On March 31, 2002, India's Minister of Commerce & Industry Mr. Murasoli Maran presented India's Export-Import Policy for the next 5-years. The preceding two 5-year ExIm Policies that directed most of India’s economic reforms resulted into a compounded annual growth rate of 11% in exports. The government has now offered tax concessions and export incentives at the cost of annual revenue of US$ 200 mn. Salient points that might be of interest to the international business community are as follows:

- Quantitative Restrictions on imports are removed from all but those items that are not permitted by international conventions. Unrestricted imports are now allowed for gold and silver jewellery, medical bandages, postage stamps, poppy seeds, nutmeg, maize and drugs for homeopathic treatment.

- The developers of Special Economic Zones (SEZ) and the units located therein are provided income tax concessions.

- Banks located in SEZs would now get all the benefits of Offshore/Overseas Banking Units (OBUs) and exempted from 5.5% Cash Reserve Ratio (CRR) and 25% Statutory Liquidity Ratio (SLR). Besides making low interest finance available to exporting units, it is expected to prompt international banks to open new trading bases in India.

- Exporters can now retain their earnings in foreign currency for 360 days instead of 180 days, providing them greater flexibility against exchange rate fluctuation. Maximum benefits are likely to be reaped by garment and textile exporters.

- Export restrictions are lifted from all agriculture produce except onion, jute and niger seed.

- Small producers and craftsmen contribute more than half of India’s total exports of manufactured goods. According to a UNIDO study, they are concentrated in 354 industrial clusters. 34 of such clusters each having an annual turnover of about US$ 200 mn. Benefits are extended to common service providers of 3 such clusters, viz., Ludhiana that exports 95% of its woollen knit-ware production, Tirupur that exports 80% of its knitted hosiery production, and Panipat that exports 75% of its woollen blanket production.

- Rebate would be given on fuel costs as per Standard Input Output Norms. Maximum benefits are likely to be reaped by manufacturer-exporters of forged automobile components.

Directorate General of Foreign Trade (DGFT) in India has further simplified Import and Export procedures, e.g. the physical examination of export consignments are reduced to a random sample of 10%. In fact it has applied for ISO: 9000 certification, which is rare to do for a government department in India. All rules and notifications of DGFT are now available on its web site: http://dgft.delhi.nic.in/