After the Budget, the government is gearing up to announce a completely overhauled Foreign Trade Policy (FTP) by the end of this month.
The FTP, which aims to step up the country’s exports, will have a strong imprint of Prime Minister Narendra Modi’s ‘Make in India’ initiative with a thrust on the manufacturing sector.
The Union Budget 2015-16 has already given a glimpse of how the government plans to arrest the declining buoyancy in the country’s exports.
According to sources, the FTP will not lay much emphasis on subsidies and incentives to exporters, but will make it easier for them to do business. Sources, however, did not rule out some concessions to exporters to promote research and development (R&D).
“It will completely eliminate government-exporter interface by digitising the process of approvals for exports. At present, an exporter has to take clearance from 9 to 13 places, including customs, Directorate General of Foreign Trade, forests, environment and so on,” sources told Deccan Herald.
The government is also planning to do away with the post-export incentives.
“Post-export incentives were aimed at helping exporters after the global economic downturn. However, these have not served any goal. Besides, the government feels export promotion through incentives is not WTO-complaint,” the sources said.
“The new policy is expected to announce measures for exporters under the Make in India initiative and it will add a full section on services exports and free trade agreements,” they said.
Declining export buoyancy has made it imperative for the government to come out with new policy measures to rev up outbound shipments. Overseas exports have contracted by 11.19 per cent year-on-year in January. However, services exports have performed better.
The FTP 2014-19 expired in July last year. However, the government did not announce a new FTP. It, instead, extended the old one till March 31.
Sources said that the Commerce Ministry is ready with the FTP draft but it got stuck a number of times because of the Finance Ministry’s reluctance to give funds. The latter was struggling to rein in fiscal deficit at 4.1 per cent of GDP.
However, the revenue collected through spectrum sale this year is expected to help the government meet its fiscal deficit comfortably.
“We are expecting the Finance Ministry to provide funds for some much needed export incentives,” sources said.
