Fan­ning the Trade Winds

Ex­ports could boost growth, but first they need pol­icy clar­ity and in­cen­tives

India Today - - EXPORTS - By Sh­wweta Punj

The Jour­ney So Far

The com­merce min­istry has cir­cu­lated a cab­i­net note to phase out the Mer­chan­dise Ex­ports from In­dia scheme. It will be re­placed by one more com­pat­i­ble with World Trade Or­ga­ni­za­tion rules.

The gov­ern­ment has raised cus­toms du­ties on sev­eral items by 2.5-10 per­cent­age points. These items to­gether ac­counted for an im­port bill of Rs 86,000 crore in FY 2018. This is ex­pected to rein in the cur­rent ac­count deficit and boost the ru­pee.

The SEZ Amend­ment Bill al­lows any en­tity to set up a unit in spe­cial eco­nomic zones. This is ex­pected to boost ex­ports.

Is It Enough?

Whether one con­sid­ers the in­crease in im­port du­ties or the lack of proac­tive mea­sures to take ad­van­tage of the US­China trade war, the lack of pol­icy co­her­ence (and struc­tural is­sues) con­tinue to bog down the sec­tor

The Un­fin­ished Agenda

Lower im­port du­ties. Sev­eral sec­tors, such as phar­ma­ceu­ti­cals and auto com­po­nents, are im­port de­pen­dent. Data sug­gests In­dia has ben­e­fited from lower im­port tar­iffs— brought down from 300­400 per cent in 1991 to about 7 per cent un­til last year

Clearly spell out In­dia’s pol­icy stance on the ru­pee

ALL ON DECK? Con­tainer ships at the Nhava Sheva port near Mum­bai

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