After 5-month delay, foreign trade policy review likely on Dec 5 AIMING FOR FOREIGN TRADE

After repeated delays over five months, the mid-term review of the Foreign Trade Policy (FTP) will be released by the government on December 5.

The five-year FTP is in effect since April 1, 2015. It aims to facilitate exports so that the country manages to send out $900 billion worth of goods and services by 2020. It also aims to increase India’s share of world exports to 3.5 per cent from 2 per cent.

The mid-term review is aimed to take stock of the changing aspects of global trade, rationalised trade norms, and bring into play new policies to boost trade facilitation. This includes tweaks in the export-promotion schemes. This review was supposed to coincide with the July 1 roll-out of the goods and services tax (GST).

At the last assessment meeting for the FTP, senior officials said the December deadline to release the review was difficult to meet. But, work picked up after a recent push from Commerce and Industry Minister Suresh Prabhu.

Senior officials added the FTP had been postponed on account of the debate on whether to reduce targets.

Exporters’ body Federation of Indian Export Organisations had informed the ministry the targets might need to be brought down, an official said. He indicated that the $900-billion target might be brought down finally.

FIEO Director General Ajay Sahai said exports would need to grow at a compound rate of 27 per cent annually till 2020 for the existing target to be reached.

“With global trade growth forecasts still slow at 2.4 per cent, I’m expecting a compound growth of 15 per cent annually for India’s exports,” Sahai said. “This will allow total exports to reach a cumulative $700-750 billion by 2020.”

Currently, experts were assessing the effects of the GST regime on exports and export-promotion schemes. There were | The five-year FTP is in effect since

April 1, 2015 | It aims to facilitate exports so that the country manages to send out $900 billion worth of goods and services by 2020 | This includes tweaks in the export-promotion schemes | The review was supposed to coincide with the July 1 roll-out of the goods and services tax new challenges every week, they said, and also pointed out that traders’ prime concern of a huge backlog of yet to be disbursed GST refunds. An attempt had been made to address this concern in the FTP.

Since July 1, when the new tax regime came into effect, merchandise exports have limped, on account of technical glitches, repeatedly changing export norms and operational issues such as low on-ground implementation.

India’s exports dipped for the first time in 15 months in October, falling 1.1 per cent. Last month’s trade deficit widened the most in three years to $14 billion. Exporters have also had to deal with state tax authorities who were not familiar with export procedures and, therefore, not willing to endorse documents.

All this happened even as the government moved fast to make key changes to procedural norms — including clarifications on calculation of currency exchange rates for drawback, changes to certification procedures, and provisions changing the requirement of bonds and letters of undertaking.

Complaints by exporters regarding reduced utility of duty credit scrips, which only cover basic Customs duty and not the Integrated GST, were also being looked into, another official said.