Govt plans short-term foreign trade policy, may release before September 2022
By Fiona Mehta
A new foreign trade policy (FTP) with a shorter period of two to three years may be introduced by the government in an effort to keep up with the rapidly developing scenarios in global trade that have been brought on by recent disruptions like the pandemic and the Russia-Ukraine war.
An FTP is a detailed policy directive and strategy, often lasting five years, to encourage the export of goods and services. An industry representative said that a short-term FTP shall be a good move because the general elections are just two years away.
Exporters currently get support from schemes such as interest equalisation scheme, transport subsidy scheme, RoSCTL, and RoDTEP. The current policy went into effect on April 1, 2015, and prior to several extensions, it was valid for five years. Various export incentive schemes had to be phased out after India faced challenges at the World Trade Organization (WTO) over the same.
A senior government official told Business Standard, “The government has already announced export-boosting schemes like RoSCTL (Rebate of State & Central Taxes and Levies) and RoDTEP (Remissions of Duties and Taxes on Exported Products) A time-to-time review of the policy is crucial and a shorter time frame will help”
Sectors, such as education, aviation, tourism, and hospitality, had to bear the brunt of the Covid pandemic and this makes a case for rolling out stronger incentives.
Hence, in the upcoming FTP, one of the key highlights shall be the ‘Districts as Export Hubs’ scheme. Under the scheme, the focus will be on 50 districts that have products with huge export potential. It will be a centrally sponsored scheme, with the majority contribution by the Centre and the remaining by the states. The FTP could give a great push to e-commerce retail exports because e-commerce trade is growing leaps and bounds.
According to Ajai Sahai, director-general (DG) and chief executive officer (CEO), Federation of Indian Export Organisations (FIEO), “We are not looking for much fiscal benefit; we only want whatever benefit is available to exports, in general. Since most exporters in e-commerce are new players, a chapter in the FTP will help them know benefits and processes in the same place”