MEANING OF IMPORT

In economics, an import is any good (e.g. a commodity) or service brought into one country from another country in a legitimate fashion, typically for use in trade. Import goods or services are provided to domestic consumers by foreign producers. An import in the receiving country is an export to the sending country.

Imports, along with exports, form the basis of international trade. Import of goods normally requires involvement of the Customs authorities in both the country of import and the country of export and is often subject to tariffs and trade agreements. While "imports" are the set of goods and services imported, "Imports" also means the economic value of all goods and services that are imported. The macroeconomic variable I usually stand for the value of these imports over a given period of time, usually one year.

Balance of trade

A country has demand for an import when domestic quantity demanded exceeds domestic quantity supplied, or when the price of the good (or service) on the world market is less than the price on the domestic market.

The balance of trade, usually denoted NX, is the difference between the value of the goods (and services) a country exports and the value of the goods the country imports.

NX = X - I, or equivalently I = X - NX

A trade deficit occurs when imports are large relative to exports. Imports are impacted principally by a country's income and its productive resources. For example, the US imports oil from Canada even though the US has oil and Canada uses oil. But consumers in the US are willing to pay more for the marginal barrel of oil than Canadian consumers are, because there is more oil demanded in the US than there is oil produced.

In macroeconomic theory, the value of imports I can be modeled as a function of the domestic absorption A and the real exchange rate σ. These are the two largest factors of imports and they both affect imports positively.

I = I (A, σ)

Top Ten Import Products Values in US$ Millions

RankName of Commodity

Apr 2005 - Feb 2006 Apr 2006 - Feb 2007

Import Values of Goods

Import Values of Goods

%Growth %Growth %Share %Share

Values (INR in Crores)

Values (US$ in Millions)

Values (INR in Crores)

Values (US$ in Millions)

Values (INR in Crores)

Values (US$ in Millions)

Values (INR in Crores)

Values (US$ in Millions)

1 India Import Of - WHEAT

. . 1,417.61 312.24 . . 0.19 0.19

2

India Import Of - PETROLEUM, CRUDE & PRODUCTS

175,945.00 39,757.45 236,601.84 52,112.76 34.47 31.08 32.10 32.10

3 India Import Of - ELECTRONIC GOODS

52,093.43 11,771.30 65,281.46 14,378.58 25.32 22.15 8.86 8.86

4 India Import Of - GOLD

42,742.00 9,658.21 58,704.81 12,930.03 37.35 33.88 7.97 7.97

5

India Import Of - MACHRY EXCPT ELEC & ELECTRONIC

39,209.91 8,860.08 56,216.24 12,381.91 43.37 39.75 7.63 7.63

6

India Import Of - PERLS PRCUS SEMIPRCS STONES

38,229.69 8,638.58 30,061.51 6,621.20 -21.37 -23.35 4.08 4.08

7 India Import Of - OTHER COMMODITIES

23,551.34 5,321.78 18,258.34 4,021.49 -22.47 -24.43 2.48 2.48

8 India Import Of - ORGANIC CHEMICALS

18,839.31 4,257.03 22,405.24 4,934.87 18.93 15.92 3.04 3.04

9 India Import Of - IRON & STEEL

17,413.25 3,934.79 24,413.75 5,377.25 40.20 36.66 3.31 3.31

10

India Import Of - COAL,COKE & BRIQUITTES ETC.

15,332.59 3,464.63 18,363.64 4,044.69 19.77 16.74 2.49 2.49

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:

1. to make necessary imported goods more easily available, including essential capital goods for modernizing and upgrading technology;

2. to simplify and streamline procedures for import licensing;

3. 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.

Indian Import PolicyImport is the antonym of export. In the terms of economics, import is any commodity brought into one country from another country in a legal way. The economic needs of the country, effective use of foreign currency are the basic factors which influence India's import policy. There are mainly 3 basic objectives of the import policy of India:

To make the goods easily available. To simplify importing license. To promote efficient import substitution.

