The five year foreign trade policy (2014-15) to be announced by the last week of this month, will focus on incentives to boost exports, manufacturing value added diversified products and increasing shipments to other nations.
“It is expected that the new FTP would be announced by August-end,” sources close to the development told The Pioneer. The Commerce Ministry had also asked the Finance Ministry to do away with the Minimum Alternate Tax (MAT) of 18.5 per cent and Dividend Distribution Tax (DDT) of 15 per cent imposed on SEZs by the UPA Government in 2011-12.
“We keep discussing SEZs issues with the finance ministry but this time we are hopeful that we will turn into action in the FTP as Finance Minister in his Budget speech has already talked about the revival of SEzs,” sources added. The SEZ Act promises units a five-year tax holiday on profits, while developers are promised a tax holiday for 10 consecutive years.
Industry is time and again demanding roll back of MAT and DDT, saying imposition of the duty has adversely impacted the growth of these zones. The new policy would focus on wide range of issues including services exports, standards and branding of products. India’s exports in the last three years have been hovering around $ 300 billion and now there is a need to boost it further and enhance its contribution in the world trade.
The Government of India, Ministry of Commerce and Industry announced New Foreign Trade Policy on 27th August 2009 for the period 2009-2014, earlier this policy known as Export Import (Exim) Policy. After five years foreign trade policy needs amendments in general, aims at developing export potential, improving export performance, encouraging foreign trade and creating favorable balance of payments position.
The Export Import Policy (EXIM Policy) or Foreign Trade Policy is updated every year on the 31st of March and the modifications, improvements and new schemes becomes effective from April month of each year.