India needs a comprehensive foreign trade policy to reverse the pandemic induced economic downturn. Examine (200 Words)
Refer - Business Line
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IAS Parliament 3 years
KEY POINTS
To consolidate this recovery and to realise the ‘Make in India’ dream in the short run and ‘Make for the world’ in the long run, India needs a robust Foreign Trade Policy (FTP).
Issues to be addressed
· India launched Remission of Duties or Taxes on Export Products (RoDTEP) scheme, under which taxes and duties like mandi tax, VAT, coal cess, and excise duty on fuel, will be refunded.
· As it is a difficult task to fix appropriate rates for all product categories, it is important to ensure that the benefits of this scheme is evenly distributed to all important export sectors.
Local manufacturing
· India was not able to attract MNCs moving out of China because the manufacturing sector is beset by many problems.
· Multiple factors such as cost and quality of power, high logistics cost, low labour productivity, have contributed to this poor performance.
· Manufacturing infrastructure also needs to improve significantly, this can be achieved by setting up SEZs for sectors identified under the PLI scheme.
· The FTP should also find ways of increasing people-to-people cooperation and provide technical support.
Do away with protectionism
· The government should gradually phase out of import tariff, especially for strategic partners. US has raised the issue of high tariff several times
· Policymakers must help India attract MNCs, strengthen domestic manufacturers to make India a global export hub.
Dev 3 years
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IAS Parliament 3 years
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