Deemed Exports :
India gets foreign aid from World Bank, Asia Development bank etc. for various prestigious projects in India for which global tenders are invited and India gets aid in foreign currency. Indian manufacturers and suppliers of services from India have to quote in competition with foreign suppliers. Evaluation of bids is done without considering customs duty. Since the supply of goods and services are for projects financed with free foreign
exchange, these supplies are treated as ‘deemed exports’.
Similarly, supplies to EOU units and supplies against annual advance authorisation are also ‘deemed exports’.
These are so called because the goods and services do not leave the country. Suppliers of goods and services get payment in Indian rupees and not in foreign currency.
Deemed exports refer to those transactions in which goods supplied do not leave country, and payment for such supplies is received either in Indian rupees or in free foreign exchange. Supply of goods as specified in para 7.02 of Foreign Trade Policy 2015-2020 shall be regarded as ‘deemed exports’, provided that goods are manufactured in India.
As per Foreign Trade Policy 2015-2020, following are treated as deemed exports :
♦ Supplies against Advance Authorisation/DFIA
♦ Supplies to EOU/STP/EHTP/BTP
♦ Supplies against EPCG authorization
♦ Supply of marine freight containers
♦ Supplies to projects against international competitive bidding
♦ Supplies to projects with zero customs duty
♦ Supply of goods to mega power projects against International Competitive Bidding
♦ Supplies to UN Agencies
♦ Supply of goods to nuclear projects through competitive bidding