India's exports have been increasing despite global headwinds and efforts are being made to neutralise any impact on them due to implementation of GST, Commerce and Industry Minister Nirmala Sitharaman said.
India’s exports have been increasing despite global headwinds and efforts are being made to neutralise any impact on them due to implementation of GST, Commerce and Industry Minister Nirmala Sitharaman said. She also said that the government will come out with amendments to the foreign trade policy to align it with the Goods and Services Tax (GST), which is scheduled to be rolled out from July 1.
Since September last year, exports are consistently going up and “I can see this as a clear indicator that our exporters are performing against all odds and showing their capacity to withstand any headwinds and the global situation,” she told PTI in an interview.
“I do not think that global situation has improved drastically. Even if there are green shoots that people are seeing and saying that there are prospects that world trade might improve, it is yet to be significantly felt by others,” she added.
The minister said even in this type of environment, domestic exporters are doing good. She also expressed hope that the country would achieve the the 900 billion target of exports for goods and services by 2020.
Talking about the ongoing review of the foreign trade policy (FTP), Sitharaman said the ministry is covering all aspects in this review, which was commenced in January.
“We shall not wait till September. It should happen parallely (with GST) so that exports do not suffer on account of any doubts which have not been explained,” she said.
Over concerns being expressed by exporters body Federation of Indian Export Organisations (FIEO) on impact of GST on exports, the minister said she has asked the commerce secretary and the duty drawback committee in the finance ministry to represent the case of exporters to the GST Council. “We are trying to see how best other alternatives of dealing with revenue concerns as regards to exports can be handled without making it cumbersome for exporters,” she said.
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As there is no provision of ab-initio exemption in the GST, exporters would have to pay the duties and then seek the refund.
Exporters have raised certain concerns over refund of duties and according to FIEO, a certain portion of working capital would be blocked in the process with the government for about three months.
The five-year FTP (2015-20) provides a framework for boosting exports of goods and services besides creation of employment and increasing value addition. In 2016-17, while India’s merchandise shipments aggregated at $275 billion, services exports grew by 3.4 per cent to $160.68 billion.