Current Scenario of Imports in IndiaThere are few goods which can not be imported namely tallow fat, animal rennet, wild animals, unprocessed ivory etc. Most of the restrictions are on the ground of security, health, environment protection etc. Imports are allowed free of duty for export production. Input output norms have been specified for more than 4200 items. The norms tell about the amount of duty free import of inputs allowed for specified products. There are no restrictions on imports of capital goods. Import of second hand capital goods whose minimum residual life is of five years is permitted. Export Promotion Capital Goods (EPCG) scheme provides exporters to import capital goods at a concessionary custom rates. In the past 30 years Indian imports have risen quite dramatically. At present imports accounts for 17% of the GDP. Capital goods have been continued to be imported and in the last three years, their share has fallen from 25% to 22%.

Major Indian ImportsThere are facilities available for the service industries to enjoy the facility of zero import duty under EPCG scheme. Some of the major imports of India are edible oil, newsprint, petroleum and crude products, crude rubber, fabrics, electronic goods etc.

Problems due to Large Import of Productsthe recent trend of imports is of some concern. The regular imports of oil reflect upon the fact that India is not able to produce the quantity of oil required in India. Moreover the increase in the imports of products also highlights the fact that the Indian domestic industries need to be developed. It also creates pressure on the economy as the money ultimately has to be bearded by the people.

InspectionInspection Customs inspectors have considerable authority and discretion in matters of inspection and valuation of imported items. Any imported goods or parts of any shipment may be examined and tested. Customs officials may require the importer to furnish information or produce any contract, broker's note insurance policy, catalogue or other document to help ascertain the rate of duty or tariff valuation.

Customs officials have the authority to determine whether imports conform to the description in the import license. Fines and penalties can be severe if imports are unauthorized or if imports contravene control regulations.

Packages and goods can be confiscated if they differ significantly from the description given in documents such as the bill of entry or if contents of a shipment are wrongly described in terms of value, quality, and quantity or if other goods are concealed or mixed with those described in the documents.

Export & Import - Industrial PolicyOver the last four decades India has recorded remarkable expansion and diversification in practically all areas of industrial development. India's vast resources-human, agricultural, mineral and industrial- have been fully exploited for this purpose. The New Industrial Policy has helped in catalyzing foreign investment into India. The total amount of foreign direct investment approval which was Rs 5,341 million in 1991, swelled to Rs 141,871.9 million in 1994. Of the total FDI approvals, 80% are in the priority sectors such as power, oil refineries, electronics and electrical equipment, chemicals, telecommunications, food processing etc.

Policy Resolution of 1956 and the Statement on Industrial Policy of 1991 provide the basic framework for the overall industrial policy of the Government in regard to the manufacturing industries. In the initial stages of the country's development, growth of industry was regulated through the granting of industrial licenses and other industrial approvals. The Industries (Development and Regulation) Act, 1951 was the principal legislation providing the legal basis for industrial licensing. The industrial policy announced on 24th July, 1991 substantially dispensed with industrial licensing, announced measures facilitating foreign investment and technology transfers, and threw open the areas hitherto reserved for the public sector.

The private sector can now operate in all areas except those of strategic concern such as defence, railway transport and atomic energy. The list of industries reserved for the public sector now stands reduced to 6. Private participation is permitted in some specific areas in this list as well, such as mining; oil exploration, refining and marketing; and parts of the railway transport sectors.

The requirement of obtaining an industrial license for manufacturing activity is limited to:

1. Industries reserved for the pubic sector. 2. 16 industries of strategic, social or environmental concern.3. Industries reserved for the small scale sector.

All other industries are exempt from licensing, and only subject to the locational restrictions of metropolitan areas.

