क्या है शेयर बाजार?

शेयर बाजार आखिर है क्या? बाजार बोले तो किराना बाजार, मछली बाजार, कपडा बाजार तो समझ में आता है , जहां खरीदने वाले और बेचने वाले इकट्ठे होकर, चीजों या सेवाओं की खरीद-फरोख्त करते हैं। जैसे फल बाजार में फल बिकते हैं, जैसे हर शहर में चौराहों पर सुबह-सुबह मजदूर बिकते हैं या और भी बहुत कुछ, उसी तरह शेयर बाजार भी बाजार ही है, लेकिन कुछ खास, और बाजारों से कुछ अलग किस्म का।

सीधे कहा जाए, तो शेयर बाजार एक ऐसी जगह है, जहां कंपनियों के शेयरों की खरीद-फरोख्त होती है। भारत में अंग्रेजों के जमाने में शेयर बाजार शुरू हुआ था, और पहले शेयर एक पेड के नीचे मजमा लगाकर बेचे जाते थे। बाद में यह ट्रेडिंग रिंग के रूप में बदला, जिसमें ब्रोकर यानी दलाल लोग इकट्ठे होकर शेयर बेचते थे। अब यह अत्याधुनिक कंप्यूटर प्रणाली से लैस तेज गति की व्यवस्था है, जिसमें एक साथ लाखों खरीददार और विक्रेता, दूरसंचार व्यवस्थाओं के जरिए केंद्रीय कंप्यूटर से जुडते हैं। खरीदने-बेचने वाले ये लोग इंटरनेट सुविधा वाले अपने कंप्यूटर या ब्रोकर के कंप्यूटर के जरिए अपने आर्डर को शेयर बाजार में दर्ज कराते हैं और खरीदे-बेचे जाने वाले शेयरों की संख्या और कीमत का मिलान केंद्रीय कंप्यूटर से होते ही सौदा दर्ज हो जाता है। पूरी प्रक्रिया में आर्डर केंद्रीय कंप्*यूटर को भेजा जाता है, उसका कन्फर्मेशन होता है, सौदा तय होता है और उसका निबटान होता है। यह सारी प्रक्रिया सेकेंडों में पूरी हो जाती है।

बाजार का खास पहलू है उस कीमत की खोज, जिस पर सौदा तय हो सके। बेचने वाला ज्यादा से ज्यादा कीमत चाहता है और खरीदने वाला कम से कम में खरीदना चाहता है। यह सौदेबाजी जब समान कीमत पर पहुंचती है तभी सौदा तय होता है। चूंकि शेयर बाजार में एक साथ बहुत भारी तादाद में खरीददार-विक्रेताओं का आपसी सम्पर्क होता है इसलिए सौदे भी भारी तादाद में फटाफट पूरे होते हैं।

शेयर बाजार में शेयर बिकते हैं। शेयर क्या हैं? शेयर का मतलब है हिस्सा। किसी कंपनी का शेयर लेने का मतलब है उस कंपनी में आपने हिस्सेदारी ले ली। एक लाख शेयर वाली किसी कंपनी के दस हजार शेयर खरीदकर आप उस कंपनी के दसवें हिस्से के मालिक बन जाते हैं। उद्यमी और बिजनेसमैन, जो कोई कारोबार खडा करना या बढाना चाहते हैं, वे योजना बनाते हैं कि वे नई कंपनी शुरू करके या पुराना कारोबार बढा़कर ढेर सारा पैसा बना सकते हैं। लेकिन उनके पास इतनी काफी पूंजी नहीं होती कि वे बाहर से पैसा लिए बिना अपनी पूरी योजना को लागू कर सकें। तब निवेशक आगे आता है और कंपनी के शेयर यानी हिस्सेदारी खरीदकर उद्यमी को पूंजी मुहैया कराता है।

