Govt lays USD 900-billion exports road map in new foreign trade policy

The National Democratic Alliance government unveiled its first five-year Foreign Trade Policy (FTP) on Wednesday aiming to nearly double exports of goods and services to $900 billion by 2020.

Unveiling the policy in the national capital, Commerce and Industry Minister Nirmala Sitharaman said that the FTP (2015-20) will introduce Merchandise Exports from India Scheme (MEIS) and Services Exports from India Scheme (SEIS) to boost outward shipments. The schemes, which will replace multiple schemes earlier in place each with different conditions for eligibility and usage, will also be extended to special economic zones (SEZ).

There would be no conditionality attached to any scrips issued under these schemes. Duty credit scrips issued under MEIS and SEIS and the goods imported against these scrips are fully transferable. For grant of rewards under MEIS, countries have been categorised into three groups whereas the rates of rewards under MEIS range from two to five per cent. Under SEIS, selected services would be rewarded at the rates of three and five per cent.

Incentives have been incorporated to promote procurement of capital goods from indigenous manufacturers under the EPCG scheme by reducing specific export obligation to 75 per cent 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. Sitharaman said that export obligation would be reduced by 25 per cent. Further business services, hotels and restaurants would get rewards scrips under SEIS at the rate of three per cent and other specified services at the rate of five per cent.

The FTP also seeks to establish an Export Promotion Mission to provide an institutional framework to work with states to boost exports. Senior officials have been appointed as designated focal points for exports and imports in several Central government departments.

MAIN FEATURES OF FTP

>> Increase exports to $900 billion by 2019-20 from $ 466 billion in 2013-14

>> Raise India's share in world exports from 2% to 3.5%

>> Merchandise Export from India Scheme (MESI) and Service Exports from India Scheme launched

>> Higher level of rewards under MEIS for export items with high domestic content and value addition

>> Export obligation under EPCG scheme reduced to 75% to promote domestic capital goods manufacturing

>> FTP to be aligned to Make in India, Digital India and Skills India initiatives

>> Duty credit scrips made freely transferable and usable for payment of custom duty, excise duty and service tax