Thursday, February 1, 2018

India - Foreign Trade Policy


Budget 2018: Exports important to drive economic growth, agri-exports could increase to $100 billion
By Ananya Borgohain, ET Online Feb 01, 2018,

In 2017-18 exports clocked  12% growth. In the first 9 months,  $224 billion exports occurred. For the full year,  $300 billion of exports can take place.  Economic Survey 2017-2018 also identifies that exports can provide us extra growth in this year and next.

India Foreign Trade Policy 2015 - 2020

Highlights from the India Foreign Trade Policy 2015 - 2020

Government of India
Ministry of Commerce & Industry
Foreign Trade Policy 2015-2020 Unveiled

Two New Schemes – “Merchandise Exports From India Scheme” And “Services Exports From India Scheme” Introduced

The Foreign Trade Policy 2015-20 was unveiled today by Minister of Commerce & Industry Mrs. Nirmala Sitharaman.

The new five year Foreign Trade Policy, 2015-20 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 of the new policy is to support both the manufacturing and services sectors, with a special emphasis on improving the ‘ease of doing business’.

The FTP Statement describes the market and product strategy and measures required for trade promotion, infrastructure development and overall enhancement of the trade eco system. It seeks to enable India to respond to the challenges of the external environment, keeping in step with a rapidly evolving international trading architecture and make trade a major contributor to the country’s economic growth and development.

FTP2015-20. introduces 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., in place of a plethora of schemes earlier.   Duty credit scrips issued under MEIS and SEIS and the goods imported against these scrips are fully transferable. For grant of rewards under MEIS, the countries have been categorized into 3 Groups, whereas the rates of rewards under MEIS range from 2% to 5%. Under SEIS the selected Services would be rewarded at the rates of 3% and 5%.

Measures have been adopted to nudge procurement of capital goods from indigenous manufacturers under the EPCG scheme by reducing specific export obligation to 75% of the normal export obligation. This will promote the domestic capital goods manufacturing industry.  Such flexibilities will help exporters to develop their productive capacities for both local and global consumption.  Measures have been taken to give a boost to exports of defense and hi-tech items.  At the same time e-Commerce exports of handloom products, books/periodicals, leather footwear, toys and customized fashion garments through courier or foreign post office would also be able to get benefit of MEIS (for values upto 25,000 INR).  These measures would not only capitalize on India's strength in these areas and increase exports but also provide employment.

Exports from SEZs had seen phenomenal growth, significantly higher than the overall export growth of the country.   In order to give a further boost to exports from SEZs, 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.

Trade facilitation and enhancing the ease of doing business are the other major focus areas in this new FTP. One of the major objective of new FTP  is  to move towards paperless working in 24x7 environment.  Recently, the government has reduced the number of mandatory documents required for exports and imports to three, which is comparable with international benchmarks.  Now, a facility has been created to upload documents in exporter/importer profile and the exporters will not be required to submit documents repeatedly.  Attention has also been paid to simplify various ‘Aayat Niryat’ Forms, bringing in clarity in different provisions, removing ambiguities and enhancing electronic governance.

Manufacturers, who are also status holders, will now be enabled to self certify their manufactured goods in phases, as originating from India with a view to qualifying for preferential treatment under various forms of bilateral and regional trade agreements.  This “Approved Exporter System” will help these manufacturer exporters considerably in getting fast access to international markets.

 A number of steps have been taken for encouraging manufacturing and exports under 100% EOU/EHTP/STPI/BTP Schemes.  The steps include a fast track clearance facility for these units, permitting them to share infrastructure facilities, permitting inter unit transfer of goods and services, permitting them to set up warehouses near the port of export and to use duty free equipment for training purposes.

Considering the strategic significance of small and medium scale enterprise in the manufacturing sector and in employment generation, ‘MSME clusters’ 108 have been identified for focused interventions to boost exports. Accordingly, ‘Niryat Bandhu Scheme’ has been galvanized and repositioned to achieve the objectives of ‘Skill India’.  Outreach activities will be organized in a structured way at these clusters with the help of EPCs and other willing “Industry Partners” and “Knowledge Partners”.

Points Made in the Book , National Policy Studies in the light of Ekatma Manav Darshan, Edited by Ravindra Mahajan, Published by Centre for Integral Studies & Research, Pune, 2013

Section 5.11 A Export Orientation

1. The economic activity is all sectors should be benchmarked against the best in the global market.
2. We should also try to take advantage of export opportunities available in the world markets. But becoming an export dependent economy would not be in our interest.

Section 5.21 Stress on International System

In the days ahead, we have to continue to place emphasis on multilateral efforts to establish instruments and norms that will enhance mutually beneficial economic cooperation among countries.

Updated 2018 - 2 January 2018

28 July 2017

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