Marking a shift in its approach towards foreign trade policy, the government on Wednesday sought to rope in states and Union Territories in the process of international trade while setting an export target of $900 billion by FY20, almost double of $465.9 billion achieved in 2013-14.
In the foreign trade policy (FTP) 2015-2020 announced on Wednesday, the commerce ministry provided for a slew of incentives for exporters and special economic zones while doing away with the existing incentive schemes and introducing two schemes — Merchandise Exports from India Scheme (MEIS) and Services Exports from India Scheme (SEIS) — for goods and services.
While unveiling the policy, commerce minister Nirmala Sitharaman said that it is in line with the initiatives including ‘Make in India’, ‘Digital India’ and ‘Skill India’ announced by the government earlier. The policy, she said, aims at improving doing business environment and simplifying trade transactions in wake of trade facilitation agreement of the World Trade Organization.
The policy comes amid a moderation in global demand and the resultant dip in India’s exports, which fell for the third month in a row in February, declining by over 15 per cent to $21.54 billion. Exports during April-February stood at $286.58 billion compared with $314.40 billion in 2013-14.
For the first time, exports by e-commerce firms will be provided incentives while under the MEIS.
The government will focus on branding India’s products for which campaigns would be started soon in sectors including pharma and engineering. Traditional exports like handloom alongside yoga in services would also be promoted.
“The FTP seeks to provide a stable and sustainable policy environment for foreign trade in merchandise and services… promote diversification of India’s export basket…,” Sitharaman said. The new policy will be reviewed after two-and-a-half years and not annually as was the practice earlier. Further, apart from the existing Board of Trade, a Council for Trade Development and Promotion will be set up comprising representatives from states and Union Territories.
Elaborating on the incentives, commerce secretary Rajeev Kher said that five different schemes — focus product scheme, market-linked focus product scheme, focus market scheme, agri infrastructure incentive scrip and Vishesh Krishi Gram Udyog Yojana — for rewarding merchandise exports with different duty scrips have been merged into the MEIS and there would be no conditionality attached to it.
These duty credit scrips will be freely transferable for payment of custom duty, excise duty and service tax. To boost ‘Make in India’, export obligation has been reduced to 75 per cent from 90 per cent in case of procurement of capital goods from domestic manufacturers.