Exports to SAARC Countries :
In recognition of the fact that the geographical proximity, cultural and religious affinity and economic synergies can be used to mutual benefit, the seven countries of South Asia (neighboring countries) viz. India, Nepal, Pakistan, Bangladesh, Sri Lanka, Bhutan and Maldives have organized themselves into an association called the South Asian Association for Regional Cooperation (SAARC).
The ultimate objective is to establish a Free Trade Area in the region. In tune with this, India's Exim Policy provides that the Director General of Foreign Trade may issue from time to time such instructions or frame such schemes as may be required to promote trade and strengthen economic ties with the neighboring countries.
Accordingly, the trade with the neighboring countries is governed as under.
Bangladesh is our largest export market in the region. The bilateral trade is carried out within the framework provided by the India Bangladesh Trade Agreement with mutually Most Favored Nation (MFN) treatment accorded to each other.
There is traditional free trade and commerce between India & Bhutan. Commercial transactions are carried out in Indian Rupees and Bhutanese Ngultrum. The Customs Houses have issued Trade Notices for prescribing procedure for export of excisable goods to Bhutan.
India-Maldives trade is regulated in terms of bilateral Trade Agreement signed in 1981.
Indo-Nepal relations on trade and other related matters are governed by the bilateral Treaties of Trade and Transit and Agreement for Cooperation to Control Unauthorized Trade. The Ministry of Finance has issued various notifications prescribing procedure for export of excisable goods to Nepal.
India's Trade with Pakistan is constrained by the discriminatory policy adopted by Pakistan against imports to India. While we accord MFN treatment to imports from Pakistan, they allow their private sector to import only out of a list of 595 items from India. Pakistan is yet
to allow its trade with India on a free and MFN basis.
Sri Lanka :
Sri Lanka has traditionally been an important export market for India and is second largest importer of Indian goods in the region after Bangladesh. The bilateral trade is carried out in accordance with the provisions of the Trade Agreement 1998. The trade is in free convertible currencies and on Most Favored Nation basis.
Export Declaration Forms
It is pertinent to note that export of goods to Nepal and Bhutan is not subject to declaration on GRIPP forms. In other words, exports to Bangladesh, Pakistan, Maldives & Sri Lanka are subject to usual declaration on GRIPP forms and are governed by normal exchange control regulations as applicable to other countries.
Methods of Payment for Export of Goods and Services to Nepal and Bhutan :
Rupee transfers from accounts in India of Indians, Nepalese and Bhutanese resident in Nepal and Bhutan as well as of Indian, Nepalese and Bhutanese firms, companies or other organizations (including banks) functioning in these countries against exports to these countries from India
or against any other transaction can be made freely without reference to Reserve Bank.
Payments from other persons in or resident in Nepal and Bhutan (such as foreign tourists, foreign nationals employed or otherwise engaged in Nepal and Bhutan, transit passengers on short visits to Nepal and Bhutan) in settlement of transactions with persons, firms and companies resident in India should be made in convertible foreign currency.
Benefits for Exporters
Exports to SAARC countries are eligible to all benefits available to exports to other countries of the world.
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