Industrial Policy of MAHARASHTRAMaharashtra is the third largest state in India both in area and population. About 70% of the population depends on agriculture. It has 12,082 MW of power and 100% of the villages are electrified. Although the state accounts for 9.2% of the total population of India; it shares 11% of the industrial units, over 17% of labor, 16% of investment and 23% of the value of industrial output. The Santa Cruz Electronics Export Processing Zone is a free trade zone for cent per cent export.

Land area: 307,690 sq. km. Population: 79 millionCapital: MumbaiPer Capita Income: Rs 13,112Inflation Rate: 10.9%

Maharashtra is considers one of the best places for investment. Mumbai, the capital of Maharashtra, is also the financial capital of India. The state has an international mindset, is investment friendly and has the highest investments in India. It has a well diversified and highly productive industrial base with a positive work culture. It is globally connected through airports and sea ports from Mumbai. International companies like the Coca Cola, Kellogg’s, Du Pont, Procter and Gamble; Lever etc. have set up shop in Maharashtra.

Incentives: 75% concession on the cost of preparing feasibility studies Exemption from stamp duty for small-scale units on mortgages in

favor of state FIs and banks Special capital incentives of up to 30% of fixed capital investment for

small-scale units Capital investment subsidy of 15% for medium-scale units in

Vidarbha and Marathwada Refund of electricity duty for EOUs and EHTP units for periods

between 5 and 10 years Concession on the capital cost of power supply to prestigious units Sales tax relief of 60% of fixed capital investment for Area B (5

years) Sales tax relief of 80% of fixed capital investment (7 years) for Area

B for pioneer units

Import RestrictionsLicensing, Quotas and Prohibitions

Import approval is based on compliance with procedures whereby specific items may be imported by certain types of importers under certain types of licenses. Importers are divided into three categories for the purpose of import licensing:

1. actual users; An actual user applies for and receives a license to import any item or an allotment of an imported item as required for his own use, not for business or trade in that item.

2. Registered exporters; defined as those who have a valid registration certificate issued by an export promotion council, commodity board or other registered authority designated by the Government for purposes of export-promotion.

3. Others.

The two types of actual user license are: 1. general currency area licenses which are valid for imports from all

countries, except those countries from which imports are prohibited;2. Specific licenses which are valid for imports from a specific country

or countries. Aside from the types of licenses listed, the Open General License is perhaps the most liberalized type of license available for certain items and certain types of importers.

Licenses are valid for 24 months for capital goods and 18 months for raw materials components, consumable and spares, with the license term renewable. Import licenses may be obtained from the director general of foreign trade ( Office of Chief Controller of Imports and Exports, Ministry of Commerce, Udyog Bhawan, New Delhi 110011, Tel: 301-7777 ). Traders are advised to consult the Handbook of Procedures which is published by the Ministry of Commerce and is part of the Import and Export Policy for further details.

Regulations and ProceduresAll imports now fall into one of the following four categories:

1. Freely importable items; most capital goods fall into this category. Items in this category do not require import licenses and may be freely imported by any individual or entity.

2. Licensed imports; certain items can be imported only with licenses and only by actual users. The current "negative list" of items in this category includes several broad product groups that are classified as consumer goods; precious and semi-precious stones; products related to safety and security; seeds, plants and animals; some insecticides, pharmaceuticals and chemicals; some electronically items; several items reserved for production by the small-scale sector; and 17 miscellaneous or special-category items. In April 1993 the government ended licensing requirements for several agricultural items, including prawns, shrimp and poultry feed.

3. Canalized items; Items under this category can be imported only by specified public-sector agencies. These include petroleum products (to be imported only by the Indian Oil Corporation); nitrogenous phosphatic, potassic and complex chemical fertilizers (by the Minerals and Metals Trading Corporation) vitamin- A drugs (by the State Trading Corporation); oils and seeds (by the State Trading Corporation and Hindustan Vegetable Oils); and cereals (by the Food Corporation of India).

4. Prohibited items; only three items-tallow fat, animal rennet and unprocessed ivory-are completely banned from importation.

