The much-delayed foreign trade policy (FTP), set to be unveiled on April 1, is likely to provide incentives for manufacturing and exporting from India, value addition in exports, while also giving a shot in the arm to the export of services, which comprises over 60 per cent of the country’s GDP, official sources told The Indian Express.
The sources said that the policy, which has been delayed by almost a year, would be incentive-based and reward the high quality, globally-competitive exports besides ensuring that the free trade pacts India has entered into with several countries are fully utilised by the exporters.
“The attempt is to promote competitiveness of Indian exporters while having a holistic vision to address the issues in foreign trade.
Alongside, imports, most of which are intermediaries to manufacturing, also need to be in sync with the government’s broader policy direction including Make in India and Digital India,” the sources added.
The commerce and industry department is likely to thrust on procuring domestically and may give incentives for the same to aid the government’s call for making India a manufacturing hub.
Ajay Sahai, director general, federation of Indian export organization (Fieo), said that given the volatility in Middle East, Russia and the EU, the government should give incentives to exporters to make good for the losses. As such, due to delay in the announcement of the FTP, the exporters have been in a quandary on taking positions on orders, he said.
“Given the volatility in the market, exporters need some incentives to help them beat the slowdown in the currency and world market. If domestic procurement gets a push, it will support Make in India campaign,” Sahai said.
For domestic procurement, provisions under Export Promotion Capital Goods (EPCG), which allows import of capital goods at zero duty subject to an export obligation of six times of duty saved on capital goods imported, may be tweaked to reduce export obligation in case of domestic procurement.
Commerce and industry minister Nirmala Sitharaman had tweeted on Saturday that the FTP 2015-20 will be unveiled on April 1. The FTP provides fiscal and policy incentives to exporters under schemes such as Market Access Initiative, Marketing Development Assistance, Vishesh Krishi and Gram Udyog Yojana, Focus Market Scheme and Focus Product Scheme.
Merchandise exports declined by over 15 per cent to $21.54 billion in February, third month in a row. Exports during the April-February period stood at $286.58 billion compared with $314.40 billion in 2013-14.