New Delhi: The government on Wednesday announced a slew of incentives and new institutional mechanisms as part of the new Foreign Trade Policy to nearly double the country's goods and services exports to $900 billion by 2019-2020.
Unveiling the much-delayed five-year FTP (2015-2020), Commerce Minister Nirmala Sitharaman said that the policy is being aligned with the government's key programmes like 'Make in India' and 'Digital India' to boost manufacturing, job creation and to improve ease of doing business.
The government is also contemplating tariff rationalisation to raise India's share in the global trade from 2 per cent to 3.5 per cent by 2020.
Ms Sitharaman said the FTP, her first trade policy, will incorporate various incentive schemes to introduce Merchandise Exports from India Scheme (MEIS) and Services Exports from India Scheme (SEIS) to boost outward shipments.
"FTP lays down a roadmap for India's global trade engagement in the coming years. India will become a significant participant in world trade by 2020," she said, adding that the sops include reduction of export obligation under the EPCG scheme and extension of all export benefits to units within the special economic zones (SEZs).
The government aims to increase India's exports of merchandise and services from $465.9 billion in 2013-14 to about "$900 billion by 2019-20", Commerce Secretary Rajeev Kher said.
On the most awaited demand of restoring 3 per cent interest subsidy scheme, he that the ministry would soon seek the Cabinet's nod for its implementation.
Budget has allocated Rs 1,625 crore to provide interest subsidy for exports for fiscal year 2015-16.
The policy also proposed setting up of a host of institutions, including Trade Council and National Committee on Trade Facilitation, to improve India's share in global trade and implement of WTO obligations.
Industry chambers welcomed the steps to improve ease of doing business, while exporters body FIEO demanded restoration of the interest subsidy benefits.
"The interest subvention scheme should be announced immediately so that a stable framework is available to the exporters to do their costing for fetching new orders," said S C Ralhan, president of exporters' body FIEO,.
The interest subvention scheme lapsed last April. The new FTP would provide higher level of incentives to export of agriculture products and also seeks to establish an Export Promotion Mission to provide an institutional framework to work with State Governments to boost exports.
"Senior officials have been appointed as designated focal points for exports and imports in several Central Government departments," MR Kher said, adding that unlike the annual reviews of the policy the FTP will be reviewed after two-and-a-half years to ensure continuity in the trade policy.
Among the other incentives, government announced that the duty credit scrips has been made freely transferable and can now be used for payment of customs duty, excise duty and service tax.
To boost services sector, it has replaced the Served from India Scheme to SEIS. Under this, business services, hotel and restaurants would get rewards scrips at the rate of 3 per cent and other specified services at the rate of 5 per cent. Further under MEIS, the policy said the main sectors to be provided support includes processed, packaged agricultural and food items, agricultural and village industry goods.
"These schemes (MEIS and SEIS) replace multiple schemes earlier in place, each with different conditions for eligibility and usage. Benefits from both these schemes will be extended to units located in SEZs," the minister added. To implement the WTO's Trade Facilitation Agreement (TFA), the policy has proposed setting up National Committee on Trade Facilitation. TFA aimed at easing customs procedure to reduce transactions cost for traders."
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