FOREIGN TRADE POLICY - ECONOMY
News:
Foreign Trade Policy may be finally revised after eight years from April 1
What's in the news?
● The
Commerce Secretary Sunil Barthwal said that the much-delayed reboot of India’s
Foreign Trade Policy, which has been unchanged since 2015 and whose revision
has been due for three years, may finally be announced by the end of this
month.
Key takeaways:
● Last
September, the Commerce Ministry had
planned to announce a new trade policy but abandoned those plans and extended
the ‘Foreign Trade Policy 2015-20’ by six more months till March 31.
Foreign Trade Policy:
● Foreign
Trade Policy is a set of guidelines and instructions established by the DGFT (Director General of Foreign Trade)
in matters related to the import and export of goods in India.
● The
foreign trade policy is regulated by foreign trade (development and
regulation), Act 1992.
Foreign Trade Policy 2015-2020:
Focus area:
● FTP
primarily focuses on adopting a twin strategy of promoting traditional and
sunrise sectors of exports including services.
● Trade
facilitation and enhancing the ease of doing business were the other major
focus areas in the FTP.
Objectives:
● To
boost the economy by facilitating
international trade of India.
● To
move towards paperless working in a 24×7
environment.
● To
improve the balance of payment and
trade of India.
● To
enhance the trading activities and generate a workforce environment to increase
employment in the country.
● To
provide consumers with goods and services of utmost quality and with effective
cost.
● To
raise the infrastructure of small-scale
industries to reduce the trade imbalance in the country.
● To
establish an advance licensing system
to allow duty-free imports.
● To
remove the restrictions on goods and services, and allow them to be freely
imported.
● Digitalization
of all the documents to reduce conflict between exporters and DGFT.
● Ease of access to credits
by the start-ups and increasing limits.
● Canalization
of import goods to diversify market opportunities.
● It
also aims to promote and diversify
services exports beyond the US and EU markets.
Features:
1. MEIS and SEIS:
● It
introduced a new scheme, “Merchandise Exports from India Scheme (MEIS)” and
“Services exports from India scheme (SEIS)”.
○ Merchandise exports from
India (MEIS) to promote specific services for
specific FTP. It provides rewards to exporters to offset infrastructural
inefficiencies and associated costs.
○ The
‘Services Exports from India Scheme’
(SEIS) is for increasing exports of notified services. Under SEIS the selected
Services would be rewarded at the rates of 3% and 5%.
2.
Measures had been adopted to nudge procurement of capital goods from indigenous
manufacturers under the EPCG scheme
by reducing specific export obligation to 75 percent of the normal export obligation.
3.
Duty credit scrips are freely
transferable and usable for payment of customs duty, excise duty and service
tax.
4.
Measures had been taken to give a boost to exports
of defence and hi-tech items.
5. 108 MSME clusters have been identified
for focused interventions to boost exports. Accordingly, ‘NiryatBandhu Scheme’ had been galvanised and repositioned to
achieve the objectives of ‘Skill India’.
6.
E-commerce export is applicable to
items of worth upto Rs 25,000 per consignment.
7.
Provision for Export oriented units
(EOUs), Export hardware technology park and software technology park.
8.
The policy outlines extended incentives for Special Economic Zones in India.
9.
In an effort to resolve quality complaints and trade disputes between exporters
and importers, a new chapter on Quality
Complaints and Trade Disputes has been incorporated into the Foreign Trade
Policy.
10.
Export promotion mission to take on
board state governments.
11.
Agriculture and village industry
products to be supported across the globe at rates of 3% and 5% under MEIS.