Tariff Schedule 1. Classification The Indian classification on tariff items follows the Harmonized Commodity Description and Coding System (Harmonized System or HS). India has fully adopted HS through the Customs Tariff Amendment Act, 1985. There has been some modification of HS as appropriate to the Indian environment concerning excise taxes.

2. Customs duties The Customs Act governs the levying of tariffs on imports and exports and frames the rules for customs valuation. The Customs Tariff Act specifies the tariffs rates and provides for the imposition of anti-dumping and countervailing duties. With some exceptions, most tariffs are ad valorem. Tariff rates, excise duties, regulatory duties, countervailing duties and the like are revised in each annual budget. The April 1993 trade policy merged the auxiliary duty with the present duty. Total duties on imports now consist of basic duty (ranging from zero to 65%) plus additional or countervailing duties (equal to excise duties). On manufactured "luxury" items, total import taxes can amount to 150%. As import duties are quite product specific and may be altered in mid-year, companies are advised to verify the relevant rates for their products. Rates are published by the Central Board of Customs and Excise within the Ministry of Finance's Department of Revenue. They may be obtained from the public relations officer (Customs House, Indraprastha Estate, New Delhi, 110 002, Tel: 331 9451).

3. Duty Exemption Scheme Indian import policy includes a duty exemption scheme for registered exporters so that they may import the inputs required for export production at international prices and free from duty in order to make their exports more competitive. Imported items which are exempt from customs duty are raw materials, components and consumables. The customs schedule makes multiple provisions for tariff concessions and exemptions. The government has wide discretionary power to declare full or partial duty exemptions "in the public interest" and to specify conditions such as end-use provisions. Almost half of India's total inputs enter under concessional tariffs, though the use of exemptions is falling in tandem with the tariff-reduction programme.

Negative ListQuantitative restrictions on imports of capital goods and intermediates have been almost completely removed. The import of second hand capital goods is allowed, provided they have a residual life of 5 years.

Import of all items, except those included in the Prohibited List, is permissible free of duty for export production under a Duty Exemption scheme. In order to facilitate expeditious approvals of import proposals under this scheme, input-output norms for more than 3,000 items have been announced. Negative List consisting of: prohibited list, canalized items, restricted list.

Prohibited List Tallow, Fat and/or Oils, rendered, unrendered or otherwise,

of any animal origin including the following:- o Lard stearine, oleo stearine, tallow stearine, lard oil,

oleo oil and tallow oil not emulsified or mixed or prepared in any way;

o Meat's-foot oil and fats from bone or waste; o Poultry fats, rendered or solvent extracted; o Fats and oils of fish/marine origin, whether or not

refined, excluding cod liver oil, squid liver oil or a mixture thereof and Fish Lipid Oil containing Eicospentaenic acid and Decosahexaenoic acid; and

o Margarine, imitation lard and other prepared edible fats of animal origin.

Animal rennet Wild Animals including their parts and products and ivory

Canalized List Petroleum products, namely,

o Aviation Turbine fuel o Crude Oil o Motor Spirit o Bitumen (asphalt) - Paving Grade o Furnace Oil (except low sulphur heavy stock/low sulphur waxy

residue) and o High Speed Diesel

All types of nitrogenous, phosphatic and potassic fertilizers except Di-Ammonium phosphate (DAP), Muriate of Potash (MOP), Mono Ammonium Phosphate (MAP), Sulphate of Potash (SOP), NP Fertilisers and NPK Fertilisers.

Coconut Oil, RBD Palm Oil and RBD Palm Stearin. Seeds (Copra, Groundnut, Palm, Rapeseed, Safflower, Soyabean,

Sunflower, and Cotton). All other non-edible oils but excluding tung oil/China oil and natural

essential oils; seeds or any other material from which oil can be extracted not specifically mentioned above or elsewhere in the policy.

Palm Stearin, excluding crude palm stearine, palm kernel oils and tallow amines of all types.

