Scripting a survival
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The Ministry of Commerce & Industry is considering postponing the new five-year foreign trade policy by a further six months to April 1, 2022 instead of October 1, 2021 as planned.
“Since schemes like the RoDTEP (Remission of Duties and Taxes on Exported Products) and PLI (Performance Linked Incentive) have just been implemented, the government may want some time to analyse their impact on exports and determine how these could be supplemented,” a source tracking the matter said.
The Ministry has the option of either announcing the policy at once without substantial additional provisions or wait till the new fiscal for insights into what is required and doing the needful, the source added.
The five-year FTP was initially scheduled on April 1, 2020, but it was postponed by a year due to the Covid-19 outbreak till March 31, 2021 and subsequently by another six months till September 30, 2021.
However, in the context of the pandemic, the Commerce Ministry has been responding to the evolving needs of exporters continuously through various policy notifications, another official pointed out. “Policy making has certainly not come to a stop,” he said.
‘Supporting exports’
The Centre recently notified the rates for the RoDTEP scheme for exporters of 8,555 items for refund of input taxes and cess. The scheme replaced the MEIS scheme which was considered non-transparent by the WTO. The PLI scheme, too, is getting implemented across 13 sectors, and is expected to give a push to domestic manufacturing and exports.
Earlier this month, the Finance Ministry approved immediate release of pending dues of exporters under various incentive and duty reimbursement schemes, worth a total of ₹56,027 crore,
“There is a view in the Ministry that at the moment there is nothing significant that could be announced. There are some proposed flexibilities for SEZs and some sops for promoting R&D that are on the cards but these are not bound to the announcement of the FTP and one could easily wait for another six months for it,” the official said.
‘Sustaining exports’
Towards the end of the fiscal one would also be clear whether the high export growth, that is currently being experienced, will sustain.
The Commerce Ministry has fixed an ambitious export target of $400 billion for 2021-22 against $292 billion attained in 2020-21. India’s exports in April-August 2021 increased 67.33 per cent to $164.10 billion compared to the same period the previous year.