आम जनता को शुरुआती शेयर खरीदने के प्रस्ताव IPO (Initial Public Offer) के जरिए दिए जाते हैं। अब, जो निवेशक IPO में शेयर खरीद लेता है, वह अनन्तकाल तक तो शेयर अपने पास रखना चाहेगा नहीं। उसकी अपनी दूसरी जरूरतें हो सकती हैं या किसी और कंपनी में पैसा लगाने के लिए वह अपना पैसा खाली करना चाहता है। लेकिन कंपनी तो उसका पैसा इतनी जल्दी लौटा नहीं सकती, क्योंकि उगाहे गए पैसे को कंपनी ने कारोबार की ठोस चीजों, जैसे मशीनरी, जमीन, इमारत निर्माण आदि में लगा दिया होता है जिसे चाहकर भी तत्काल खाली नहीं किया जा सकता। ऐसे में शेयर बाजार वो प्लेटफार्म मुहैया कराता है जिसे Secondary Market यानी दूसरे दर्जे का बाजार कहते हैं। इस बाजार में निवेशकों के बीच लिस्टेड यानी सूचीबद्ध कंपनियों के शेयरों की खरीद-फरोख्त होती है और ऐसी कई हजार कंपनियों के लाखों-करोडों शेयर रोज खरीदे-बेचे जाते हैं।

शेयर बाजार में लिस्टेड होने के लिए कंपनी को बाजार से लिखित समझौता करना पडता है, जिसके तहत कंपनी अपनी हर हरकत की जानकारी बाजार को समय-समय पर देती रहती है, खासकर ऐसी जानकारियां, जिससे निवेशकों के हित प्रभावित होते हों। इन्हीं जानकारियों के आधार पर कंपनी का मूल्यांकन होता है और इस मूल्यांकन के आधार पर मांग घटने-बढने से उसके शेयरों की कीमतों में उतार-चढाव आता है। अगर कोई कंपनी लिस्टिंग समझौते के नियमों का पालन नहीं करती, तो उसे डीलिस्ट किया जाता है, उसके खिलाफ कार्रवाई की जाती है जिसके लिए सरकार ने सेबी (भारतीय प्रतिभूति एवं विनिमय बोर्ड - SEBI) जैसी ताकतवर संस्थाए को कानूनी अधिकार देकर निवेशकों के हित में सक्षम बनाया है।

मामूली, अनजान सी कंपनियों में निवेश करने की तुलना में जानी-मानी, बडी और मजबूत कंपनी को निवेश के लिए चुनना हमेशा ज्यादा सुरक्षित माना जाता है।

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Economiccs important

Tariff barriers

- Tariff = A government tax on imports or exports
- When Indian Govt. puts heavy import duty / custom duty on Foreign Products – either that import item becomes very costly so people will buy desi* items. (and there will be smuggling of foreign items! Like Gold watches/ perfumes etc in the 80s.) *Desi= domestic / Indian
- This protects domestic players. (= industrialists/ businessmen.) from competition from foreign players.
Non-Tariff barriers.

- When Desi players are given subsidies / preference over the foreign players by Govt. of India.
- For example,
o when Govt. is buying some phones/ Xerox Machines, in the tender it’ll mention that only Domestic companies can fill the tender.
o making polices in such a way that its hard for foreign player to start factory / introduce his product in India
o Intentionally setting the Quality standards so high that certain players can’t sell their products here.
- Here no tariff (=tax/money) is involved but still there is a barrier for foreign players. That’s why its called Non-Tariff barrier.
what was happening before WTO.


· Nations would put heavy custom duties on foriegn items. (to protect the domestic / Swadeshi industries)- this is called 'protectionism / Tarrif Barriers'
· this all sounds good from patriotic point but
· When there is less competition - products will be expansive & customer won't have much choice. for Example….. compare-
o prices of Mobiles in 1999, with current prices!
o features of current mobiles with 1999 (was there any MP3, radio,Camera, Color Screen etc features, if yes- how expensive was it!)
o talk-time plans (in 1999 it was about 7 Rs./minute + incoming wasn't free, now its around 50 Paisa / minute + Free incoming/)

Today we have this fun, because of globalization + import of foreign products & Govt. doesn't put high custom / import tax on it. (no high tarrif barriers)

So, The Primary objective of WTO is to remove the tarrif barriers / Custom duties. = integrate all nations in international economy.
For this, WTO will consult with all member-nations, and will make legally binding agreements.
Why agreements?

- there are total 19 Agreements in WTO, but most imp. are 3. (i'll explain it later in this article.)
- these agreements talk about what is compulsory & what is non-compulsory for each nation.
- And what will be the penalties if a nation doesn't follow these agreements.
- Every Agreement has an 'Annex'- in that you'll find the detailed provisions & items included in the agreements.
- The Secretariat of WTO keeps an eye on every nation – seeing whether agreements are followed or not.

But there will be some bad-nations who won't play by the rules & try to cheat such agreements. So second objective of WTO is 'Dispute Resolution'
that's like an international civil court.

