IMPORT
POLICY
The economic needs of the country, effective use of foreign exchange and
industrial as well as consumer requirements are the basic factors which
influence India's import policy. On the import side the policy has three
objectives:
- to make necessary imported goods
more easily available, including essential capital goods for
modernizing and upgrading technology;
- to simplify and streamline
procedures for import licensing;
- to promote efficient import
substitution and self-reliance.
There are only 4 prohibited goods:
tallow fat, animal rennet, wild animals and unprocessed ivory. There is
a restricted list, but most of the restrictions are on grounds of
security, health and environmental protection or because the goods are
reserved for production by small and tiny enterprises, which are
home-based or village-based and which require low skills and employ a
large number of people. But the policy of restricting import of consumer
goods is changing.
The Indian government's clearly laid down policy is to achieve, through
a series of progressive steps, the average tariff levels prevalent in
the ASEAN region. The basic customs tariff rate now ranges from 0 to 40%
plus additional duty of 2%; the average rate is about 30%.
Imports are allowed free of duty for export production under a duty
exemption scheme. Input-output norms have been specified for more than
4200 items. These norms specify the amount of duty-free import of inputs
allowed for specified products to be exported.
There are no quantitative restrictions on imports of capital goods and
intermediates. Import of second-hand capital goods is permitted provided
they have a minimum residual life of 5 years. There is an Export
Promotion Capital Goods (EPCG) Scheme under which exporters are allowed
to import capital goods (including computer systems) at concessionary
customs duty, subject to fulfillment of specified export obligations.
Service industries enjoy the facility of zero import duty under the EPCG
Scheme. Likewise, hospitals, air cargo, hotels and other tourism-related
industries. Software units can use data communication network to export
their products. |
