Keeping its focus on the NDA Government's 'Make In India' and 'Digital India' initiatives, the Foreign Trade Policy (FTP) for 2015-2020, which was unveiled on Wednesday, looks to boost exports and promote e-commerce to create jobs. A significant highlight of the policy is that export obligation under the Export Promotion Capital Goods (EPCG) scheme is to be reduced by 25 per cent to promote domestic manufacturing.
At the same time, the Government aims to raise the country's exports to $900 billion by 2020, as the new FTP has also proposed setting up of a host of institutions, including Trade Council and National Committee on Trade Facilitation, to improve India's share in global trade and implement of WTO obligations. Commerce & Industry Minister Nirmala Sitharaman, while speaking on the occasion of the FTP's release, said that it will focus on defence, pharma, environment-friendlyproducts and value-added exports.
Also the Government will promote e-commerce while keeping its focus on employment-creating sectors, she said, while adding that incentives for units located in Special Economic Zones (SEZs) will continue. To improve ease of doing business in the country, online filing of documents and paperless trade has been encouraged under the new FTP. In order to further promote paperless processing of reward schemes, the policy has a provision to allow an online procedure to upload digitally signed documents by Chartered Accountants and Company Secretaries.
Specific export obligation under EPCG scheme, in case capital goods are procured from indigenous manufacturers, which is currently 90 per cent of the normal export obligation, has been reduced to 75 per cent in order to promote domestic capital goods manufacturing industry.
In its endeavour to enhance the country's exports and employment generation, under the new five-year FTP, the Government has introduced two new schemes - Merchandise Exports from India Scheme (MEIS) and Services Exports from India Scheme (SEIS) to promote exports.
Firms that export goods through courier or foreign post office using e-commerce of Freight on Board (FOB) value up to rs25,000 per consignment will be entitled for rewards under MEIS. The objective of MEIS is to offset infra inefficiencies and associated costs involved in export of goods, which are manufactured in India and especially those having high export intensity, employment potential and can enhance India's export competitiveness.
If the value of exports using e-commerce platform is more than rs25,000 per consignment then MEIS reward would be limited to FOB value of rs25,000 only. The goods entitled for benefit under the scheme are handloom, books & periodicals, leather footwear, toys and customised fashion garments. "Export of such goods under courier regulations shall be allowed manually on pilot basis through airports at New Delhi, Mumbai and Chennai...Department of Revenue shall fast track the implementation of EDI mode at courier terminals," the policy said.
SEIS has replaced the earlier Served From India Scheme (SFIS). The new scheme will be applicable to 'service providers located in India', instead of 'Indian service providers'. Therefore SEIS provides for rewards to all service providers of notified services who are providing services from India, regardless of the constitution or profile of the service provider.
Commerce Secretary Rajeev Kher, who was also present on the occasion, said that the FTP will be reviewed after two and a half years. The new FTP has also proposed setting up of a host of institutions, including Trade Council and National Committee on Trade Facilitation, to improve India's share in global trade and implement of WTO obligations.
The country aims at increasing its share in world exports from 2 per cent to 3.5 per cent by 2020. Pursuant to the WTO agreement on trade facilitation, the policy has proposed setting up National Committee on Trade Facilitation. That pact is aimed at easing customs procedure to reduce transactions cost for traders. The policy said several initiatives are under way for the simplification of procedures and digitization of various processes involved in trade transactions. Steps are being taken by various ministries and departments to simplify administrative procedures and reduce transaction costs based on the recommendations of two task forces constituted by the Directorate General of Foreign Trade (DGFT).
The implementation of these recommendations is being actively pursued, the policy said. Kher said that India is committed to implement the WTO's Trade Facilitation Agreement (TFA). A National Committee on Trade Facilitation is being constituted for domestic coordination and implementation of the TFA, he said. In the ongoing Doha Round of trade negotiations, he said, India will continue to work towards fulfilling its objectives and to work with like-minded members to remove any asymmetries in the multilateral trade rules which place a developing country at a disadvantage, such as the rules relating to public stock-holding for food security purposes.