Now lets see the 3 most imp agreements of WTO. See this chart


Like I said ago, they’ve annexes which provide operation details about how to implement these agreements. (only TRIPS doesn’t have any annex)
Now lets see their annex 1 by 1 via charts.
Annex

#1 Annex : GATT


1 – SPS came after Doha
Now another mimp annex of GATT is, SCM = subsidies & counter veiling measures (=the Red, Green & Amber list) – see this chart-

Apart from this, shipment inspection and anti-dumping are also included in GATT annex.

#2 : Annex of GATS (services)



#3 : TRIPS – like I said ago, TRIPS doesn’t have any annex!

But TRIPS is very imp agreement in today’s world full of technologies-so lets see what’s it about t.

TRIPS =Trade related intellectual property rights

Its one of the agreement between WTO member nations.
TRIPS doesn’t have any annexes.
What is TRIPS all about?

· In short, under TRIPS agreement, every member-nation has to make laws and tough punishments for anyone who breaks / copies other people's copyright / patent etc.
why TRIPS is imp?

· otherwise, there will be wide spread piracy & then Inventors of 1st world won't invest / come in 3rd world market.
· there are certain items whose actual price can't be counted based on 'physical material used in it' (e.g. Books are not sold based on number of pages/ cost of paper but content & fame of author.) so we can't apply GATT (which is for physical goods ) and Book is not a 'service' either (so can't apply GATS)
· Research & Development.(R&D)
o it takes years and billions of rupees to make a new drug.
o but retail price of one tablet of that drug would be about 5 Rs.
o here, if the patent / copyright wasn't protected, then inventors will not invest in R&D.& then world will be deprived of better products.
· the GI (Geographical indicator)
o like Darjiling tea- only the tea made in Darjiling can be sold as 'Darjiling tea'
o otherwise, Britishers would also sell their tea claiming it to be 'Darjiling variety' and then our tea makers will face unfair compitition.

India's Problem with GI

· Pakis also claim GI for their Basmati Rice.
· TRIPS doesn't talk about trans-border GIs.

Time limit

· it came in force from 1st January 1995. and according to its provision
· Developed nations have to make such laws within 1 year.
· developing nations (like India) have to make such laws within 5 years.
· Least Developing countries (like Zimbabway/ Somalia) were given time limit upto 11 years (=2006) , but now the time is extended upto 2016 for pharmaceutical patent laws.

Apart from above 3 agreements (GATT, GATS, TRIPS) other 3 imp agreements are-(see this diagram)





What is the Use of these agreements? / What are the trading principles in WTO?

Without Discrimination

· MFN = Most favored nation
· In WTO, every nation is MFN
· So, if India grants a special favor to one nation – India will have to give that special favor to all member-nations of WTO.
· India will have to treat locals & foreign players equally. (e.g. you can’t have a system like Local businessman’s file will be cleared first or local man will be given preference in contract / tenders/ 3G frequency allocation.)
· Exception to this principle
a. Group of nations can form FTA = Free trade agreements
b. Country can give special favors to 3rd world / poor nations.
c. A nation can impose high import duty/ prevent entry of goods from a nation that’s doing unfair trade practices (like dumping* / Products dangerous to health**)
d. But there are strict conditions in WTO, before you can do above things.
i. *Dumping =China intentionally sends extremely cheap toys in India, so Indian toy makers collapse and toy market in India is captured by China.
ii. ** Products dangerous to health like China’s milk powder which had melamine.
Freer Trade (bringing down barriers in international trade) –

· WTO agreements try to abolish following things-
1. custom duties
2. Quota
3. subsidies
4. non-tariff barriers* (explained later.)
5. red tape
6. Artificially propped up exchange rates
a. like China intentionally keeps the value of Yuan low, so Americans will find it cheap to buy from China compared to other nations.)
Predictability

· When there are legally binding agreements between member nations of WTO- it means, even after change in Govt. (BJP / Congress / whatever) – the Indian policy of international trades won’t alter very much.
· This gives confidence of foreign investors because of
· Promise of stability (=Ceilings on customs tariffs.)
· policy environment is predictable.(= Transparency in trade rules)
· Equal treatment to Local players & foreign players. (=open access to markets)
· binding commitments (WTO keeps an eye on each nation – so Govt. can’t cheat. And if you cheat- you’ll have to pay fines.)
· And foreign investment helps the domestic economy as well.

