Exports

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

• Prohibited List : 10 entries in the Prohibited List, export of which is not permitted on religious and environmental considerations.
• Restricted List : 32 entries and 26 sub-entries, export of which is permitted against licence, following the amendment to the EXIM policy on 31st March'95. Prior to this amendment there were 29 enteries with 38 sub-enteries in this category.
• Canalised List : 6 entries and 17 sub-entiries, export of which is permitted through designated canalising agencies, following the amendments to the EXIM policy announced on 31st March'95. Prior to this amendment there were 6 enteries and 18 sub-enteries in this category

Special incentives for exports

Exports are the major focus of India's trade policy. The export promotion package compares favourably with incentives offered elsewhere in the world. It makes special effort to arract foreign investors to set up export oriented units in India.

• Export profits are exempt from income tax. Export profits are computed in the proportion of export turnover to total turnover.
• Higher royalty payments of 8% (net of taxes) are permitted on export sales as compared to 5% on domestic sales.
• Export commissions upto 10% are also permissible.
• The EPCG scheme allows import of capital goods at concessional rates of duty, subject to an export obligation. The scheme is also applicable to hotels, restaurants, travel agents and diagnostic centres.
• Inputs required to be imported for export production are exempted from customs duty under the Advance Licence Scheme. It allows free transfer of advance licences and can be availed of by any exporter.
• Export Oriented Units (EOUs) and Export Processing Zones (EPZs) enjoy special incentives such as duty free imports of capital goods and raw materials for the purpose of export production.