March 31, 2002

GLOSSARY OF TERMS -- EXIM POLICY

Exim Policy Refers to Export and Import (Exim) Policy, as amended from time to time. The new 5-year Exim Policy (2002-2007) announced on 31 March, 2002 is co-terminus with the Tenth Five-Year Plan. The Exim Policy takes effect from April 1.

DGFT Directorate General of Foreign Trade, which is headed by the Director General of Foreign Trade. The office of the DGFT is responsible for formulating and execution of Exim Policy, including licensing. Formerly (till 1991), was known as the Chief Controller of Imports & Exports (CCI&E).

EPZs/EOUs EPZ means Export Processing Zones which are special enclaves, separated from the Domestic Tariff Area (DTA), to provide an internationally competitive duty-free environment for export production. EOU means Export Oriented Units. The EOU scheme is complementary to the EPZ scheme, except that it is widely dispersed in location, unlike EPZs, which are set up at specific locations. The seven EPZs in the country are -- at Kandla, Santa Cruz, Falta, Noida, Cochin, Chennai and Visakhapatnam.

SEZs SEZs means Special Economic Zones In principle approvals have already been given for setting up of 13 new SEZs (state government/private sector) at Nanguneri (Tamil Nadu), Dronagiri (Maharashtra), Paradeep (Orissa), Gopalpur (Orissa), Kulpi (West Bengal), Bhadohi (UP), Kanpur (UP), Kakinada (Andhra Pradesh) Indore (MP), Grater Noida (UP), Salt Lake (West Bengal), Hassan (Karnataka) and Positra (Gujarat). Besides these, four EPZs viz., Santa Cruz, Kandla, Cochin and Surat (in private sector) have been converted into SEZs with effect from 1^st November, 2000.

E-Commerce Refers to electronic commerce. In the context of Exim Policy, e-commerce relates to electronic filing and processing of applications etc.

EPCG EPCG refers to the Export Promotion Capital Goods (EPCG) Scheme, which gives the manufacturer facility for import of capital goods for export production at concessional rate of duty (5 per cent) against certain level of export obligation over a period of time.

Duty Allows duty-free import of inputs for exports under Advance

Exemption Licence, Duty Entitlement Pass Book (DEPB)

Scheme/Duty and Duty Free Replenishment Certificate (DFRC) Scheme.

Inputs .

Advance Advance Licence is granted for import of inputs without

Licence payment of customs duties. It is issued in accordance with the Policy and procedures in force and subject to fulfilment of time-bound export obligation. Such licences can be issued for import of inputs for use in the export production as well as for replenishment of the inputs already used in the export product.

DEPB Refers to the Duty Entitlement Pass Book to neutralise the incidence of basic and special customs duty on the import content of export product. This is provided by way of grant of duty credit against the export product at specified rates. The DEPB Scheme which was notified on 1/4/1997 consisted of (a) Post-export DEPB and (b) Pre-export DEPB. The pre-export DEPB scheme was abolished w.e.f. 1/4/2000. Under the post-export DEPB, which is issued after exports, the exporter is given a duty entitlement Pass Book at a pre-determined credit on the FOB value. The DEPB allows import of any items except the items which are otherwise restricted for imports.

Input-Output The norms which define the amount of input/inputs

Norms required to manufacture a unit of output.

Replenishment Refers to Replenishment of such imports as per the Input-

Licence output norms required for the purpose of export of products.

DFRC Refers to the Duty Free Replenishment Certificate Scheme which was introduced from 1/4/2000 replacing Transferable Advance Licensing Scheme. The scheme is available to merchant exporters as well as to manufacturer exporters. However, it covers only items which are covered under standard input-output norms notified by DGFT. The validity of DFRC as announced on 1/4/2000 was 12 months. Validity of DFRC has been extended from 12 months to 18 months in the Exim Policy 2001-2002 w.e.f. 1/4/2001.

SIL SIL means Special Import Licences issued under the Policy.

Deemed Refers to those transactions in which the goods supplied do

Exports not leave the country and the payment for the goods is received by the supplier in India.

FoB FoB means Free on Board -- i.e., when an exporter delivers goods "free on board", he pays all charges involved in getting them actually onto the ship.

NFE NFE refers to Net Foreign Exchange. Net Foreign Exchange earning is calculated as a percentage of exports (NFEP).

ISO-9000 Refers to international standards, laid down by the International Standards Organisation.

Manufacturer- Manufacturer-exporter means a person who exports

Exporter goods manufactured by him or intends to export such goods.

Merchant Merchant- Exporter means a person engaged in

Exporter trading activities and exporting or intending to export goods.

Export With a view to building marketing infrastructure and

House/ expertise required for export promotion, exporters

Trading with certain level of export performance are

House etc. conferred the status of Export House/Trading House/Star Trading House/Super Star Trading House.

Registration- Registration-cum-Membership Certificate (RCMC)

cum- means a certification of registration and

Membership membership granted to an exporter by an Export

Certificate Promotion Council (EPC) or other competent authority.

Value addition Value addition refers to the increment added in the process of manufacture of a particular item, which also becomes part of its price.

QRs QRs mean Quantitative Restrictions. QRs refer to specific limits imposed by countries on the quantity or value of goods that can be imported or exported. QRs are non-tariff measures which are taken to regulate or prohibit international trade. QRs specifically refer to measures such as licensing requirements for exports/imports; quotas, ceilings etc.

ITC (HS) Refers to Indian Trade Classification (Harmonised System). It is a system of classification of products for the purposes of export and import.