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  • THE Department of Commerce comes under the Ministry of Industry and Commerce.
  • The Department formulates implements and monitors the Foreign Trade Policy (FTP) which provides the basic framework of policy and strategy to be followed for promoting exports and trade.
  • Besides, the Department is also entrusted with responsibilities relating to multilateral and bilateral commercial relations, Special Economic Zones, state trading, export promotion, and trade facilitation, and development and regulation of certain export-oriented industries and commodities.



  • India’s merchandise exports recorded a Compound Annual Growth Rate (CAGR) of 7.09 percent from April March 2009-10 to April-March 2018-19 (QE).
  • Merchandise exports (April-March 2018-19): US$ 331.02 billion [Earlier (2013-14)- US$ 314].
  • Growth (positive) - 9.06 percent (over the previous year).


  • Cumulative value of imports during April-March 2018-19 (QE) was US$ 507.44 billion as against US$ 465.58 billion during the corresponding period of the previous year registering a positive growth of 8.99 percent in US$ terms.
  • Oil imports were valued at-US$ 140.47 billion during April-March 2018-19 (QE) which was 29.27 percent higher than oil import valued at US$ 108.66 billion in the corresponding period of the previous year.
  • Non-oil imports were valued at US$ 366.97 billion during April-March 2018- 19 (QE) which was 2.82 percent higher than non-oil imports of US$ 356.92 billion in the previous year.

Trade Balance

  • The Trade deficit in Apr-Mar 2018-19 (QE) was estimated at US$ 176.42 billion which was higher than the deficit of US$ 162.05 billion during the corresponding period of the previous year.

Global Perspective

  • Global economic growth has been projected to be slower.
  • Compared to the projections of world output growth given by the International Monetary Fund (IMF) in its World Economic Outlook (WEO) Report in October 2018, the recent reports in January and April 2019 have revised the global growth downward for the years 2019 and 2020.
  • As per WEO, April 2019, the global economy is projected to grow at 3.3 percent and 3.69 percent in 2019 and 2020, respectively.
  • Growth across emerging markets and developing economies is projected to stabilize slightly below 5 percent, though with variations by region and country.
  • Growth in emerging and developing Asia will dip from 6.4 percent in 2018 to 6.3 in 2019, while the year 2020 is projected to witness a growth figure similar to the level of 2019.
  • In the US, the equity market has experienced some selling pressures since early May following the escalation of trade tensions with China and recently, with Mexico (RBI, June 2019).
  • Beyond 2020, global growth is set to plateau at about 3.6 percent over the medium term, sustained by the increase in the relative size of economies, such as those of China and India, which are projected to have robust growth by comparison to slower-growing advanced and emerging market economies (even though Chinese growth will eventually moderate) (WEO, April 2019).
  • As per the latest report i.e. WEO, April 2019, India has achieved a growth rate of 7.1 percent in 2018, while China had a growth of 6.6 percent.

Global Trade Situation

  • WTO economists expect merchandise trade volume growth to fall to 2.6 percent in 2019-down from 3.0 percent in 2018.
  • As per the current rankings for the year 2018, India is the 19th largest exporter (with a share of 1.7 percent) and 10th largest importer (with a share of 2.6 percent) of merchandise trade in the world.
  • China is the top-ranked exporter and America is the first largest importer of merchandise trade in the world.
  • In Commercial Services, India is the 8th largest exporter (with a share of 3.5 percent) and 10th largest importer (with a share of 3.2 percent).
  • USA is the top exporter as well as the top importer of commercial services trade in the world.



Foreign Trade:

  • The Five-year Foreign Trade Policy (FTP) 2015-20 provides a framework for increasing exports of goods and services.
  • Handbook of procedures notifies the procedure to be followed by an exporter or importer or by the licensing/Regional Authority or by any authority for purpose of implementing the provisions of Foreign Trade (Development and Regulation) Act, Rules and Orders issued under the provisions of Foreign Trade Policy.
  • The procedure contains the following documents:-
    • Hand Book of Procedures
    • Appendices & Aayat-Niryat Forms
    • Standard Input-Output Norms (SION)
  • The FTP has been suitably modified to incorporate the relevant GST provisions.
  • The Foreign Trade Policy Statement is the first comprehensive statement on government priorities in the foreign trade sector.
  • Through FTP the government has taken a major path-breaking initiative that the department has taken to mainstream states, union territories, and various departments of Government of India in the process of international trade.
  • The FTP introduces two new schemes, namely Merchandise Exports from India Scheme (MEIS) for export of specified goods to specified markets and Service Exports from India Scheme (SEIS) for increasing exports of notified services.