Cereals, excluding feed grade maize (i.e. maize unfit for human consumption but fit for use as poultry or animal feed).

Export of goods is allowed freely, except for a few items in the Negative List of Exports:

Restricted List Consumer Goods: All consumer goods, howsoever described, of

industrial, agricultural, mineral or animal origin, whether is SKD/CKD condition or

o Consumer electronic goods, equipment and systems, howsoever, described.

o Consumer telecommunication equipment. o Watches in SKD/CKD or assembled condition as well as

movements (mechanical); watch cases; watch dials. o Cotton, woollen, silk, man-made and blended fabrics including

cotton terry towel fabrics. o Concentrates of alcoholic beverages o Wines (tonic or medicated) o Saffron o Cloves, Cinnamon and Cassia o Sports goods/equipment ** o Cameras ** o Gifts of consumer goods **

Precious, Semi-Precious and Other Stones o Cubic Zirconia o Stones

Rough diamonds; Synthetic stones finished or unworked (other than

synthetic ruby unworked); and Emerald/rubies and sapphires, semi-precious and

precious stones and pearls (real or cultured) o Granite, porphyry, basalt, sand and other monumental or

building stone, whether or not roughly trimmed or merely cut, by sawing or otherwise, into blocks or slabs.

o Marble, travertine, ecaussine and other calcareous monumental; or building stone of an apparent specific gravity of 2.5 or more, whether or not roughly trimmed or merely cut, by sawing or otherwise into blocks or slabs.

o Onyx Safety, Security and Related items

o Paper for security printing, currency paper, stamp paper and other special types of paper

o Empty/discharged cartridges of all bores/sizes

o Fire arms o Ammunition o Explosives o Chloro Fluoro Hydro Carbons (Freon Gases)

Trichloro fluoro methane Dichloro difluoro methane Trichloro trifluoro methane Dichloro Tetrafluoro ethane Chloro pentafluoro ethane Bromo chloro difluoro methane Bromo trifluoro methane Dibromo tetrafluoro ethane

o Communication jamming equipment, static/mobile/manporable o Electronic components for (i) above, including Antennae, RF

Power amplifiers, noise generators Acetic Anhydride Seeds, Plants and Animals

o Animals, Birds and Reptiles (including their parts and products) o Stallions and Broodmares o Livestock (excluding equine), Pure line, stocks, birds eggs,

frozen semen/embryo, parent stock (poultry) and commercial chicks

o Plants, fruits and seeds Insecticides and Pesticides

o Any pesticide, insecticide, weedicide, herbicide, rodenticide and miticide, which have not been registered or which are prohibited for import under the insecticides Act, 1969 and formulations thereof.

o DDT--Technical 75 Wdp ## Electronic Items

o Cathode ray tubes, the following:- 20" and 21" size colour T.V. picture tubes, sub-assembly thereof and assembly containing colour T.V. picture tube **

o Populated, loaded or stuffed printed circuit boards ** o Audio magnetic tapes in all forms excluding 35mm and 16mm

sprocketed tapes ** o Video magnetic tapes in hubs and reels, rolls, pancakes, jumbo

rolls- in all forms **

o Computer systems, including personal computers, up to a CIF value below Rs.1.50 lakhs or key boards or monitors, each with a CIF value of below Rs. 7,500/-. For this purpose, a Computer System will consists of a single CPU including one keyboard and monitor, and inbuilt peripherals, but excluding any add on peripherals **

Drugs and Pharmaceuticals o All types of Penicillin o 6-APA o Tetracycline/Ox tetracycline and their salts o Streptomycin o Rifampicin o Intermediates of Rifampicin, namely

3 Formyl Rifa S.V. Rifa S / Rifa S Sodium; and 1-Amino-4-Methyl Piperazine

o Vitamin B1, Vitamin B2 and their salts o Vitamin B12 **

Chemicals and Allied Items o Allyl Isothiocyanate o Capacitor fluids-PCB type o Poly Brominated Biphenyl’s o Poly Chlorinated Biphenylso Poly Chlorinated Terphenyls o Tris (2, 3 Di-Bromopropyl) Phosphate o Crocidolite o Hazardous Wastes o Hazardous Chemicals

