Next FTP may reduce raw material costs to boost sliding exports
A sluggish global demand is likely to reform the Foreign Trade Policy 2020-25 that might give a boost to Indian exporters with some ease in norms and providing export-rewards to GI products. Focus will also be on E-commerce and services industry.
The Foreign Trade Policy 2020-25 will also offer higher export rewards to products with geographic indication (GI) tag such as Alphonso mango, Banarasi sarees and Moradabadi metal craft with the Make in India scheme being at its core, officials aware of the details said.
The commerce department also proposes to lay special emphasis on services and e-commerce in the upcoming policy that is to come into effect on April 1, 2020.
“In certain cases, there are notional duties that increase the export obligation of the exporters. We are rationalising some schemes to encourage them to do more local sourcing,” said an official.
The department is considering simplifying various export incentive schemes such as Advance Authorisation Scheme, which facilitates duty free import of inputs for export products, Export Promotion Capital Goods (EPCG) that allows exporters to import certain amount of capital goods at zero duty for upgrading technology related with exports, and Service Exports from India Scheme (SEIS) to incentivise exports of various services ranging from legal and accounting to engineering and medical, officials said.
The department is also considering counting total exports of third party as export obligation instead of only proceeds realised from third party by EPCG holders. “The issue will be taken up with the revenue department,” an official said.
Similarly, in the advance authorisation scheme, export obligation period could be enhanced from the current 18 months.
The new policy will also detail the contours of WTO-compliant schemes.