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The Foreign Trade Policy to be announced on Friday amid a slump in global demand and sustained contraction in export of goods, will likely give thrust to more coordinated government support to boost exports, and refrain from rolling out any new incentive schemes.
While tax remission for exported goods will be an inalienable right of exporters, the new policy could feature several facilitation programmes to make it easier for firms to export. Relaxation of procedures and paperwork, especially in seeking permits and licence renewals, removal of human interface and bolstering of automation on various aspects of trade are on the cards. The annual export target of $2 trillion (both goods and services) by 2030 will be reiterated (exports of goods and services have crossed $750 billion mark in the current fiscal, as services exports remained buoyant despite the setbacks in merchandise shipments).
There is also a possibility of the new FTP being valid for a period less than the e usual five years to ensure agility of policy in the fast-changing global market matrix which has led to a major rejig in India’s export destinations in the last few years. The validity of the current FTP, initially designed to cover the period between 2015 and 2020, has been extended up to March 2023 in the wake of the outbreak of the pandemic.
Commerce and industry minister Piyush Goyal has repeatedly called upon exporters to shun the “crutches of subsidies” and improve competitiveness. Earlier, FTPs used to pledge more fiscal support to exporters, via schemes like Merchandise Export from India Scheme (MEIS) announced in 2015. However, such incentives run foul of the multilateral trade rules under the World Trade Organisation and have been done away with.
The MEIS was replaced with the Remission of Duties and Taxes on Exported Products (RoDTEP) programme from January 2021.
OPTI reported, quoiting unnamed sources that the new policy is likely to incorporate “WTO-compliant export promotion measures.” Speaking at an event in Mumbai, Goyal said that amidst all the economic challenges faced by many countries, India is the bright spot. FE