Fair compitition

WTO agreements prevent unfair dumping, subsidies, government procurement

Economic Reforms

to implement WTO Agreements, the 3rd world nations have to change their policies. = reform
(remember the pre-LPG Era - quota,licence,inspctor raj)

What was before WTO?

- Before WTO, there was GATT.
- GATT was criticized for being 'Rich men's club'
- Everything in GATT used to work in a manner that'd suit the rich nations.
so WTO is better than GATT?

- Yes, because of following reasons.
1. WTO dispute resolution is quicker than GATT (disputes have to be solved within 18 months)
2. in GATT, the bad-nation was free to determine its own penalty.
3. but in WTO, bad nation has to pay high penalties for not following the rules.
4. GATT talked only about goods (physical products) . WTO talks about services (phone lines, BPO) & Intellectual property rights, along with those goods.
5. The working of WTO is more transparent.
6. In WTO, every nation has one vote only. Unlike IMF where rich nations have more voting powers.





India & WTO


first lets see what positive things happened then we talk of Doha Rounds and finally about What's India's problem in Doha rounds.

What did India Gain from WTO?

1. India got boom in exports because WTO gradually lowered Barriers internationally.
2. our export was only $33.22 billion in 1998-99.
3. right now India's exports are worth more than $100 billion
4. India won multilateral dispute settlement against such powerful economies as USA
5. because of TRIPS, India had to adopt international standards in Intellectual property rights.=
6. ↑ flow of Foreign investment & technology.
7. (because Foreigners established research labs/ manufacturing units in India & started selling their products here.)
8. Textiles boom (because MFA = Multilateral Fiber Agreement was scrapped under WTO's ATC=Agreement on Texttile clothings.) otherwise previously UK and other nation had put quantitative limits on Indian Cotton's Entry in their market.
DOHA

what is DOHA?

Doha is capital city of a small nation called Qatar.
4th Ministerial conference of WTO was held in that city in Nov.2001.
and they (member nations) started talking about some new agreements & issues- and the talks continued.. so this entire package is called 'Doha round of talks.' aka "DDA = Doha Development agenda."
Fifth Ministerial Conference was held in Cancun, Mexico in September 2003.
What were they talking in Doha?

Developing nations were complaining that they're facing difficulties in implementing WTO agreements.
so concessions were given to them.

1. SPS annex added under GATT (hope you saw the previous diagram of GATT annex)
a. SPS: Sanitary+ Phytosanitary Measures Agreement (on farm products)
b. Each nation can make its own Quality control rules
c. but they've to be scientific.
2. Earlier TRIPS (intellectual property rights) was strict.
a. now it was relaxed- and agreement changed saying that Laws should be made which supports existing medicines and public health interest at large.

items for new negotiations in Doha

1. Multilateral environmental agreements
2. Trade barriers on environmental goods & services
3. Fisheries subsidies =they harm environment, by encouraging too many Fishermen to chase insufficient fish

the Doha conference failed because it ended with out any consensus.
· Members were divided on competition policy & transparency in Govt. procurements.
· First world blames India to be the main villain for failure of Doha talks.

What was India's Problem in Doha?

SSM=special safeguard mechanism

· its a measure designed to protect poor farmers by allowing countries to impose a special tariff on certain agricultural goods in the event of an import surge or price fall
· For example, if USA sends so much cheap corn to India, that price of Corn become 50 paisa per kg. then India can put tariff barrier (= increase import duty on American Corn) so that prices become high again.
· otherwise, no one would by Indian Corn, and our farmers will starve.
· United States arguing that the threshold had been set too low.
· (e.g. if it was decided that if price fall to 5 Rs. / kg corn, then India could do this. but US wants that India shouldn't be allowed to act, unless price of corn falls very low, something like 50 paisa / kg.!)
· India doesn't agree with US on this.
Apart from this, India has insisted on a large number of special products that would not be exposed to wider market opening

Like I said ago, more mobile companies are good. Because it increases employment. (you can be a representative of some mobile co. or if you’ve retail store, you can sell pre-paid cards etc. or you can start your own mobile repair shop and so on…)
But same is not true about Agriculture sector, since 70% of India’s population depends on one way or another with the Agriculture sector. So if cheap foreign items are allowed, then it’ll create huge problem for their employment. Its easy for each American farmer to produce tonnes of grain (and sell his produce cheap), because every farmer has huge farms, latest machinery, fertilizers & great seeds+ continuous water supply + subsidy. But same is not true in India.

However the problem of food-price inflation should also be taken into account. (= read editorials, you’ll face such topics in mains / essay.)

