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The Directorate General of Foreign Trade (DGFT) serves as a prime driving force for India in the field of international trade promotion and regulation. Being a part of the Ministry of Commerce and Industry, DGFT serves as a strong backbone of India’s trade ecosystem, providing its services related to guiding exporters and importers in different ways, resolving disputes, and extending logistical support, all under one umbrella. A long network of 35 regional offices across the country presents seamless service to businesses. Whether it is the issuance of an Import Export Code or the formulation of export schemes, the actions of DGFT have impacted every nook and corner of the international trade framework.
The blog discusses the important functions, schemes of DGFT, and its role in shaping the foreign trade landscape of India.
Functions of DGFT
Directorate General of Foreign Trade (DGFT) operates under a multi-faceted mandate while regulating and facilitating India’s foreign trade. Briefly, the major functions of the DGFT are the following:
1. Policy Formulation
DGFT lays down foreign trade policies with a view to promote India’s global competitiveness. The policies will integrate economic, social, and environmental interests, encompassing the compulsions of the changing trade environment.
2. Export Promotion
DGFT administers various schemes for exporters, such as the Advance Authorization Scheme, EPCG, and RoDTEP.
3. Import Regulation
It ensures that imports are in line with domestic production objectives through the application of licensing systems and constraints. This measure protects local industries while still permitting vital imports.
4. Trade Facilitation
The DGFT, therefore, facilitates online platforms for documentation and compliance in order to smoothen the operations of export and import; digital systems reduce bureaucratic barriers.
5. Monitoring and Assessment
DGFT assesses the outcomes of the various trade policies, indicating their contribution towards the growth of India’s economy and refining policies for better delivery.
6. Compliance and Enforcement
It oversees compliance with the rules governing trade, applying severe punishment for offenses such as irregular trading practices.
7. Capacity Building
DGFT also conducts numerous training workshops and seminars for exporters to sensitize them to the gap in knowledge related to the requirements of international trade.
Key Schemes of DGFT for the Promotion of Trade
DGFT actively introduces schemes for the benefit of exporters and manufacturers while making sure their involvement in global trade is suitably incentivized with simplified processes to follow:
1. Advance Authorization Scheme
This gives the opportunity for duty-free importation of raw materials used in the production of exportable products.
2. RoDTEP Scheme
This is introduced for the refund of embedded taxes and duties on exports with a purpose of giving exporters an edge of price competitiveness.
3. Duty-Free Import Authorization (DFIA)
Under this scheme, duty exemptions are extended to inputs used in the manufacture of export goods.
4. Deemed Exports Scheme
Deemed exports refer to those products manufactured in India but not necessarily physically exported. They are entitled to tax refunds and benefits.
5. NIRVIK Scheme
This means increased insurance for exporters against financial risks that may come with international trade.
How DGFT Regulates Export and Import
1. Foreign Trade Procedures
DGFT defines the operational framework of the trade in a well-guided manner.
2. Exim Policy
Exim policy of India aligns the trade practices with international standards, while promoting growth and protecting domestic industries.
3. Trade Complaints and Quality Issues
DGFT arbitrates on the issue of dispute in trade and deals with various complaints raised by either the exporters or the foreign buyers.
4. Special Economic Zones (SEZs)
The body encourages investments in SEZs through tax exemptions and infrastructural benefits.
Challenges and Future Scope
In Spite of all its major contributions to the nation, DGFT is burdened with certain constraints like:
- Complexity of regulatory compliance.
- Low level of awareness about the available schemes amongst small exporters.
- Technological gaps in certain regional offices.
Key Services Provided by DGFT
1. DGFT Helpdesk Service
A platform for exporters and importers to seek support regarding various trade issues, this also includes their questions on policy and operation.
2. Verify UDIN
A Unique Document Identification Number verifier tool for authenticity and conformance purposes.
3. Export Management System
A system that, at every step, provides solutions to the exporter for the management of all its export-related activities.
4. SEIS – Service Exports from India Scheme
Incentive-based schemes to reward exporters of notified services.
5. Deemed Export
Services for transactions categorized under deemed exports, which enable companies to enjoy the benefits of tax exemptions and refunds.
6. Enforcement Cum Adjudication
Mechanisms for addressing violations of trade regulations and policies.
7. Pre-Shipment Inspection
Such services ensure that goods meet the required standards before export.
8. Information to Customs Authorities
Mechanisms for information-sharing to facilitate the customs-clearing process.
9. IEC Profile Management
Services related to the issuance, modification, and management of Importer Exporter Code-IEC.
10.Advance Authorization/DFIA
Provision of duty-free import facilities for inputs used in the production process of export products.
11. EPCG – Export Promotion Capital Goods
A scheme permitting the importation of capital goods at duty-free rate to stimulate export production.
12. RoSCTL stands for Rebate of State and Central Taxes and Levies.
Incentive schemes that try to reduce the cost burden on exporters by rebating taxes and levies.
13. e-Miscellaneous Payments/e-Refunds
Online systems for the payments and refund claims about the export-import transactions.
14. Certificate of Origin:
Issuance of the certificates of origin that help in fulfilling the requirements necessary for the execution of the various trade agreements.
15. Interest Equalization Scheme
Financial incentives available to exporters by way of interest subsidies on pre- and post-shipment credit.
16. Policy Relaxation Committee
Providing services of relaxation and approval of exemptions to determined policies.
17. Consumer Complaints & Trade Disputes
A grievance redressal platform on quality-related issues and trade disputes.
18. Gems & Jewellery Schemes
Schemes and services tailored to support exports in the gems and jewelry sector.
19. Transport & Marketing Assistance
Financial support for export promotion and reduction in logistics costs.
20.Jan Sunwai Facility
A public grievance redressal system to address complaints and queries.
Final Note
The Directorate General of Foreign Trade (DGFT) remains one of the strong pillars of India’s emergence as a global leader in trade through fostering transparency, innovative trade policies, and export-oriented growth.
