New Delhi: The government on Wednesday announced its much delayed Foreign Trade Policy (FTP) 2015-2020 seeking to nearly double India’s exports (services and merchandise) to $900 billion by 2019-20 from $466 billion in 2013-14.
It seeks to raise India’s share in world exports from two per cent to 3.5 per cent by 2020.
FTP points about the challenges emerging from mega free trade agreements — Trans-Pacific Partnership and Trans-Atlantic Trade and Investment Partnership — by “eroding existing preference for Indian products in traditional markets of US and European Union”.
It talks about bringing tariff regime closer in line with global norms to prepare for new regional trade pacts being negotiated by advanced economies.
While India is not part of mega free trade pacts, it is participating in the Regional Comprehensive Economic Partnership (RCEP) agreement.
“We have been a little bold in this policy by accepting — some of you may not like it — that it is important for us to optimise our tariff structure.... That is where the challenge is, many of us operate at intermediate levels and therefore feel threaten from lowering of tariffs. But if the country has to stand up to these agreements, it is important for us we start addressing this issue,” said commerce secretary Rajeev Kher.
FTP warns that agreement on WTO envisages the eventual phasing out of the export subsidies and pointed out that in case of India, some sectors may be affected.
It says in future, export promotion efforts should move towards more fundamentals measures rather “than incentives and subsidies alone”.
“We want to make India a significant player by 2020. The new FTP provides a framework for increasing exports of goods and services; as well as generation of employment and increasing value addition in the country, in keeping with the ‘Make-In-India’ vision,” said commerce and industry minister Nirmala Sitharaman.
She said focus of the new policy is to support both the manufacturing and services sectors, with a special emphasis on improving the ‘ease of doing business’.
FTP 2015-20 introduces two new schemes, “Merchandise Exports from India Scheme (MEIS)” for export of specified goods to specified markets and “Services Exports from India Scheme (SEIS)” for increasing exports of notified services. There were a number of schemes for merchandise exports including, Focus Product Scheme, Market Linked Focus Products Scheme and Focus Market Scheme among others, which have been replaced by one scheme: MEIS.
