A five-year Foreign Trade Policy was unveiled in April 2015, with an ambitious aim of raising India’s exports to $900 billion by 2020 as part of Prime Minister Narendra Modi’s ‘Make in India’ plan, whose delayed mid-term review is scheduled for release today. The mid-review was expected to release with the implementation of the Goods and Services Tax (GST) on July 1, however, the government put it on hold to get feedback from exporters on the GST. Exporters’ woes under the GST regime is expected to dominate the mid-term review of the Foreign Trade Policy.
Here’s all you need to know about the Foreign Trade Policy mid-term review:
1. The FTP set an ambitious target of India’s goods and services exports touching $900 billion by 2020. It also aimed at increasing India’s share of world exports to 3.5% from 2%.
2. Key policymakers led by Commerce Minister Suresh Prabhu will unveil the mid-term review of the foreign trade policy, which is likely to address exporters’ concerns to arrest the declining trend of shipments and the impact of the GST.
3. The government is likely to address exporters’ woes arising from the switch to the GST, mainly their demand to expedite the process of refund, delay in which is creating the liquidity problem for them.
4. Exports entered the negative terrain after over a year, contracting 1.12% in October, primarily due to liquidity problem being faced by exporters.
5. The review is also likely to address the incentive schemes for exporters which was struck down by the WTO as India’s per capita Gross National Product (GNP) exceeded $1000 for three years in a row in 2013, 2014, and 2015.
According to the government, the FTP for 2015-2020 seeks to provide a stable and sustainable policy environment for foreign trade in merchandise and services; link rules, procedures and incentives for exports and imports with other initiatives such as Make in India, Digital India and Skills India to create an Export Promotion Mission. It also aims to provide a mechanism for regular appraisal in order to rationalise imports and reduce the trade imbalance.