Foreign Trade

Merchandise Exports

  • The Merchandise Exports from India Scheme (MEIS) was introduced in the FTP with the objective to offset infrastructural inefficiencies and associated costs involved in exporting goods/products which are produced/ manufactured in the country.

Ease of Doing Business

  • The online e-com module to grant MEIS benefit without any manual intervention under a system authenticated mechanism for most HS Codes of the MEIS schedule was launched and has been running successfully since 2018.

Services Exports

  • Under the Service Exports from India Scheme/(SEIS), there are rewards on net foreign exchange earnings, to service providers of notified services who are providing service from India to the rest of the world, in the form of duty credit scrips which are transferable and can be used to pay certain central duties/taxes including customs duties.
  • In the mid-term review of the FTP, the rates for all these services have been further increased by 2 percent for exports from Nov 2017, leading to an additional annual incentive of ? 1,140 crores.

Duty Remission Schemes

  • Duty neutralization/remission schemes are based on the principle and the commitment of the government that goods and services are to be exported and not the taxes and levies.
  • Its purpose is to allow duty-free import/ procurement of inputs or to allow replenishment either for the inputs, used, or the duty component on inputs used.



Advance Authorization Scheme:

  • Advance Authorization Scheme allows duty-free import of inputs, along with fuel, oil, catalyst, etc., required for manufacturing the export product.
  • Inputs are allowed either as per Standard Input Output Norms (SION) or on Adhoc norms basis under actual user condition.
  • Norms are fixed by the Technical Committee or Norms Committee.
  • This facility is available for physical exports (also including supplies to SEZ units and SEZ Developers) and deemed exports including intermediate supplies. The minimum value addition prescribed is 15 percent except for certain items.

Duty-Free Import Authorization (DFIA):

  • Under DFIA Scheme operational from 2006, Duty-Free Import Authorization shall be issued on a post export basis for products for which Standard Input Output Norms (SION) have been notified, once the export is completed.
  • One of the objectives of the scheme is to facilitate the transfer of the authorization or the inputs imported as per SION after exports are completed.
  • Provisions of the DFIA Scheme are similar to the Advance Authorization scheme.
  • Minimum value addition of 20 percent is required under the scheme.

Schemes for Gems and Jewellery Sector:

  • Gems and Jewellery exports constitute a major portion of our total merchandise exports.
  • It is an employment-oriented sector.
  • Exports from this sector suffered significantly on account of the global economic slowdown.
  • Duty-free import/procurement of precious metal (gold/ silver /platinum) from the nominated agencies is allowed either in advance or as replenishment.
  • Duty-Free Import Authorisation Scheme shall not be available for the Gems and Jewellery Sector.

Issuance of Authorization under Duty Remission Schemes:

  • Authorizations are issued under the various schemes, viz., Advance Authorization, Duty-Free Import Authorization (DFIA) and Replenishment License (Gems and Jewellery).

Export Promotion of Capital Goods (EPCG):

  • The objective of the EPCG Scheme is to facilitate the import of capital goods for producing quality goods and services to enhance India’s export competitiveness.
  • The Scheme allows import under of capital goods at zero customs duty subject to an export obligation equivalent to 6 times of duties, taxes.

Directorate General of Foreign Trade:

  • It is an attached office of the Ministry of Commerce and Industry and is headed by the Director-General of Foreign Trade.
  • Right from its inception till 1991, when liberalization in the economic policies of the Government took place, this organization has been essentially involved in the regulation and promotion of foreign trade through regulation.
  • The shift was from prohibition and control of imports/exports to promotion and facilitation of exports/imports, keeping in view the interests of the country.
  • This Directorate, with headquarters at New Delhi, is responsible for formulating and implementing the Foreign Trade Policy with the main objective of promoting India’s exports.

