NEW DELHI: India plans to revamp its foreign trade policy and relook at incentives to to the export sector, which is hurt by lower global demand as well as an appreciating rupee.
The Government proposes to come out with a mid-term review of the Foreign Trade Policy (FTP) 2015-20 in September, Commerce and Industry Minister Nirmala Sitharaman said recently.
The foreign trade policy, announced in 2015, has set an export target of $900 billion, or about
Rs 58 lakh crore, by 2020. In 2016-17, India’s merchandise shipments aggregated at $275 billion, or about Rs 17,70,000 crore. To achieve the FTP target in five years, exports have to grow at 14% every year.
That wouldn’t be easy at a time when the US and some other developed countries are moving towards increased protectionism in trade.
“Between 2014 and today a lot has changed. Exports are happening, but globally trade is in a depressed situation,” Sitharaman said.
“India went through a bad patch and is now recovering.”
Make in India will continue to be a significant factor influencing the policy. Already, the policy provides for higher level of rewards to products with high domestic content and value addition compared to products with high import content and less value addition. The Government is likely to provide special incentives to a smaller list of sectors from among the 25 focus areas for the Make in India programme. Some aspects of the foreign trade policy will be modified to align in with the Goods and Service Tax, which is likely to be rolled out in July this year.