The Directorate General of Foreign Trade (DGFT) #
The Directorate General of Foreign Trade (DGFT) is an agency of the Ministry of Commerce and Industry of the Government of India that is responsible for the formulation and implementation of the country’s foreign trade policies. Established in 1991, the DGFT is responsible for promoting and facilitating India’s exports and imports and is the principal agency responsible for the administration of the Foreign Trade Policy. In this article, we will discuss the role and functions of the DGFT in detail.
Introduction to DGFT #
The DGFT is a nodal agency responsible for the formulation and implementation of India’s foreign trade policies. The agency is responsible for the regulation and promotion of foreign trade activities, including exports and imports. The DGFT is headquartered in New Delhi, and it has regional offices across the country.
The DGFT works in close coordination with various other government agencies, including the Ministry of Finance, Ministry of Commerce, and the Reserve Bank of India, to ensure that India’s foreign trade policies are implemented effectively.
Role of DGFT #
The role of the DGFT is to formulate and implement India’s foreign trade policies, in line with the government’s overall economic policies. The agency is responsible for the regulation and promotion of foreign trade activities, including exports and imports. The following are the major functions of the DGFT:
- Formulation of Foreign Trade Policy: The DGFT is responsible for formulating India’s Foreign Trade Policy in consultation with other government agencies and industry stakeholders. The Foreign Trade Policy aims to promote exports, facilitate imports, and enhance the overall competitiveness of Indian goods and services in the global market.
- Issuance of Import-Export Code (IEC): The DGFT issues Import-Export Codes (IEC) to companies and individuals involved in foreign trade activities. The IEC is a unique 10-digit number that is required for all import and export activities. It is mandatory for all exporters and importers to obtain an IEC from the DGFT.
- Administration of Export Promotion Schemes: The DGFT administers various export promotion schemes, including the Merchandise Exports from India Scheme (MEIS), Service Exports from India Scheme (SEIS), and the Export Promotion Capital Goods (EPCG) scheme. These schemes provide financial incentives to exporters to encourage and promote exports.
- Monitoring of Export and Import Trade: The DGFT is responsible for monitoring India’s export and import trade. The agency keeps track of the country’s foreign trade data and issues trade policy guidelines and directives to regulate the country’s trade activities.
- Resolution of Trade Disputes: The DGFT is responsible for the resolution of trade disputes related to foreign trade policies and regulations. The agency provides a platform for exporters and importers to raise their grievances and offers a mechanism for resolving trade disputes.
Services offered by DGFT #
The DGFT offers a range of services to exporters and importers, including the following:
- Issuance of Import-Export Code (IEC): The DGFT issues IECs to companies and individuals involved in foreign trade activities.
- Registration for Export Promotion Schemes: The DGFT provides registration for various export promotion schemes, including the MEIS, SEIS, and EPCG schemes.
- Issuance of Duty Credit Scrips: The DGFT issues Duty Credit Scrips to eligible exporters, which can be used to pay customs duty on imports of inputs and capital goods.
- Approval for Restricted Items: The DGFT provides approval for the import and export of certain restricted items, including hazardous chemicals, drugs, and weapons.
- Trade Facilitation: The DGFT provides trade facilitation services to exporters and importers, including guidance on customs procedures, shipping, and payment methods.
Export Promotion Schemes administered by DGFT #
The DGFT administers various export promotion schemes, which are designed to promote and encourage exports from India. The following are some of the major export promotion schemes administered by the DGFT:
- Merchandise Exports from India Scheme (MEIS): The MEIS provides financial incentives to exporters of specified goods, ranging from 2% to 7% of the value of exports. The scheme is aimed at promoting the export of specified goods to specified markets.
- Service Exports from India Scheme (SEIS): The SEIS provides financial incentives to service exporters, ranging from 3% to 7% of the value of exports. The scheme is aimed at promoting the export of specified services to specified markets.
- Export Promotion Capital Goods (EPCG) Scheme: The EPCG scheme provides a facility for the import of capital goods at zero duty for the purpose of production, subject to the fulfillment of specified export obligations.
- Advance Authorization Scheme: The Advance Authorization Scheme provides for the duty-free import of inputs that are used in the production of goods that are subsequently exported. The scheme enables exporters to import the required inputs at a reduced cost, thereby enhancing their competitiveness.
- Duty-Free Import Authorization (DFIA) Scheme: The DFIA Scheme provides for the duty-free import of inputs that are used in the production of goods that are subsequently exported. The scheme is designed to provide a level playing field to Indian exporters in the international market.
Conclusion #
In conclusion, the DGFT plays a vital role in the formulation and implementation of India’s foreign trade policies. The agency is responsible for promoting and facilitating exports and imports, and it administers various export promotion schemes to provide financial incentives to exporters. The DGFT also provides a range of services to exporters and importers, including the issuance of IECs, registration for export promotion schemes, and trade facilitation services. The agency works in close coordination with other government agencies and industry stakeholders to ensure that India’s foreign trade policies are implemented effectively.
The DGFT has been instrumental in promoting India’s exports and has contributed significantly to the country’s economic growth. The agency’s role in resolving trade disputes and providing a platform for exporters and importers to raise their grievances has been invaluable in maintaining a healthy and competitive business environment. With India’s continued focus on promoting exports and enhancing its competitiveness in the global market, the role of the DGFT is likely to become even more critical in the years to come.