TaxTMI 
TaxTMI 
MOUs between Govt. and Car Manufacturers
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....ort of components for motor vehicle in ckd/ skd form, which is restricted for import under the current Export-Import Policy, shall be allowed for importation against a licence and such a licence will be issued only to joint venture automobile manufacturing companies on the basis of an MOU to be signed by these companies. Thus, all joint venture manufacturers shall enter in to an MOU with DGFT for Import of CKD/SKD kits/components. 3. The MOU shall be based on the following parameters:- • Establishment of actual production facilities for manufacture of cars and not for mere assembly of imported kits/components. • A minimum foreign equity of US $ 50 Million to be brought in by the foreign partner within the first three years of start of operations, if the Joint Venture involves majority foreign equity ownership. However, this condition will apply to new Joint Venture companies only. • Indigenisation of components upto a minimum level of 50% in the third year or earlier from the date of clearance of first import consignment of CKD/SKD Kits/components and 70% in the 5th year or earlier. Once the MOU signing firm has reached an indigeni....
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....y commercial vehicles, tractors, earthmoving equipments etc, will not be required to enter into any MOU. Their requests for ckd/skd Imports shall be considered by the Special Licensing Committee on merits on an annual basis. 8. A standard format for MOU is enclosed a appendix to this Public Notice and MOU is required to be signed as per this format. 9. This issues in public interest. Sd/- (N.L. Lakhanpal) Director General of Foreign Trade Issued by : Government of India Ministry of Commerce, New Delhi (Issued from File No. IPC/4/5(593)/92-97) MEMORANDUM OF UNDERSTANDING (MOU) I. This MOU has been made on _____________ day of 1997/1998 BETWEEN Government of India acting through the Director General of Foreign Trade (hereinafter referred to as the D.G.F.T.) Udyog Bhawan, New Delhi. AND M/s. ____________________________________________ (hereinafter referred to as the party which expression shall be deemed to include their executors, successors, administrator and assignee). II. Whereas the party has sought issue of an import licence to cover import of CKD/SKD parts for manufacture of cars. III. And whereas the party shall do the following by way....
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....er. Once the party has reached an indigenisation level of 70% there will be no need for further import licence from DGFT. However, the party shall discharge the export obligation corresponding to the imports made by them till that time. That the party intends to achieve the following levels of indigenisation of their product, year-wise: Year Percentage(%) of indigenisation The party shall aggressively pursue and achieve as soon as possible the development of the local supply base and increased local content, since the same will allow a higher level of indigenisation. (v) that the party intends to import the following number of kits with CIF value as indicated in the first five years: Year No. of kits &n....
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....res) Exports (US$in Million) IV. To monitor the progress in respect of the elements stipulated above the party shall submit annual reports to the DGFT on the parameters outlined above and further licences will be issue to the party on the basis of an annual report of the progress made in relation to these parameters. V. The MOU Scheme would be enforced through the import 1icensing mechanism and MOU signing firms would be granted import licences by DGFT based on the progress made in respect of the parameters mentioned at para III above. ( ) &n....