Foreign Trade Policy to be extended till new govt is formed after LS polls

fe Bureau Posted online: Thursday, Mar 13, 2014 at 0000 hrs
Ahmedabad : In order to ensure stability in trade policy, the UPA government has decided to extend the current foreign trade policy that expires on March 31. "The policy will be extended till a new government is formed after the Lok Sabha elections," Rajeev Kher, secretary, Union Ministry of Commerce and Industry said here on Thursday.

"We are currently brazing ourselves to create a new draft," said Kher while talking about the policy that was announced in August 2009 while addressing an export risk management conclave organised by Export Credit Guarantee Corporation of India Ltd (ECGC) and Dun & Bradstreet.

Promoting Indian brands in overseas markets could be one of the areas that the new policy might focus on. "This was started in the earlier trade policy, but it did not take-off. So the new policy has to address this issue," he added.

When asked by participants at the conclave why the government fails to prepare a new policy before the existing one expires, Kher said that "it was natural" for any new government that comes to power to prepare a policy to its own liking.

Kher also said that certain existing schemes like 'Niryat Bandhu' - scheme for mentoring first generation entrepreneurs in international business enterprises - might be continued in the new policy.

The official also stressed the need for exporters to focus on lesser tapped markets like Africa, Latin America, CIS countries, South-East Asian countries, Japan and China. "We need to reorient our perceptions in this context. China and Japan are the markets where new opportunities lie," Kher remarked.

He however told the gathering consisting largely of exporters of that Goods and Services Tax (GST) should have been implemented in the country "in national interest". He also expressed the "need for fundamental changes in policy" to pep up the manufacturing sector in the country where the capacities have been "more or less stagnant."

"No country of India's size can grow if manufacturing does not grow," he said expressing the need to shift from "mass to class-manufacturing".

He also pointed out how textiles and garments from Bangladesh and chemicals from Malaysia and Vietnam were overtaking Indian exporters.

Highlights:

- India’s total exports to world market has increased at a CAGR of 19% during FY03-FY13.

- India’s Exports to Africa increased from US$ 3.1 billion in FY03 to US$ 29.1 billion in FY13 – registering a CAGR of 25%.

- Share of Africa in India’s total exports has increased from 5.9% in FY03 to 9.7% in FY13.

- Commodity wise: Share of agriculture products in total exports to Africa declined from 15.8% in FY03 to just 6.8% in FY10 and increased thereafter to stand at 15.4% in FY13.

- Share of exports of manufactured goods declined from 79.3% in FY03 to 56.5% in FY13.

- While the share of Petroleum & crude products has increased significantly from just 3.0% in FY03 to 26.4% in FY13. (Source: Dun & Bradstreet)