More trouble for India

NAMA= Non-agricultural market access negotiations
European Union has threatened to approach the World Trade Organisation (WTO) again if India does not remove the inter-state tariff disparities. “We want India to get rid of its taxes on wines and spirits in different states to allow easier access to European wines, failing which we will approach the WTO again,"

Criticism of WTO

Mostly comes from environment activities.
1. WTO promotes industries, MNC (Multi-national corporations)
a. But these MNCs sometimes are involved in bad things. Eg. They pay huge bribes to Burma’s military regime for operating the gas lines, nickel mines etc. and employ forced laborers in it.
2. The infrastructure boom because of WTO (more foreign companies making factories in India) – leads to habitat / bio-diversity loss & pollution etc.
3. Its hard to put barriers on imported items, thus the domestic industries face tough competition which sometimes ruins them. (e.g. its not possible for Indian Toy maker to compete with Chinese toys in retail price.) and yet not much the Indian Govt. can do. If they put some ban on it, then China will go to WTO, and WTO will impose heavy fines on India.
4. 3rd world has to open its market for first world product without much benefit in the reverse process. (=3rd world’s products lag in race in 1st world’s market.)
e.g. as you know in colonial era, when India was under British Rule, if we exported our Indian Textiles to Britain, they’d put huge import tax on it. Thus our cloths would become very expensive in their market. So Britishers would only buy locally made cloths from Manchester. This sort of ‘protectionism’ in old times (almost upto 1995) = their companies made lot of profit during that era & had lot profit invested in Research and technology, so currently their products will be technically and in quality far superior than ours. So even if there is no barrier today, British people will buy their product and not ours. This argument runs on the same line like of climate change. America allowed its factories to pollute the atmosphere and thus became a developed nation but now, it wants the developing nations to stop polluting the world & cut their emissions!
Timeline – Evolution of WTO

1944

· Bretton Woods conference,
· they wanted to make ITO (International Trade Org.) but it didn’t happen.
1947:

· GATT (General Agreement on Trade & Tariffs) established
· It was criticized as being 'RICH MEN'S CLUB'
1986

· Uruguay Round of Talks
· Service & Intellectual Property rights related topics included in the debate
· 1993, everyone agreed on it
1994 (Marrakesh, Morocco)

- All nations signed on agreement & WTO was established
2004

- 148 nations are members of WTO, covering 94% of international trade

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Bihar grew by 11.03%, next only to Gujarat

Bihar is India's new miracle economy. In the five-year period between 2004-05 and 2008-09, Bihar's GDP has grown by a stunning 11.03%, way beyond the definition of 7% growth for a ``miracle economy''.

In this period, Bihar - traditionally a laggard state that actually saw a 5.15% negative growth in 2003-04 - is the second fastest growing state, just a shade behind Gujarat's well-publicized growth of 11.05%.

The latest CSO data gives out this dramatic story of Bihar on steroids. This high growth period also coincides with Nitish Kumar taking up the reins as chief minister from Lalu Yadav. It can, therefore, be said that good governance can work miracles for even the most backward of states. Not just Bihar, most of the traditionally backward states, including Orissa, Uttarakhand, Uttar Pradesh, Chhattisgarh and Jharkhand, have done well in this period, indicating a more inclusive growth at an all-India level.

There is no official data on poverty beyond 2004-05. So, the CSO data on the economic growth of the states, highlighting the fact that five of India's most backward states have grown at a rate beyond 7%, provides pointers to some kind of poverty mitigation. Apart from Bihar, the growth rate of the other four are: Uttarakhand 9.31%, Orissa 8.74% and Jharkhand 8.45%. The all-India growth during this period was 8.49%.

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Japan unveils record budget to boost economy

Japan unveiled on Friday a record trillion-dollar budget for next year despite growing worries about its debt mountain, seeking to revive an economy hit by its worst downturn in decades.

The move came as a batch of data added to worries that Japan's economic recovery is running out of steam, with the jobless rate rising and deflation continuing to hobble the world's number two economy.

Prime Minister Yukio Hatoyama's three-month-old government approved an unprecedented budget worth 92.3 trillion yen (1.0 trillion dollars) for the next financial year starting in April.

