Commerce Minister Suresh Prabhu today said his ministry is looking at certain measures to rev up country's exports in a "shortest possible time" and will also strive to address the issues facing exporters post GST.
Commerce Minister Suresh Prabhu today said his ministry is looking at certain measures to rev up country’s exports in a “shortest possible time” and will also strive to address the issues facing exporters post GST. The minister said exports to GDP (gross domestic product) ratio of India has to improve substantially as the outbound shipments have a great ability to generate economic activity. “Therefore, exports to GDP ratio has to rise…So we are at a crash intervention sort of a thing. We are trying to work out what to be done to promote exports in a shortest possible time which includes issues coming up because of the Goods and Services Tax (GST),” Prabhu, who assumed charge as the commerce and industry minister this week, told reporters here. Prabhu said exporters are facing certain challenges in the GST regime and the ministry is taking up those issues the concerned authorities.
The ministry is working on the support measures “which can facilitate quick increase in exports (both in terms of) volume and value,” he said. The commerce ministry is expected to announce incentives in the review of the foreign trade policy, which is scheduled to be released next month. On the GST, exporters have stated that the new indirect tax regime would block working capital worth over Rs 1.85 lakh crore per year with the government as they now have to pay the tax first and then seek refund, which is a cumbersome process.
Earlier they were getting ab-initio exemptions from taxes. The minister also said that domestic investments by the private sector has not increased considerably and one of the reasons for that is inadequate capacity utilisation. “Unless domestic demand picks up…exports can fill in that gap,” Prabhu added. He said the ministry will work on several other fronts, including bringing in new industrial policy, improving logistics for exporters, agri export policy and integrating into the global supply chains.
The Department of Industrial Policy and Promotion (DIPP) has floated a discussion paper on futuristic industrial policy 2017. “Global supply chains are now become a reality. India is part of that in auto components and generic formulations,” he said adding these chains offer a great opportunity for Indian exports as well as upgrading capacities in terms of technology.
On logistics, he said this is being added in the rules of business of commerce now, so the ministry will work on this also. “We will bring logistics to forefront and work on that as there is a direct link between the competitiveness of exports and logistics,” Prabhu said. To promote investments, the minister has told the ‘Invest India’ team to prepare a district-wise industrial plan as local situations like human resource availability, law and order condition and natural resources help attract investors more.
Further, he said these are challenging times as countries are creating more and more walls around them. “Protectionist ideas are growing. They are stronger over a period time. So we will follow our trade policy in manner that we will be able to work through these walls,” he said. India’s export growth slowed to an eight-month low of 3.94 per cent in July, while the trade deficit widened to $11.44 billion on account of high gold imports.