised annual limits for free of cost exports and adjust their export promotion strategies accordingly.*
**Gems and Jewellery, Articles of Gold, and Precious Metals Exporters:**
* *Impact:* These exporters are subject to a separate limit, Rupees One Crore or 2% of average annual export realization during preceding three licensing years, whichever is lower.
* *Action Required:* These exporters need to calculate their export limits based on the specified criteria.
**Pharmaceutical Companies Supplying to Health Programs:**
* *Impact:* The annual limit for supplies to specific health programs remains at up to 8% of the average annual export realization.
* *Action Required:* Ensure compliance with the specific conditions for this higher limit.
Key Entities Referenced
Foreign Trade Policy 2015-2020: A policy document related to foreign trade, which is being amended.
Foreign Trade Development and Regulation Act, 1992: The Act that confers powers to the Central Government to make amendments to the Foreign Trade Policy.
Ministry of Commerce and Industry: The governing ministry responsible for foreign trade policies.
Directorate General of Foreign Trade: The organization responsible for implementing foreign trade policies.
New Delhi, Delhi: The location where the notification was issued.
Alok Vardhan Chaturvedi: Director General of Foreign Trade who issued the notification.
Gems and Jewellery: A specific sector of export mentioned in the policy regarding free of cost exports.
Articles of Gold and precious metals: A specific sector of export mentioned in the policy regarding free of cost exports.
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[फा. स.ं No. 01/61/180/59/AM16/PC-3]
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MINISTRY OF COMMERCE AND INDUSTRY
(Department Of Commerce)
(Directorate General of Foreign Trade)
NOTIFICATION
New Delhi, the 27th August, 2018
No. 28.2015-2020
Subject: Amendment in Para 3.24 (j) of Chapter-3 of FTP 2015-2020.
S.O. 4186(E).— In exercise of the powers conferred by Section 5 of the Foreign Trade (Development and
Regulation) Act, 1992 read with Para 1.02 of the Foreign Trade Policy, 2015-2020, the Central Government hereby
makes the following amendments in the Foreign Trade Policy 2015-2020 with immediate effect:
2. Existing Para 3.24(j) of the FTP 2015-20
Status holders shall be entitled to export freely exportable items (excluding Gems and Jewellery,
Articles of Gold and precious metals) on free of cost basis for export promotion subject to an annual limit of
Rupees One Crore or 2% of average annual export realization during preceding three licensing years, whichever
is lower. For export of pharma products by pharmaceutical companies, the annual limit would be 2% of the
average annual export realisation during preceding three licensing years. In case of supplies of pharmaceutical
products, vaccines and lifesaving drugs to health programmes of international agencies such as UN, WHO-
PAHO and Government health programmes, the annual limit shall be upto 8% of the average annual export
realisation during preceding three licensing years. Such free of cost supplies shall not be entitled to Duty
Drawback or any other export incentive under any export promotion scheme.
3. Amended Para 3.24(j) of the FTP 2015-20
Status holders shall be entitled to export freely exportable items (excluding Gems and Jewellery,
Articles of Gold and precious metals) on free of cost basis for export promotion subject to an annual limit as
below:
a. Annual limit of 2% of average annual export realization during preceding three licensing years for all
exporters (excluding the exporters of following sectors-(1) Gems and Jewellery Sector, (2) Articles of Gold and
precious metals sector) .¹Hkkx IIµ[k.M 3(ii)º Hkkjr dk jkti=k % vlk/kj.k 3
b. Annual limit of Rupees One Crore or 2% of average annual export realization during preceding
three licensing years, whichever is lower. (for exporters of the following sectors-(1) Gems and Jewellery Sector,
(2) Articles of Gold and precious metals sector).
c. In case of supplies of pharmaceutical products, vaccines and lifesaving drugs to health programmes
of international agencies such as UN, WHO-PAHO and Government health programmes, the annual limit shall
be upto 8% of the average annual export realisation during preceding three licensing years.
The free of cost supplies made under provisions of Para 3.24(j) shall not be entitled to Duty Drawback
or any other export incentive under any export promotion scheme.
Effect of this Notification: The limit of Rs One Crore per year for exports on free of cost exports basis for export
promotion for Status Holders is removed and is made 2% of average annual export realization during preceding three
licensing years with immediate effect.
[F. No. 01/61/180/59/AM16/PC-3]
ALOK VARDHAN CHATURVEDI, Director General
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.