Items Relating to the Small Scale Sector o Copper Ox chloride o Dimethyl Sulphate o DNPT (Dinitroso Pentamethylene Tetra mine) o Flavouring essences - all types (including those for liquors) o Niacin/Nicotinic Acid/Niacinamide/Nicotinamide/Acidamide o Mixtures of odoriferous substances/mixtures of resinoids o Phthalate Plasticisers o Perfumery compounds/synthetic essential oils o Lead and rule cutters o Mounting tables ** o Paper cutting knives of all sizes

o Paper cutting machines, excluding machines with devices such as automatic programme cutting or three knife trimmers

o Wire stitching machines single headed ** o Drawing and Mathematical Instruments ** o Domestic Water Meters ##

Miscellaneous Items o Aircraft and helicopters o Ships, trawlers, boats and other water transport crafts o Commercial and Passenger automobile vehicles, including two

wheelers, three wheelers and personal type vehicles. o Gold in any form including Liquid Gold ** o Coir (fibre/yarn/fabrics) o Newsprint o Cotton Yarn ** o Raw Silk/ Silk Cocoons o Natural Rubber o Diesel generating sets upto 1500 KVA (excluding DG sets with

no break system) ** o Electric portable generators upto 3.5 KVA ** o Radio active material o Rare earth oxides including rutile sand o Cinematography feature films and video films o Crude palm stearin o Feed grade maize (i.e. maize unfit for human consumption but

fit for use as poultry or animal feed) o Naphtha o Silver in any form ** o Spinneret’s made mainly of gold ** o Batteries and tyres of passenger automobile vehicles including

two wheelers, three wheelers and personal type vehicles ## Special Categories

o (Restricted) items required by hotels, restaurants, travel agents and tour operators

o (Restricted) items required by recreational bodies

Packaging and LabellingPacking and labelling requirements India's ports are mostly located in tropical region, which means special care is needed when packing goods for shipment. Damage may be caused by damp, heat, exposure to sun and rain, insects, fungus and moulds. Therefore, waterproofing of shipments is necessary and use of cases lined with zinc ortin is recommended.

Special attention is needed in packing imported machinery, which may be transported through tropical areas as well as desert areas. Caution is needed when packing to protect against high humidity, dust and sand. There are origin requirements for the labelling of imported merchandise. Labels must indicate the country or place where the goods were produced, orthe name and address of the manufacturer.

Labelling should be in English, and words indicating country of origin should be as large and as prominent as any other English wording on the package or label. This requirement applies to every article, label or wrapper that has any words in English. There are standards in effect for marking and labelling related to weights and measures for packaged goods imported into India and intended for retail sale.

FOREIGN TRADE POLICY (2004-09)

Annual Supplement 2005

The Annual Supplement 2005 focuses on making manufacturing sector more competitive through concrete policy measures.

It contains packages for export-oriented units, agriculture, gems and jewellery, marine, handloom, tea and service sectors.

To engage the states in task of export promotion, it proposes the formulation of Inter-State Trade Council.

It proposes to remove export cases on export of all agricultural and plantation commodities levied under various Commodity

Board Acts.

AS announces that the Government would develop a trademark for Handloom on lines of ‘Wool mark’ and ‘Silk mark’ to promote quality products.

The AS contains a number of initiatives for modernizing the marine sector which inter alia allows duty free import of specified

Inputs based on past export performance.

Addressing the port congestion problem in a unique way, the new initiative aims at reducing congestion at the major ports. Thus,

Facility for export obligation in rupee payment under EPCG has been extended to the minor ports, ICDs and CFS also.

It contains a number of major initiatives towards reduced paper transactions through Procedural simplification.