Status Holder Scheme under FTP 2023

[YAGAY andSUN]

The Status Holder Scheme is an important component of India's Foreign Trade Policy (FTP) aimed at promoting exports and recognizing the contributions of leading exporters in the country. The scheme provides various benefits, recognition, and incentives to exporters who have demonstrated consistent performance and significant contribution to India’s foreign trade.

Under the Foreign Trade Policy 2023, the Status Holder Scheme is designed to encourage exporters to engage in higher-value and large-scale export activities, offering them various privileges and exemptions. The scheme helps in enhancing India’s export competitiveness and also fosters export growth in a sustainable and structured manner.

Key Features of the Status Holder Scheme under FTP 2023

1. Eligibility Criteria:
   • To be eligible for the Status Holder Scheme, exporters need to meet certain criteria based on their export performance over a defined period (usually 3 years).
   • The eligibility is determined based on the value of exports, with different categories of exporters qualifying for different levels of recognition under the scheme.
2. Issuance of Status Holder Certificate: The Status Holder Certificate is being electronically generated based on export data available in DGCI&S database with no requirement by the exporter to file any kind of application in most cases. This will further the ease of doing business by doing away with the application process & file examination and use of existing data elements available within the Government for export certification. In this regard relevant amendments have been made in para 1.08 of the HBP 2023 vide Public Notice No: 32/2023 dtd. 9^th October 2023 read with Trade Notice No. 28/2023-2024 dtd. 9th October 2023.

Table – 1

Relevant text of Public Notice No.: 32/2023 dtd. 09^th October 2023

Para No.	Text of Existing Para (before 09th October 2023)	Text of Revised Para (From 09th October 2023)
1.08  Status Holder: Application for grant of Status Holder Certificate	(a) Exporters shall be required to file an application of status under the Policy in ANF 1B along with prescribed documents. (b) Online Application for status certificate shall be filed with jurisdictional RA as determined by the location of Registered Office in the case of Company and of Head Office in the case of others as per Appendix 1A.	(a) In the interest of trade facilitation, the endeavour has been to recognize and grant system-generated electronic Status Holder Certificate, based on merchandise export data available with DGCI &S with the need for filing any application by the exporter. (b) Whenever required, exporter may also file an application online for recognition as well as for up-gradation of Status under Policy in ANF 1 B along with CA Certificate.  Online Application for Status Certificate shall be filed with regional jurisdictional offices (RA) of DGFT as determined by the location of Registered Office in case of Company and of Head Office in the case of others as per Appendix 1A.

The e-SHC will be made available to the exporting entity in their registered email and the customer dashboard @ DGFT’s portal (https://www.dgft.gov.in/CP/), after necessary IT iterations, by 15^th of August each year. The data set used for the Status categorization will be the merchandise export performance of the preceding 3 financial years or the preceding 2 financial years (in case of gems and jewellery sector) plus the 3-month export data from April to June of the current financial year.

3. Categories of Status Holders: The Status Holder Scheme in the FTP 2023 categorizes exporters into different levels of recognition, known as from One (1) Star Export House to Five (5) Star Export House, based on their export performance.
   • One Star Export House: This is the basic level of recognition.
   • Two Star Export House: For larger exporters with higher export values.
   • Three Star Export House: For top-performing exporters with even higher export values.
   • Four Star Export House: For exporters with exceptional export performance.
   • Five Star Export House: The highest level, awarded to exporters with the best export performance and highest contribution to the country’s exports.

Table - 2

Para 1.26 of the FTP 2023

Status Holder Categories

Status Category	Export Performance Threshold in USD Million
One Star Export House	3
Two Star Export House	15
Three Star Export House	50
Four Star Export House	200
Five Star Export House	800

4. Benefits for Status Holders: Exporters who qualify for the Status Holder Scheme receive several advantages, including:
   • Priority in Government Schemes: Status holders are given priority in availing export incentives and schemes provided by the Government.
   • Relaxation in Export Obligation: Some status holders may receive relaxed export obligations, reducing the pressure to meet specific export targets.
   • Enhanced Brand Image: The status provides exporters with a prestigious recognition, which can enhance their brand value and improve credibility in international markets.
   • Exemption from Licenses: Certain export formalities and license requirements are waived for status holders, making their export procedures smoother and faster.
   • Easy Access to Export Credit: Status holders may receive easier access to export finance and credit facilities from banks.
   • Faster Customs Clearance: Special treatment and quicker customs clearance procedures are available for status holders.
   • Duty Drawback: In some cases, status holders are eligible for a higher rate of duty drawback under certain schemes.
   • Facilitation for Export Incentives: They can also access certain export incentives like RoDTEP (Remission of Duties and Taxes on Export Products) more easily.
5. Fixation of Export Performance Criteria:
   • The export performance criteria for the Status Holder Scheme are set by the Directorate General of Foreign Trade (DGFT). The FTP 2023 defines these criteria to determine eligibility based on the export turnover of the applicant in the preceding 3 years or the preceding 2 financial years (in case of gems and jewellery sector) plus the 3-month export data from April to June of the current financial year.
   • Different categories of status holders will require exporters to meet specific minimum export performance thresholds, such as annual export turnover, which could vary for products such as goods, services, or both.
6. Self-Declaration and Application Process for up-grated Status Holder Certificate:
   • Exporters seeking to obtain up-graded Status Holder recognition must submit an application to the DGFT along with required documentation (e.g., export turnover details, proof of export performance, etc.).
   • In some cases, exporters may need to self-declare their eligibility based on their performance, and the DGFT will verify the declaration before granting the status.
7. Privileges under the Scheme:
   • The recognition as a status holder provides exporters with increased visibility and marketability in international trade.
   • Additional benefits may include facilitation for obtaining export finance, fast-tracking of Government approvals, and exemption from certain documentation requirements.