Web Portals

  • DGFT has launched an updated website making it more user-friendly and easy to navigate.
  • This website has a large dynamic component whereby the trade community can file applications online for IEC and various other schemes.

Capacity Building:

  • In the last two years, over 50,000 entrepreneurs have been trained under the Niryat Bandhu program implemented by DGFT (Directorate General of Foreign Trade), thus complementing the Startup India and Skill India initiatives.

Centre for Research in International Trade:

  • It is expected to fill the gap and will also help in forming enduring coalitions with a large number of developing countries which may have the convergence of interests with India and could potentially become India’s allies on various trade issues at the global level.
  • CRIT will have 5 centers namely Centre for Trade and Investment Law, Centre for Regional Trade, Centre for Training, Centre for Trade Promotion and Centre for WTO Studies.
  • The Council for Trade Development and Promotion was constituted in July 2015.
  • It would ensure a continuous dialogue with state governments and UT’s on measures for providing an international trade enabling environment in the states and create a framework for making the states active partners in boosting India’s exports.

Special Economic Zones:

  • India was one of the first in Asia to recognize the effectiveness of the Export Processing Zone (EPZ) model in promoting exports, with Asia’s first EPZ set up in Kandla in 1965.
  • To overcome the shortcomings on account of the multiplicity of controls and clearances, the absence of world-class infrastructure, and an unstable fiscal regime and with a view to attracting larger foreign investments in India, the Special Economic Zones (SEZs) Policy was announced in April 2000.
  • This policy intended to make SEZs an engine for economic growth supported by quality infrastructure complemented by an attractive fiscal package, both at the Centre and the state level, with minimum possible regulations.
  • SEZs in India functioned from 2000 to 2006 under the provisions of the Foreign Trade Policy and fiscal incentives were made effective through the provisions of relevant statutes.
  • The SEZ Act, 2005, supported by SEZ Rules, came into effect in 2006, providing simplification of procedures and single window clearance on matters relating to central and state governments.
  • The main objectives of the SEZ Act are:
    • Generation of additional economic activity
    • Promotion of exports of goods and services
    • Promotion of investment from domestic and foreign sources
    • Creation of employment opportunities
    • Development of infrastructure facilities

Government e-Market:

  • Directorate General of Supplies and Disposals (DGS&D) created a dedicated e-market for different goods and services procured/sold by government/PSUs, a technology-driven platform to facilitate procurement of goods and services by various ministries and agencies of the government.
  • The portal was launched in 2016 and became fully functional by October 2016.

Trade Facilitation:

  • National Trade Facilitation Committee (NTFC) was set up following ratification by India of the Trade Facilitation Agreement (TFA).
  • Four working groups have been set up to focus on (i) infrastructure, (ii) legal issues, (iii) outreach, and (iv) time release study.
  • Further, the National Trade Facilitation Action Plan (NTFAP) drawn out in consultation with the stakeholders, identifying 76 trade facilitation measures with implementation timelines of which 51 are TFA-plus activities.

State-of-Art Trade Analytics:

  • State-of-art trade analytics has been put in place in Directorate General of Foreign Trade (DGFT) for data-based policy actions.
  • This initiative envisages processing trade information from the Directorate General of Commercial Intelligence and Statistics and other national and international databases related to India’s key export markets and identifying specific actions.

Digitisation and PFMS:

  • Successful implementation of the Public Financial Management System (PFMS) had been rolled out in all PAOS of this office Pay and Accounts Offices of Delhi, Chennai, Kolkata and Mumbai.

Anti Dumping:

  • The role of Directorate General of Anti-Dumping and Allied Duties (DGAD) under the Department is to provide the level playing field to the country’s domestic industry from the foreign exporters so that they are able to compete effectively in the domestic market.
  • This measure is taken under the WTO agreement and comes under the Customs Tariff Act, 1975 and Rules made there under.


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