Recently, India announced its plan to revamp its foreign trade policy and relook at incentives to give a leg up to the export sector, which is hurt by lower global demand as well as an appreciating rupee. We have already read articles on the impact of GST on India’s industrial sectors
The government proposes to come out with a mid-term review of the Foreign Trade Policy (FTP) 2015-20 in September, as per the commerce and industry minister Nirmala Sitharaman
The foreign trade policy, announced in 2015, has set an export target of $900 Bn, or about Rs 58 lakh crore, by 2020. In 2016-17, India’s merchandise shipments aggregated at $275 billion, or about Rs 17,70,000 Cr.
To achieve the FTP target in five years, exports have to grow at 14% every year.
That wouldn’t be easy at a time when the US and some other developed countries are moving towards increased protectionism in trade.
FTP 2015-20 had introduced two new schemes: Merchandise Exports from India Scheme (MEIS) and Services Exports from India Scheme (SEIS).
These schemes replaced multiple schemes, each with different conditions for eligibility and usage. Incentives under these schemes have been made available for SEZs as well. Ecommerce of handicrafts, handlooms and books among others are eligible for the benefits.
Some key features of the Foreign Trade Policy :
India to be made a significant participant in world trade by 2020
Merchandize exports from India (MEIS) to promote specific services for specific Markets Foreign Trade Policy
The policy would reduce export obligations by 25% and give boost to domestic manufacturing
Benefits from both MEIS & SEIS will be extended to units located in SEZs
FTP 2015-20 introduces two new schemes, namely “Merchandise Exports from India Scheme (MEIS)” and “Services Exports from India Scheme (SEIS)”. 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.
Industrial products will get a boost in major markets at rates ranging from 2% to 3%.
Service Export from India Scheme (SEIS) will replace Served From India Scheme (SFIS)
Traditional Sectors will have branding campaigns
SEIS shall apply to ‘Service Providers located in India’ instead of ‘Indian Service Providers’.
Business services, hotel and restaurants to get rewards scrips under SEIS at 3% and other specified services at 5%.
Duty credit scrips to be freely transferable and usable for payment of customs duty, excise duty and service tax.
Debits against scrips would be eligible for CENVAT credit or drawback also.
Nomenclature of Export House, Star Export House, Trading House, Premier Trading House certificate changed to 1,2,3,4,5 Star Export House
The criteria for export performance for recognition of status holder is now from Rupees to US dollar earnings.
Manufacturers who are also status holders will have to self-certify their manufactured goods as originating from India.
Reduced Export Obligation (EO) (75%) for domestic procurement under EPCG scheme.
Online procedure to upload documents with digital signature by Chartered Accountant/Company Secretary/Cost Accountant will exist
Inter-ministerial consultations can be online for issue of various licences.
No need to repeatedly submit physical copies of documents available on Exporter Importer Profile.
Validity period of SCOMET export authorisation extended from present 12 months to 24 months.
Export obligation period for export items related to defence, military store, aerospace and nuclear energy to be 24 months instead of 18 months
Calicut Airport, Kerala and Arakonam ICDS, Tamil Nadu notified as registered ports for import and export.
Vishakhapatnam and Bhimavarm added as Towns of Export Excellence.
Certificate from independent chartered engineer for redemption of EPCG authorisation no longer required.
India is presently one of the most important players in the global economic landscape. Its trade policies, government reforms and inherent economic strengths have attributed to its standing as one of the most sought after destinations for foreign investments in the world. Also, technological and infrastructural developments will boost the trade and economic sector in the years to come.
As per the Indian Brand Equity Foundation, boosted by the forthcoming FTP, India’s exports are expected reach US$ 750 billion by 2018-2019 according to Federation of India Export Organisation (FIEO).Add to favorites