India is gaining dominance in the international trade and commerce. However, for businesses to seamlessly operate their international businesses, it is important to adhere to the Foreign Trade Policies laid down by the government. Let’s understand the Foreign Trade Policies in India in detail and how it impacts your business.
Foreign Trade Policy – Comprehensive Overview
Foreign Trade Policy is a set of policies, regulations and provisions that regulate and streamline the import and export businesses and transactions. All the businesses and people engaging in import or export businesses need to comply with the foreign trade policy of the government. Here are some of the crucial schemes under the Foreign Trade Policy in India for the benefit of exports:
- Remission of Duties and Taxes on Exported Products (RoDTEP): This scheme ensures that the exporters receive a refund of the duties and taxes that are embedded and were previously non-recoverable.
- Advance Authorisation: This involves allowing duty-free imports for inputs that are physically incorporated into the export products.
- Duty Free Import Authorisation (DFIA): DFIA also allows duty-free import of inputs that are utilised or consumed in making the export products. It is a variant of the Advance Authorisation Scheme.
- Duty Drawback: This involves a refund of the customs duty paid at the time of import of goods that were later consumed or used in the manufacturing of goods for export.
FTP Advisory - Key Elements
1. Strategic Planning & Advisory
- A comprehensive analysis of the foreign trade policies and how it impacts your business
- Devising a strategy to help your business navigate through a complex business environment
- Foreign trade policy advisory on market entry strategies, market research, import-export procedures and compliance requirements
2. Regulatory Compliance
- Determining the applicability of compliances under various laws and regulations
- Helping businesses adhere to the import-export regulations, customs procedures and tariff classifications
- Regular updates relating to changes in foreign trade policies in India and how they impact your business at large
3. Duty Drawbacks & Incentives
- Identification of the various incentive and promotion schemes launched by the government to promote international businesses
- Assisting businesses claim the maximum amount as duty drawback and refunds
- Helping businesses prepare and file applications for duty drawbacks and refunds followed by liaising with the authorities
- Devising strategies to optimize the supply chain operations in line with the refund regulations
4. Trade Finance Advisory
- Assistance in availing of financing facilities to grow and expand your business
- Guidance on securing different types of credit facilities for international trade, including trade finance, export credit insurance, letters of credit and working capital loans
- Negotiating favourable terms with the banking and financial institutions for affordable financing
- Assisting in mitigating risks associated with international trade transactions
5. Risk Management & Dispute Resolution
- Identifying and analysing the potential risks of international trade operations
- Development and implementation of the risk mitigation strategies to safeguard your interest
- Assistance in trade and dispute resolution
FAQ
Foreign Trade Policy (FTP) is a set of guidelines and regulations being set by the government to regulate and streamline and promote international trade. It specifies detailed regulations and policies surrounding international trade, procedures, compliances etc.
Some of the prominent schemes under foreign trade policy include Advance Authorization, Duty Drawback, Export Promotion Capital Goods Scheme etc.
A duty drawback scheme allows the exporters of goods to avail of the refund of the customs duty paid on goods imported by them for the purpose of manufacturing of export goods. This directly reduces their cost of goods, helping them stay competitive in the international markets.
Failure to comply with the regulations of FTP can attract stringent penalties and obstructions in your import and export business.
Foreign trade policy advisory services are comprehensive services that involve strategic planning and advisory, assistance in claiming refunds and duty drawbacks, dispute resolution, trade finance advisory, regulatory compliance etc.