The foreign trade policy in the world’s largest democracy is set to be extended for a year. Export Promotion Capital Goods (EPCG) and Duty-Free Import Authorisation (DFIA) are two of the policies that the government has decided to keep for the year. The EPCG allows for importing capital goods to keep improving the export technology. The DFIA allows for importing essential goods without any duty. This is a very bold move towards bolstering the International Economy towards the best curves.
Extending The Validity Of Import Policies
Exports in the Indian economy are around 300 billion US Dollars, while imports are approximately 400 billion. The move by the government to extend its foreign trade policy, despite the lockdown, is in view of the International Economy’s future. The Export Promotion Capital Goods (EPCG), Duty-Free Import Authorisation (DFIA) and other such policies have their validity extended by a year.
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Export Promotion Capital Goods (EPCG)
The EPCG policy allows importing products that help in improving India’s export trade. These are industrial machinery and equipment that could be used in mass production. The computer software allows running an industry or a part of it. Maintenance of such industries requires a lot of spares as well. The reduction in import duties on these products would ensure that more machinery could be purchased from specialists in other countries. Improved industries refer to better exports and thereby help India maintain a strong presence in the International Economy.
Duty-Free Import Authorisation (DFIA)
DFIA allows for the import of inputs without any import duties, provided these inputs have to be physically incorporated in the export output. Fuels, oils, catalysts that are used during the production process of export products are allowed to be imported without duties. Extending this policy until March 2021 is an excellent initiative to support the International Economy in these difficult times.