It predicted that Asia's biggest economy would grow 1.4 percent next year, marking the first expansion in three years, as it claws back from the worst downturn in decades.
"I will do my best to avoid a double-dip recession," Hatoyama told a news conference.
Hatoyama, who marked his first 100 days in office this week, has moved to slash what his party deems to be wasteful public spending and redirect money to struggling households.
His budget plan will pile further pressure on Japan's ailing public finances. The government will issue new bonds worth a record 44.3 trillion yen to cover the spending plans.
The Organisation for Economic Cooperation and Development has warned that Japan's public debt is set to soar to more than 200 percent of gross domestic product by 2011.
"Rising debt is worrisome for Japan," said Okasan Securities equity strategist Hirokazu Fujiki.
"With the new government, only the allocation of resources has changed and that hasn't prevented debt from rising further."
Japan's economy grew in April-June for the first time in five quarters on rebounding exports and government stimulus measures, but stubborn deflation and a weak job market are seen as a threat to the recovery.
The unemployment rate climbed to 5.2 percent in November from 5.1 percent in October, worsening for the first time in four months, the government said.
Core consumer prices fell 1.7 percent in November from a year earlier, the ninth straight month of drops, fanning worries that deflation could jeopardise a fragile recovery from the worst recession in decades.
Last week Japan's central bank said it was a "critical challenge" for Asia's biggest economy to overcome deflation, which hurts companies and encourages consumers to put off purchases.
The economy is still gradually recovering but increasingly appears to be heading for a lull, said Hiroshi Watanabe, an economist at the Daiwa Institute of Research.
"Unemployment has improved rapidly for the past three months (to October) as it emerges from the worst period, but it is likely to stay slightly above five percent in the coming months," he said.
The jobless rate was a record 5.7 percent in July.
Kyohei Morita, chief Japan economist at Barclays Capital, said the jobless rate could rise into the upper five percent range in the April-June quarter next year with retail and other sectors reducing job offers.
Deflation may ease due to an economic expansion and a planned tobacco tax hike, but inflation will not return any time soon, he added.
"It will be at least three years until we see price rises. Japan's economic recovery is not strong enough to break out of deflation," he said.
Japan was stuck in a deflationary spiral for years after its economic bubble burst in the early 1990s, hitting corporate earnings and prompting consumers to put off purchases in the hope of getting a lower price.

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Indian Foreign Trade Policy 2009-2014

What is Foreign Trade Policy?

The Union Commerce Ministry, Government of India announces the integrated Foreign Trade Policy FTP in every five year. This is also called EXIM [Export, import] policy. This policy is updated every year with some modifications and new schemes. New schemes come into effect on the first day of financial year i.e. April 1, every year. The Foreign trade Policy which was announced on Thursday August 28, 2009 is an integrated policy for the period 2009-14.

Objectives of Foreign Trade Policy 2009-14

1. To arrest and reverse declining trend of exports due to global recession is the main aim of the policy. This aim will be reviewed after two years.
2. To double India’s exports of goods and services by 2014.
3. To double India’s share in global merchandise trade by 2020 as a long term aim of this policy. India’s share in Global merchandise exports was 1.45% in 2008.
4. Simplification of the application procedure for availing various benefits
5. To set in motion the strategies and policy measures which catalyze the growth of exports
6. To encourage exports through a “mix of measures including fiscal incentives, institutional changes, procedural rationalisation and efforts for enhance market access across the world and diversification of export markets.

Aim in General: The policy aims at developing export potential, improving export performance, boosting foreign trade and earning valuable foreign exchange. FTP assumes great significance this year as India’s exports have been battered by the global recession. A fall in exports has led to the closure of several small- and medium-scale export-oriented units, resulting in large-scale unemployment.

Targets:

1. Export Target : $ 200 Billion for 2010-11
2. Export Growth Target: 15 % for next two year and 25 % thereafter.

EPCG [Export Promotion Capital Goods Scheme] Scheme:

1. Obligation under EPCG scheme relaxed.
2. To aid technological Upgrdation of export sector, EPCG Scheme at Zero Duty has been introduced.
3. Export obligation on import of spares, moulds etc. under EPCG Scheme has been reduced by 50%.

Refixation of Annual Average Export Obligation: 

Taking into account the decline in exports, the facility of Re-fixation of Annual Average Export Obligation for a particular financial year in which there is decline in exports from the country, has been extended for the 5 year Policy period 2009-14. Support for Green products and products from North East extended.

