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Falling exports: Centre-states meet on Jan 7 to discuss FTAs, worries over taxation

So far, 26 states have appointed export commissioners while around 15 states are working on a trade policy.

Written by Shruti Srivastava | New Delhi |
January 5, 2016 2:24:49 am

Worried over exports continuing to fall for the 12th straight month in November, the centre is meeting states later this week to urge them to resolve issues on taxation front with regards to export including delay in refund of value added tax and sensitise them about the opportunities presented by the free trade agreements that India has signed with various countries to help exporters take benefit.

The Council for Trade Development and Promotion, chaired by Union Commerce and Industry minister and comprising states’ ministers of commerce and central government secretaries, will meet on January 7 to review the trade scenario. This will be the first meeting of the council since it was formed in July 2015. Exports slid 24.43 per cent in November to $20.01 billion, reaching $243.68 billion in the 11 months of 2015 as against $323.2 billion for the entire 2014.

“The Centre wants to involve states in promoting exports. The meeting will specifically look at making states aware about the opportunities available due to free trade agreements that India has entered into. Further, the issue of states charging tax on exports in form of electricity duty and octroi and not rebating these taxes will also be taken up. These add to cost of export. Exporters have also been raising the matter of delay in getting VAT refund. It will also be raised,” an official source told The Indian Express. The official said that the states take a lot of time to process refunds while the infrastructure related to exports also need to be revamped in many states.

“The connectivity like road to port is not so good in many states. We have zeroed in on those states. Also, it would be beneficial for exporters if states start electronic data interchange. This will improve ease of doing business,” the official added. Among other issues, power supply, law and order and overall governance in states will be taken up.

In the Foreign Trade Policy 2015-20 statement, the department of commerce had said states would be urged to play a significant role in promoting exports and rationalising non-essential imports.

Apart from setting up Trade Facilitation Council with representations from states and Union territories to mainstream them in the process of international trade and assist them with their infrastructural needs, the Centre had also said that states would be encouraged to formulate their own state trade policy.

So far, 26 states have appointed export commissioners while around 15 states have attempted formulating a trade policy. During the meeting, all industry bodies including federation of Indian export organisations (Fieo), CII, Ficci and Assocham will also be present along with representatives from NITI Aayog.

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