New Foreign Trade Policy To Push Exports to Rs 54 Lakh Crore By 2020
NDA Government has just announced their first ever ‘Foreign Trade Policy’ for 2015-2020. Financial experts have hailed it as one of the redefining policy frameworks ever witnessed as it aims to double the exports from India and breach Rs 54 lakh crore ($900 billion) mark by 2020.
Mrs. Nirmala Sitharaman, Minister of Commerce & Industry said while unveiling this policy in New Delhi yesterday, “FTP (Foreign Trade Policy) 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”
During the fiscal year 2013-14, India exported $465.9 billion (Rs 27,954 crore) worth of goods and services to other countries. If India is able to sustain the growth and push for major reforms, then as per the FTP, India will be able to export Rs 54 lakh crore or $900 billion worth of goods and services by 2020, which will increase India’s share in global trade to 3.5%, from 2% right now.
Besides creating a favorable environment for increasing exports, the new FTP puts major emphasis on ‘Make in India’ and ‘Digital India’ vision, which have been combined to form a new ‘Export Promotion Vision’.
Some major highlights of this new policy:
– Earlier, there were 5 different export related schemes: Focus Product Scheme, Market Linked Focus, Product Scheme, Focus Market Scheme, Agri. Infrastructure Incentive Scrip, VKGUY; which have been now combined into one: Merchandise Export from India Scheme (MEIS). This will greatly assist Indian service providers to manage their services, and participate in Govt. sponsored initiatives
– Served From India Scheme (SFIS) has been replaced with Service Exports from India Scheme (SEIS)
– Both MEIS and SEIS firms and service providers can now get subsidized office spaces in SEZ (Special Economic Zones), along with other benefits
– A new position called ‘Status Holder’ have been formulated, which will recognize and reward those entrepreneurs who have helped India to become a major export player. All IT and ITeS firms, Outsourcing companies and KPOs can rejoice.
– Some major overhauling of nomenclature and naming have been done. For instance, Export House, Star Export House, Trading House, Star Trading House, Premier Trading House certificate has been changed to One, Two, Three, Four, Five Star Export House. The allocation of the status will now be based on US dollars, instead of Indian Rupees
– Tax and duty on Indian manufacturers have been reduced, to boost Make in India vision
– As part of Digital India vision, mobile apps would be created to ease filing of taxes and stamp duty, automatic money transfer using Internet Banking have been proposed
Financial experts have given their verdict for this new FTP, stating it as ‘progressive’, ‘path breaking’ and ‘development friendly’ as exports of books, handicraft, handlooms, toys, textiles, defense and ecommerce platforms would be easier and faster.
Some of the reactions:
SC Ralhan, president of the Federation of Indian Export Organisations (FIEO) said, “The new policy recognizes the global challenges faced by the export sector and also identifies the potential sectors which could emerge as winners in the next five years,”
The Confederation of Indian Industry said in a release, “The much-awaited Foreign Trade Policy 2015-20 seems to be a visionary policy which is in sync with government’s campaigns like Make in India, Digital India and Skills India, which indicates that India is geared up to realize the aim of improving the ease of doing business.”
R Muralidharan, senior director of Deloitte India said, “The foreign trade policy 2015–20 has the desired directional clarity and is an outcome of closer coordination between the Commerce and Finance Ministries. Overall the FTP focuses on exports of both goods and services by encouraging domestic manufacturing and reduction in the transaction costs.”
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