Announcements for FPS [Focus Product Scheme], FMS [Focus Market Scheme], MLFPS [Market Linked Focus Product Scheme]-

1. 26 new markets added in this scheme.
2. Incentives under FMS raised from 2.5 % to 3 %
3. Incentive available under Focus Product Scheme (FPS) rose from 1.25% to 2%.
4. Extra products included in the scope of benefits under FPS
5. Market Linked Focus Product Scheme (MLFPS) expanded by inclusion of products like pharmaceuticals, textile fabrics, rubber products, glass products, auto components, motor cars, bicycle and its parts.etc. (However, benefits to these products will be provided, if exports are made to 13 identified markets (Algeria, Egypt, Kenya, Nigeria, South Africa, Tanzania, Brazil, Mexico, Ukraine, Vietnam, Cambodia, Australia and New Zealand).
6. Focus Product Scheme benefit extended for export of green products and some products from the North East.
7. A common simplified application form has been introduced to apply for the benefits under FPS, FMS, MLFPS and VKGUY.

MDA [Market Development Scheme] & MAI [Market Access Initiative]-

Higher allocation for Market Development Assistance (MDA) and Market Access Initiative (MAI) has been announced.

Towns of Export Excellence (TEE) 

The following cities have been recognized as towns of export excellence (TEE)

1. Handicrafts : Jaipur, Srinagar and Anantnag
2. Leather Products : Kanpur, Dewas and Ambur
3. Horticultural Products: Malihabad

Scheme for Status Holders (Status Holders means star status holders)

1. Additional Duty Credit Scrip’s shall be given to Status Holders @ 1% of the FOB value of past exports accelerate exports and encourage technological Upgrdation.
2. This facility shall be available for sectors of leather (excluding finished leather), textiles and jute, handicrafts, engineering (excluding Iron & steel & non-ferrous metals in primary and intermediate form, automobiles & two wheelers, nuclear reactors & parts, and ships, boats and floating structures), plastics and basic chemicals (excluding Pharma products).
3. This facility shall be available up to 31 March, 2011.
4. Transferability for the Duty Credit scrip’s being issued to status holders under VKGUY [Vishesh Krishi & Gram Upaj Yojana] Scheme permitted only for the procurement of cold chain equipments.

Extension of Income Tax Exemption to EOU [Export Oriented Units] and STPI [Software Technology Parks of India]-

Income Tax exemption to 100% EOUs and to STPI units under Section 10B and 10A of Income Tax Act has been already extended for the financial year 2010-11 in the Budget 2009-10.

Extension of ECGC [Export Credit Guarantee Corporation (of India Ltd)]-

The adjustment assistance scheme initiated in December, 2008 to provide enhanced ECGC cover at 95%, to the adversely affected sectors, is continued till March, 2010.

Announcements for Marine sector-

1. Fisheries exempted from maintenance of average EO under EPCG Scheme (along with 7 sectors) however Fishing Trawlers, boats, ships and other similar items shall not be allowed for this exemption.
2. Additional flexibility under Target plus Scheme (TPS) / Duty Free Certificate of Entitlement (DFCE) Scheme for the marine sector.

Announcements for Gems & Jewellery Sector:

1. Duty Drawback is allowed on Gold Jewellery exports to neutralize duty incidence.
2. Plan to establish “Diamond Bourse (s) with an aim to make India and International Trading Hub announced.
3. Introduction of a new facility to allow import on consignment basis of cut & polished diamonds for the purpose of grading/ certification.
4. 13 value limits of personal carriage have been increased from $ 2 million to US$ 5 million in case of participation in overseas exhibitions.
5. The limit in case of personal carriage, as samples, for export promotion tours, has also been increased from US$ 0.1 million to US$ 1 million.
6. Time limit of 60 days for re-import of exported gems and jewellery items, for participation in exhibitions has been extended to 90 days in case of USA.

Announcements for Agro Exports-

1. Introduction of a single window system to facilitate export of perishable agricultural produce with an aim to reduce transaction and handling cost.
2. This system will involve creation of multi-functional nodal agencies. These agencies will be accredited by APEDA [Agricultural & Processed Food Products Export Development Authority]

Announcements for Leather Exports-

On the payment of 50 % applicable export duty, Leather sector shall be allowed re-export of unsold imported raw hides and skins and semi finished leather from public bonded ware houses.

Announcements for Tea Exports-

1. The existing Minimum value addition under advance authorization scheme for export of tea is 100 %. It has been reduced from the existing 100% to 50%.
2. DTA (Domestic Tariff Area) sale limit of instant tea by EOU units increased from 30% to 50%.
3. Export of tea has been included under VKGUY Scheme benefits.

