Centre to announce mid-term review of Foreign Trade Policy on Dec. 5

Posted by Daily Shipping Times on 04-12-2017        Tweet

NEW DELHI: The Centre is set to announce on December 5 its mid-term review of the Foreign Trade Policy (FTP), with the focus expected to be on policy measures to boost the exports of goods and services and to increase employment generation and value-addition in the Country.

Specifically, the spotlight of the review is likely to be on Small and Medium Enterprises (SME) and labour-intensive segments, according to official sources.

Export contraction

The move comes at a time when latest trade data show that goods exports shrank by 1.12% in October to $23 billion, the weakest performance since the 6.86% contraction in July 2016, the last time shipments contracted.

The contraction in October has been linked by trade officials to the impact of the Goods and Services Tax (GST) on exporters.

G.K. Gupta, President, Federation of Indian Export Organisations, had said in a statement that “the fall was expected as exporters, particularly SMEs, were facing liquidity problem to pay GST for four months in a row without getting any refund.”

He added that exports should be kept out of the purview of GST as paying the tax first and getting refund later was cumbersome, in turn, affecting exports.

The FTP for the period 2015-2020 had set a target for India’s exports of goods and services to touch $900 billion by 2019-20 and that of raising India’s share in world exports from 2% to 3.5%. Though the mid-term review was to be released prior to July 1, in line with the introduction of GST, it was postponed as the Government wanted to take into account the exporters’ feedback regarding GST.

The Directorate General of Foreign Trade (DGFT), which is responsible for FTP implementation, said in a November 29 office order that the DGFT headquarters in New Delhi will remain functional on December 2 and 3, 2017, (Saturday and Sunday) for preparatory work relating to release of FTP mid-term review. All the officers/officials of DGFT Headquarters are directed to attend office on the above mentioned days. No leave of any kind shall be allowed till the release of FTP on December 5, 2017.”

Earlier this month, Commerce Minister Suresh Prabhu had said the FTP review would be released soon.

“One great strategy we have is to bring economic development, take our manufacturing to at least 20% of the GDP... In the next few years time we will have $5 trillion of GDP, so $1 trillion of that will come from manufacturing and the substantial part of that, we are aiming to get from SMEs,” Mr. Prabhu said at a conference of SMEs. The Centre aimed to help SMEs become a part of global supply chains by identifying opportunities.