Industries, exporters hail mid-term review of foreign trade policy

Amid the reports of exporters encouraging the move of an increase of Rs 8,450 crore in incentives at the foreign […]

   

Amid the reports of exporters encouraging the move of an increase of Rs 8,450 crore in incentives at the foreign trade policy review in New Delhi on Tuesday, the textile and agri industry on Wednesday said the mid-term review would help boost exports in the labour-intensive sector. “The mid-term review of FTP is progressive, growth-oriented and I am glad the government has recognized the urgent need to address the challenges being faced by the exporters on account of the GST roll-out by focusing on reducing procedural burden,” the Cotton Textiles Export Promotion Council (Texprocil) chairman Ujwal Lahoti said. The revised FTP has increased MEIS rates across the board by two per cent for labour intensive sectors. Earlier the MEIS rates for garments and made-ups were increased from two per cent to four per cent. The enhanced MEIS rates will provide the much needed relief to exporters and will certainly have a positive impact on the overall exports especially of textile products, Lahoti said. He also said the increase in the validity of duty credit scrips issued under the MEIS from 18 months to 24 months will increase the utility of such scrips. With regard to export strategy, the Texprocil chairman said it is reassuring that the revised FTP identifies markets in Africa and Latin America to be its new focus areas as part of the government’s goal of exploring new markets. The textiles sector especially technical textiles will benefit immensely from this scheme. Also, it allows domestic procurements which will promote “Make in India,” initiative, Lahoti added. Lahoti pointed out that cotton yarn continue to be denied any benefit under the FTP. Ruchi Soya Industries managing director and CEO Dinesh Shahra said, “The increase of Rs 1,354 crore in the incentives for agriculture and related products will given an additional boost to agri industries, which will in turn benefit all stakeholders including the farmers.” It is heartening to see agro-processing as a focus area in the government’s drive to increase exports to new and un-tapped markets, and this is a big positive for the industry. We also look forward to the new agricultural exports policy to give a long-term direction to the industry through a stable policy regime, Shahra said. Meanwhile, engineering exporters’ body EEPC India said that the RBI needs to help exporters by reducing the cost of borrowing. “The RBI could have joined the government in helping the exporters by reducing the cost of borrowing,” EEPC India chairman T S Bhasin said. The RBI policy review has taken place a day after the commerce ministry has come out with a pragmatic review of the Foreign Trade Policy. As exports are picking up due to demand pick up in some of the key markets, the domestic exporters must be strengthened to face the increasing competition from countries like China where the cost of capital is significantly lower than India, Bhasin said. Moreover, exporters welcomed the move but demanded more measures to improve market access and cost competitiveness. “Exporters are pleased to find that the cutting cost and time of transactions form key priorities of the government with steps like better trade facilitation, including easing of customs procedures, but we would urge the finance ministry to ensure that the tax refunds are done at the earliest so that the tempo in export growth is maintained,” Engineering Export Promotion Council of India Chairman T S Bhasin said. “The mid-term review of the FTP 2015-20 has made provisions which will boost trade facilitation and ease of doing business… However, the exporters were hoping for measures which improve market access and cost competitiveness,” apparel exporters’ body AEPC Chairman Ashok Rajani said. “The mid-term review of the FTP 2015-20 has made provisions which will boost trade facilitation and ease of doing business… However, the exporters were hoping for measures which improve market access and cost competitiveness,” apparel exporters’ body AEPC Chairman Ashok Rajani said. Further, to provide impetus to services trade, the policy has raised the Service Exports from India Scheme by 2 per cent, envisaging an additional outgo of Rs 1,140 crore. Exporters’ body FIEO suggested that government should gradually extend the MEIS to other sectors of exports since they are also facing numerous challenges in exports. “A one-time relaxation to meet export obligation may be provided to industry so that it can escape penal provisions which will be disruptive and provide an opportunity to add to exports besides providing employment,” it said. “Mid-term review of the Foreign Trade Policy 2015-20 contains several positive features. Ficci is happy to see across-the-board rise of 2 per cent in MEIS incentive for exports by MSMEs and labour intensive sectors. This step was much-needed,” Ficci Secretary General Dr Sanjaya Baru said. “While exporters will be happy with the direction, they would look forward to some quick and long term solution to working capital blockage with respect to input GST,” Pratik Jain, Leader- Indirect Tax, PwC India, said. (With PTI inputs.)





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