Inputs from Oct 6 meeting to be used for mid-term review of trade policy
The export sector’s woes finally seem to have nudged the Centre into action. On Friday, when the GST Council meets to iron out the sector’s problems, three key Union ministers will hold a brainstorming session with officials, exporters and industry bodies to identify measures to lift exports on to a higher growth trajectory.
Commerce and Industry Minister Suresh Prabhu, Textiles Minister Smriti Irani and Chemicals & Fertilisers Minister Ananth Kumar will hold talks with representatives from key ministries and departments, including Finance, Heavy Industry and MSME, as well as exporters’ and industry bodies, a government official told BusinessLine.
“The inputs from the session will also be used to frame the mid-term review of the Foreign Trade Policy (FTP), which is already delayed. The focus will be on how India can go for a quantum jump in exports,” the official said.
Exports have fallen woefully short of the FTP targets announced in April 2015, which projected annual exports of $900 billion by 2020. However, exports have hovered around $300 billion in the last two years.
Liquidity challenges after the GST regime kicked in and the rupee’s volatility have made the going tougher for exporters.
“The Commerce Ministry realises it is time for a course correction in order to move exports to a higher growth trajectory. Not only will steps need to be taken to address the immediate problems, effective schemes have to be devised to increase their competitiveness,” the official said.
With the World Trade Organization declaring earlier this year that India’s per capita Gross National Product (GNP) had exceeded $1,000 for three years in a row (2013, 2012, 2015), the country will now be ineligible for export incentives that only poorer countries are allowed.
“The Ministry will have to look at new options together with affected ministries, such as Textiles, in order to ensure that action is not taken against Indian exports by other WTO member countries,” the official said.
Meanwhile, the GST Council is expected to consider some of the requests made by the export sector, which includes exemption from Integrated GST (IGST) on imports of inputs used in exports (under schemes such as Export Promotion Capital Goods and Advance Authorisation); exemption from GST for merchant exporters and wider usage of duty exemption scrips (earned under incentive schemes such as Merchandise Export from India Scheme).
“In the meeting with the Centre on increasing exports, we will highlight problems of the export sector, give possible solutions and suggest a strategy to increase exports,” said Ajay Sahai, Director General, Federation of Indian Export Organisations (FIEO).