Announcements for Pharma Exports-

1. Export Obligation Period for advance authorizations issued increased from existing 6 months to 36 months.
2. Pharmacy sector included under MLFPS for countries in Africa and Latin America & some countries in Oceania and Far East.

Announcements for Handloom Exports-

The claims under Focus Product Scheme, the requirement of “Handloom mark” was required earlier which has been removed.

Scheme for Export Oriented Units-

1. EOUs have been allowed to sell products manufactured by them in DTA (Domestic Tariff Area) up to a limit of 90% instead of existing 75%, without changing the criteria of ‘similar goods’, within the overall entitlement of 50% for DTA sale. (This means that instead of 75% these units can sell up to 90 % of their products in the domestic markets)
2. EOU allowed procuring finished goods for consolidation along with their manufactured goods, subject to certain safeguards.
3. Extension of block period by one year for calculation of Net Foreign Exchange earnings of EOUs kept under consideration.
4. EOU allowed CENVAT Credit Facility.

Announcements for Value Added Manufacturing (VAM)

To encourage Value Added Manufactured export, a minimum 15% value addition on imported inputs under Advance Authorization Scheme.

Announcements for Project Exports-

Project Exports and a large number of manufactured goods covered under FPS and MLFPS.

Fuel included in DEPB Scheme-

Custom duty component on fuel where fuel is allowed as a consumable in Standard Input-Output Norm included in factoring.

Easy Import of samples-

Number of sample pieces has been increased from the existing 15 to 50. This will facilitate the duty free import of samples by exporters.

Convertibility of Shipping Bills-

Greater flexibility has been permitted to allow conversion of Shipping Bills from one Export Promotion scheme to other scheme. Customs shall now permit this conversion within three months, instead of the present limited period of only one month.

Reduction in Transaction Costs-

1. Dispatch of imported goods directly from the Port to the site has been allowed under Advance Authorization scheme for deemed supplies. (Presently the duty free imported goods could be taken only to the manufacturing unit of the authorization holder or its supporting manufacturer.
2. Maximum applicable fee for 18 Authorizations/ license applications (except those mentioned in Chapter 3 of FTP) has been reduced to Rs. 100,000 from the existing Rs 1,50,000 (for manual applications) and Rs. 50,000 from the existing Rs.75,000 (for EDI applications).
3. No fee shall now be charged for grant of incentives under the Schemes in Chapter 3 of FTP.

Disposal of Manufacturing Wastes-

Disposal of manufacturing wastes / scrap will now be allowed after payment of applicable excise duty also before fulfillment of export obligation under Advance Authorization and EPCG Scheme. Earlier it was allowed after fulfillment of export obligation.

Announcements for Sports Weapon-

Licenses for the import of sports weapon will be issued now by Regional Authorities provided a NOC (No Objection Certificate) is issued by Ministry of Sports & Youth Affairs. (Earlier DGFT [Directorate General of Foreign Trade] Headquarters had to be approached for this)

Announcements for Medical Devices-

To solve the problem of medical device industry, the procedure for issue of Free Sale Certificate has been simplified and the validity of the Certificate has been increased from 1 year to 2 years.

Announcements for Automobile Industry-

Those Automobile industries which have their R&D establishment will be allowed free import of reference fuels (petrol and diesel), up to a maximum of 5 KL per annum, which are not manufactured in India.

Announcements for EDI Initiatives-

1. Export Promotion Councils & Commodity Boards have been advised to issue RCMC through a web based online system.
2. It is expected that issuance of RCMC would become EDI enabled before the end of 2009.

Inter Ministerial Committee

Mr. Anand Sharma announced that an Inter Ministerial Committee will be formed to redress/ resolve problems/issues of exporters.

Set up of Directorate of Trade Remedy Measures Announced

A Directorate of Trade Remedy Measures shall be set up, which will enable support to Indian industry and exporters, especially the Micro Small & medium Enterprises MSMEs in availing their rights through trade remedy instruments,

Duty Credit Scrip’s

Earlier the payment of customs duty for Export Obligation (EO) shortfall under Advance Authorization, DFIA or EPCG Authorization was allowed in cash only. Now this payment can be done in the way of debit of Duty Credit scrip’s.

Import of Restricted Items

Restricted Items can be imported now (as replenishment) against transferred DFIAs (Duty Free Import Authorizations) as the present DFRC (Duty Free Replenishment Card) scheme.

Dollar Credits

There is a provision for state-run banks to provide dollar credits

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