Exports are the major focus of
India's trade policy and a thrust area is exports involving higher value
additions. Most items can be freely exported from India. A few items are
subject to export control in order to avoid shortages in the domestic
market, to conserve national resources and to protect the environment.
Export profits are exempt from income tax.
Higher royalty payments of 8% (net of taxes) are permitted on export
sales as compared to 5% on domestic sales. Export commissions up to 10%
are also permissible.
Inputs required to be imported for export production are exempted from
the basic customs duty. Export Oriented Units (EOUs) and Export
Processing Zones (EPZs) enjoy special incentives such as duty free
import of capital goods and raw materials for the purpose of export
production.
A Brand Equity Fund has been set up to popularize high quality India
brands in the world market. The corpus of the fund of Rs 5 billion (US
$156 million) will receive equal contributions from the government and
industry.
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