Against the backdrop of a difficult global trade environment, India’s Commerce Minister Nirmala Sitharaman on Wednesday unveiled the much-awaited Foreign Trade Policy 2015-20 with an aim to double exports to $900 billion by 2019-20 while giving a boost to the Make in India initiative.
The new simplified five-year policy provides a framework for increasing exports of goods and services as well as generation of employment and increasing value addition in the country, in keeping with the “Make in India” vision of Prime Minister.
The focus is on supporting both the manufacturing and services sectors, with a special emphasis on trade facilitation and improving the ‘ease of doing business’.
The Commerce Minister said that there are various forces shaping India and its equation with the rest of the world. She urged the government and industry to work in tandem to deal with the challenges posed.
In keeping with global trading norms under the World Trade Organization (WTO), the new FTP seeks to consolidate all previous export incentive schemes under two new schemes, namely “Merchandise Exports from India Scheme (MEIS)” for export of specified goods to specified markets and “Services Exports from India Scheme (SEIS)” for increasing exports of notified services.
Measures have been adopted to nudge procurement of capital goods from indigenous manufacturers under the EPCG scheme by reducing specific export obligation to 75 percent of the normal export obligation. There are also measures to give a boost to exports of defense and hi-tech items.
In order to give a boost to exports from special economic zones (SEZs), the government has now decided to extend benefits of both the reward schemes (MEIS and SEIS) to units located in SEZs. It is hoped that this measure will give a new impetus to development and growth of SEZs in the country.
The Confederation of Indian Industry (CII) said the Indian industry was thrilled with announcements pertaining to simplification in procedures. “The policy is inclusive, having spoken about job creation, agriculture, and even mobilizing waste for exports. It’s the first time a trade policy has included subjects like the ease of doing business, transaction simplification, speed of approvals etc. so it’s a positive,” said Ajay Shriram, President, Confederation of Indian Industry (CII).
Federation of Indian Export Organizations (FIEO) hailed the FTP as a path-breaking policy and said that concerted and partnership-based efforts of government and business would certainly be able to raise India’s share in world exports from the present level of 2 percent to 3.5 percent by 2019-20.
Rana Kapoor, President, Assocham, said the boost to e-commerce and services exports is well-timed and takes into account the shift in the business paradigm.