India aims to increase India’s export of merchandise and services from US $ 465 bn. in 2013-14 to approximately US$ 900 bn. by the 2019-20 and to raise India’s share in the world export from 2% to 3.5%. Commerce and Industry Minister Nirmala Sita Raman unveiled foreign trade policy (FTP) 2015 -20, which seek to provide higher incentive to agriculture industry. FTP also seeks to establish an institutional framework to work with state governments to boost India’s exports.
Salient Features of India’s Foreign Trade Policy
• Merchandise Export from India Scheme (ME IS) and Service Exports from India Scheme (SEIS) launched. The 'Services Exports from India Scheme' (SEIS) is for increasing exports of notified services. These schemes (MEIS and SEIS) replace multiple schemes earlier in place, each with different conditions for eligibility and usage. Incentives (MEIS & SEIS) to be available for SEZs also. E-Commerce of handicrafts, handlooms, books etc., eligible for benefits of MEIS.
• Export obligation would be reduced by 25 per cent and incentives available under the MEIS and SEIS would be extend to the units in the SEZs to make them more attractive for investors. SEZs have lost their sheen after imposition of the minimum alternate tax (MAT) and dividend distribution tax (DDT) in 2012.
• Further business services, hotel and restaurants would get rewards scrips under SEIS at the rate of 3 per cent and other specified services at the rate of 5 per cent.
• Nomenclature of Export House, Star Export House, Trading House, Premier Trading House certificate changed to 1, 2, 3, 4, 5 Star Export House.
• 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 scrip’s made freely transferable and usable for payments of custom duty and service tax.
• Export promotion mission to take on board state governments.
• Agriculture and village industry products to be supported across the globe at rates of 3% and 5% under MEIS.
• Industrial products to be supported in major markets at rates ranging from 2% to 3%.
• Under the new five year trade policy, the government will provide incentives to e- commerce companies exporting products from sectors that create jobs.
• Firms that export goods through courier or foreign post office using e-commerce of FOB (Freight on Board) value up to Rs. 25,000 per consignment will be entitled for rewards under MEIS.
• Specific measures will be taken to facilitate the entry of new entrepreneurs and manufacturers in global trade through extensive training programmes.
• "The Niryat Bandhu" scheme will be revamped to achieve these objectives and also further dove-tailed with the ongoing outreach programmes.
• A new institution - Centre for Research in International Trade - is being established not only to strengthen India's research capabilities in the area of international trade, but also to enable developing countries to articulate their views and concerns from a well-informed position of strength.
• Two institutional mechanisms are being put in place for regular communication with stake holders- the board of trade and council for trade development (CTD) and promotion. While the board of trade will have an advisory role, the CTD would have representation from states and UT governments.