Mid-Term Review of Foreign Trade Policy

iasparliament
December 06, 2017
5 days
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Why in news?

The mid-term review of the five-year Foreign Trade Policy (FTP), which was rolled out in 2015, was released recently.

What are the highlights?

  • Incentives - Incentives under the Merchandise Export from India Scheme (MEIS) have been raised.
  • An increase from 2% to 4% for leather, textiles, agriculture products and carpets has been announced in this regard.
  • Service Exports from India Scheme (SEIS) incentive is raised by 2% with a view to boosting services sector exports.
  • Also, supplies of goods and services to SEZs to be treated as zero rated under GST.
  • Import of second hand goods for repair/refurbishing/re- conditioning/re-engineering is made free.
  • Scrips- Exporters are given duty exemption scrips under the FTP, pegged at a certain percentage of the total value of their exports.
  • The scrips can be used to pay duties on inputs including customs levies and can also be traded in the market.
  • Validity of Duty Credit Scrips has been increased from 18 to 24 months to enhance their utility in the GST framework.
  • The GST for transfer and sale of these scrips has been abolished and brought to zero from 12%.
  • The Centre has also allowed duty free imports for exports against self-certification.
  • Support systems - A professional team will be set up to assist and support exporters in accessing markets, meeting regulatory norms, etc.
  • A team of experts will also be set up to assist exporters on GST.
  • A New Logistics Division to promote integrated development of the logistics sector will be put in place.
  • The round-the-clock customs clearance facility has been extended to more number of sea ports and air cargo complexes.
  • State-of-the-art trade analytics division in DGFT (Directorate General of Foreign Trade) will be set up for data-based policy actions.
  • New Services Division is planned in DGFT to examine Exim policies and procedures to push services exports.
  • Besides, new agricultural exports policy to focus on increasing exports of value-added agri products will be rolled out.
  • Further, to address the capital blockage and liquidity problems of exporters, the government plans an e-wallet from April 1, 2018.

What are the possible benefits?

  • Export is a strategic part of economic policy and thus logically a part of the foreign policy too.
  • FTP review focuses on improving ease of trading across borders for exporters and importers.
  • It also focusses on exploring new markets and products aimed at increasing India's share in the traditional markets and products.
  • This is perhaps to enhance participation of Indian industry in global value chains.
  • Promotion of exports by MSMEs and labour intensive sectors is expected to increase employment opportunities for the youth.
  • The review is aimed at taking corrective steps by assessing the impact of export sops on various sectors.
  • However, the package may not lead to immediate export growth but may contribute to stall the decline in growth of shipments.

 

Source: Economic Times, Business Standard

1 comments
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Balasubramanian Chandrasekar 5 days

Chances of asking in Prelims??

stalin 5 days

read everything you come across.. cant predict

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