Important Points to Note:

1. Duration of Status: The status awarded to exporters under the Status Holder Scheme is typically valid for a five-year period. After this period, exporters need to reapply or meet specific criteria again to retain the status.
2. Role of DGFT: The DGFT plays a crucial role in administering and granting the status under this scheme. The DGFT evaluates the applications based on the export performance and ensures that the exporter meets the set criteria.
3. Revised Benefits Under FTP 2023: The FTP 2023 has made efforts to streamline and enhance the benefits for status holders to ensure they can further contribute to India’s export objectives, including easier access to resources, faster approvals, and support for expanding their market presence globally.

Conclusion: The Status Holder Scheme under Foreign Trade Policy 2023 is a vital component for recognizing and incentivizing exporters who contribute significantly to India’s export growth. It not only offers them recognition but also various practical benefits, including easier access to financing, priority in Government schemes, faster customs clearance, and other privileges that can boost their global competitiveness. Exporters who qualify for status under this scheme are seen as reliable, high-performing entities, and are often treated as priority customers by banks, Government departments, and customs authorities, further helping them grow their international business. The Status Holder Scheme thus plays a critical role in motivating exporters to continuously perform better and drive India’s export agenda forward.

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Annexure - 1

Para 1.29 of FTP 2023

Privileges of Status Holders

A Status Holder shall be eligible for privileges as under:

(a) Authorisation and Customs Clearances for both imports and exports may be granted on self-declaration basis;

(b) Input-Output norms may be fixed on priority within 60 days by the Norms Committee; Special scheme in respect of Input Output Norms to be notified by DGFT from time to time, for specified status holder

(c) Exemption from furnishing of Bank Guarantee for Schemes under FTP, unless specified otherwise anywhere in FTP or HBP;

(d) Exemption from compulsory negotiation of documents through banks. Remittance / receipts, however, would be received through banking channels;

(e) Two star and above Export houses shall be permitted to establish Export Warehouses as per Department of Revenue guidelines. (f) The status holders would be entitled to preferential treatment and priority in handling of their consignments by the concerned agencies.

(g) Manufacturers who are also status holders (Three Star/Four Star/Five Star) will be enabled to self-certify their manufactured goods (as per their IEM/IL/LOI) as originating from India with a view to qualify for preferential treatment under different preferential trading agreements (PTA), Free Trade Agreements (FTAs), Comprehensive Economic Cooperation Agreements (CECA) and Comprehensive Economic Partnership Agreements (CEPA). Subsequently, the scheme may be extended to remaining Status Holders. Manufacturer exporters who are also Status Holders shall be eligible to self-certify their goods as originating from India as per Para 2.93 (e) of Hand Book of Procedures.

(h) Status holders shall be entitled to export freely exportable items (excluding Gems and Jewelry, Articles of Gold and precious metals) on free of cost basis for export promotion subject to an annual limit of Rupees One Crore or 2% of average annual export realization during preceding three licensing years, whichever is lower. For export of pharma products by pharmaceutical companies, the annual limit would be 2% of the average annual export realisation during preceding three licensing years.

In case of supplies of pharmaceutical products, vaccines and lifesaving drugs to health programmes of international agencies such as UN, WHO-PAHO and Government health programmes, the annual limit shall be upto 8% of the average annual export realisation during preceding three licensing years.

Such free of cost supplies shall not be entitled to Duty Drawback or any other export incentive under any export promotion scheme.

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Annexure 2

Para 1.27 of FTP 2023

Grant of Double Weightage

 (a) Double Weightage shall be available for grant of One Star Export House Status category only. Such benefit of double weightage shall not be admissible for grant of status recognition of other categories namely Two Star Export House, Three Star Export House, Four Star export House and Five Star Export House.

The exports by IEC holders under the following categories shall be granted double weightage for calculation of export performance for grant of status:

i. Micro and Small Enterprises as defined in Micro, Small & Medium Enterprises Development (MSMED) Act 2006

ii. Manufacturing units having ISO/BIS Certification iii. Units located in North Eastern States including Sikkim, and Union Territories of Jammu, Kashmir and Ladakh iv. Export of fruits and vegetables falling under Chapters 7 and 8 of ITC HS

(b) A merchandise shipment/ service rendered can get double weightage only once in any one of above categories.

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Annexure – 3

Automation in Issuance of Status Holder Certificate (e-SHC)

Relevant Trade Notice and Public Notice as issued by DGFT

Sr. No.	Number & Date	Year	Description	Remarks
1	Public Notice 32/2023 dtd. 09.10.2023	2023-2024	Automatic System based issue of Status Holder Certificate (e-SHC) with no requirement of filling any application by the exporter - reg	Text of Revised Para 1.08 of HBP (W.E.F From 09th October 2023)
2	Trade Notice 28/2023 dtd. 09.10.2023	2023-2024	Automatic System based issue of Status Holder Certificate (e-SHC) with no requirement of filling any application by the exporter - reg	The e-SHC will be made available to the exporting entity in their registered email and the customer dashboard @ DGFTportal(https://www.dgft.gov.in/CP/), after necessary IT iterations, by 15th  of August each year.