India unveils new Foreign Trade Policy, focus on boosting exports

With a strategic mission to be a key player in global trade, India has unveiled a five-year Foreign Trade Policy (FTP), in which it aims to double its exports of goods and services from $465.9 billion in 2013-14 to $900 billion by 2020, and the share of exports from the current 2 percent to 3.5 percent by the same deadline.

Stressing on the need to boost exports in infrastructure and manufacturing segments, India’s Commerce and Industry Minister Nirmala Sitharaman announced two new schemes – “Merchandise Exports from India Scheme” (MEIS) and “Service Exports from India Scheme” (SEIS).

These schemes will replace the earlier multiple ones giving the same benefit; now each one will come with different condition, eligibility and usage. The benefits of the new scheme will also be extended to the companies located in the Special Economic Zones (SEZ). India’s current share in merchandise exports is over $300 billion, while service industry contributes around $145 billion, nearly half of the share of merchandise. Speaking on the future of India’s share in the global trade, Mrs Sitaraman said: “India aims to be a significant participant in the global trade by 2020.”

“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.” “The new trade policy will boost exports and create jobs while supporting Make in India and Digital India,” she added.

Describing the new FTP policy as “path-breaking,” she announced that the policy delayed by a year is now focusing to promote defence, pharma, environment friendly products and value added products. The new policy sees the global challenges faced by exports, and figures out the potential sector which could emerge as winners over the next five years. She also added that the 5-year policy will be reviewed after two-an-half years.

The new FTP has earned praise from Indian business community. With so many reforms and implementation of new rules under “Make in India” campaign, India is aiming at making its presence felt all over the world.

“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,” said the Confederation of Indian Industry, India’s premier business body.

The other major focus of the FTP is trade facilitation and enhancing the ease of doing business in India. Attention has been given to the simplification of export-import rule, reducing documents for exports and imports, bringing in clarity in different provision, removing ambiguity and enhancing electronic governance.

A number of steps have been taken for encouraging export under 100% EOU/EHTP/STPI/BTP Schemes. It includes a fast track clearance facility permitting one to run through the documentation and transfer of goods hassle-free. The export-obligation duration for items such as defence, military stores and nuclear energy has been extended to 24 months from the earlier 18 months.

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