Import policy

Import policy

Subject: Economy

Section: External sector

Context:

To augment domestic supplies of pulses and stabilize their retail prices, the government has extended the ‘free-import’ policy for two varieties — tur and urad — by a year to the end of FY23.

Concept:

In India, the import and export of goods is governed by the Foreign Trade (Development & Regulation) Act, 1992 and India’s Export Import (EXIM) Policy.

India’s Directorate General of Foreign Trade (DGFT) is the principal governing body responsible for all matters related to EXIM Policy. 

Importers are required to register with the DGFT to obtain an Importer Exporter Code Number (IEC) issued against their Permanent Account Number (PAN), before engaging in EXIM activities. After an IEC has been obtained, the source of items for import must be identified and declared.

The Indian Trade Classification – Harmonized System (ITC-HS) allows for the free import of most goods without a special import license.

Certain goods that fall under the following categories require special permission or licensing.

• Licensed (Restricted) Items – Licensed items can only be imported after obtaining an import license from the DGFT. These include some consumer goods such as precious and semi-precious stones, products related to safety and security, seeds, plants, animals, insecticides, pharmaceuticals and chemicals, and some electronic items.
• Canalized Items – Canalized items can only be imported via specified transportation channels and methods, or through government agencies such as the State Trading Corporation (STC). These include petroleum products, bulk agricultural products such as grains and vegetable oils, and some pharmaceutical products.

• Prohibited Items – These goods are strictly prohibited from import and include tallow fat, animal rennet, wild animals, and unprocessed ivory.

Free Import Policy– Under the regime, introduced in May 2021, specified pulses can be imported without any quantitative restrictions.

Duty-Free Import Authorisation (DFIA)-It is a scheme under which duty-free import of inputs, fuel, oil, energy sources, a catalyst which is required for the production of export goods is allowed.

Against such duty exemption, the importer is required to meet certain export obligations w.r.t. the finished goods.

The minimum value addition of 20% is mandatory to be required to be achieved.

This scheme is mainly used for imports of raw sugar to be used in producing an export product.