The Global Trade Research Initiative (GTRI) stated on Wednesday that the new government’s 100-day plan should include the simplification of e-commerce regulations, disbursement of duty refund scheme in cash and the publication of a report on the effectiveness of India’s trade agreements. GTRI also suggested that the blockchain technology should be used for tracing mechanisms for fruit and vegetable products, allowing special economic zones (SEZ) to sell goods in the domestic market on duty forgone basis and reducing reliance on China for crucial imports including Active Pharmaceutical Ingredients, solar cells, EV batteries and mobile phone components.
Further, it recommended the preparation of an action plan for countering the adverse effects of European climate change regulation, building alliances, strengthening partnerships for better results at the WTO (World Trade Organisation); highlighting how several WTO laws are discriminatory and need change; and standardising incentives in manufacturing schemes. In addition to centralising the submission of all necessary documents and information online, it was stated that a National Trade Network (NTN) would help enable all export-import related compliance online, removing the need for separate interactions with customs, the Directorate General of Foreign Trade (DGFT), shipping companies, ports and banks. “It would intelligently distribute information to the relevant agencies, bound by a service agreement to ensure responses within 2-5 hours, allowing online permissions,” GTRI added.
Ajay Srivastava, founder, GTRI, said, “The first 100 days represent a critical window (for a new government) to set the tone for governance and policy direction.” Advocating for the NTN, Srivastava said that the current systems, focused on specific departments, are slow to evolve and cannot handle comprehensive processes efficiently.
It further stated that India has six smaller trade agreements in addition to 14 larger Free Trade Agreements (FTAs), and the incoming government ought to make public the performance of these accords over time. Additionally, it stated that the incentives for the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme are given out as an e-scrip that can be utilised for imports. To raise money, small businesses must sell items at a discount. “This analysis could offer insights into the FTAs roles in boosting exports and inform ongoing trade negotiations,” GTRI said.
RoDTEP scheme is the refund of un-refunded taxes much like the Drawback scheme and hence like drawback, the incentive must be paid in cash and not scrip, it suggested. “This will improve the liquidity of small firms without any additional revenue outgo to the government. For best results, RoDTEP may be merged with the Drawback scheme and credit the money in one go to the exporter’s bank account,” it added.
On e-commerce, it said that India has more than 20 lakh firms that produce good quality products and services but less than a lakh of these exports. “Simplifying RBI, banking, Customs, GST and DGFT rules related to e-commerce export will help them to start exporting handicrafts, jewellery, ethnic wear, decorative paintings, ayurveda, and many more products,” it said.
On China, Srivastava said that if left unchecked, in the next few years, every third electric vehicle and many passenger and commercial vehicles on Indian roads could be those made by Chinese firms in India alone or through Joint Venture with Indian firms. Further it said that the EU’s Deforestation Regulation, Carbon Border Adjustment Measures, Foreign Subsidies Regulation, and German Supply Chain Due Diligence Act will hurt India’s exports and add uncertainty to exports. “India must draw an aggressive action plan to counter these and prepare to hit the imports from EU in equal measures,” it said.
(with inputs from PTI)