September 23, 2022
New Foreign Trade Policy expected to enhance ease of doing exports from India: PHD Chamber
The upcoming Foreign Trade Policy (FTP) is expected to be the key to defining the strategy for India to capture a significant share in the world economic system amid the changing global supply-chains, trade and investments dynamics, said Mr Pradeep Multani, President, PHD Chamber of Commerce and Industry.
At this juncture, we expect the New Foreign Trade Policy to ease exports centric trade with enhanced trade facilitation measures by the Government, said Mr Pradeep Multani.
During its interactions with DGFT, PHDCCI had suggested various FTP specific points and some others that are outside FTP but directly related to trade.
PHDCCI has advocated identification and promotion of potential products from specific districts as also suggested by Honourable PM. PHDCCI had also researched and had published a report of high potential 75 products from 75 districts.
Given the growing importance of E-Commerce exports, PHDCCI has been advocating a focussed policy chapter for the same.
PHDCCI has also been suggesting a simpler scheme for Duty Exemption on the lines of IGCR (Import of Goods at Concessional Rate of Duty) under section 25 of Customs Act, where self-declaration is relied upon with some supervision. If this is difficult PHDCCI had suggested and given a detailed presentation for simplification in the current Duty Exemption scheme itself where details of Exports and Import items need not be given in the beginning. This will simplify the process and may help the country’s manufacturers immensely in being internationally competitive, he added.
Export Promotion Capital Goods (EPCG) Scheme has been very successful both for boosting industrialisation as well as encouraging manufacturers to increase exports and explore newer markets. At this juncture, we expect continuation of the scheme, said Mr Pradeep Multani.
Mr Multani also pointed out that while the RoDTEP scheme was supposed to take care of various duties and taxes outside GST, which becomes the cost of exports, it is unable to do so because of various anomalies, restrictions and very low rates. PHDCCI had suggested RoDTEP on specific exporter basis that can be applied basis actual duties suffered by the specific exporter, akin to Brand rate of Duty Drawback.
SEIS- Service Export Incentive Scheme that has been discontinued should be reformed to take care of specific sectors like travel and tourism, as well as to those who provide services in host countries against international competition like construction etc. Since the scheme is WTO compliant, it would help improve competitiveness of the specific service exporters, said Mr Pradeep Multani.
Buying agents/Consultants of foreign buyers are key intermediaries who facilitate MSME exports of 1 billion plus dollars annually, however, instead of rewarding them with “Service Export Incentive” the services are made taxable under GST Act @ 18%, said Mr Pradeep Multani. We expect removal of charging of GST on the International Buyers as it is a sort of “Export of Taxes” which is against the basic contention of the GST ACT as well as against the International Trade Practices, he added.
The rate of duty drawback is expected to be increased to a minimum rate of 1.5% to offset input taxes on pharmaceuticals products and promote local manufacturing, said Mr Pradeep Multani.
The new foreign trade policy is expected to set out strategies to diversify the portfolio of our export products in terms of more countries and also in terms of more products, where India has core competence, said Mr Pradeep Multani.
There lies a massive scope for Indian exporters in the product categories wherein it could capture the high world demand by strengthening its export-oriented firms in the sectors, including Vehicles, parts and accessories of vehicles, Petroleum oils and Medicines and Electric Cables and OFC, said Mr Pradeep Multani.
We foresee an accelerated focus on expanding supply of skilled manpower and R&D expansion in the new policy, said Mr Pradeep Multani
In some technology-intensive sectors, including biotechnology, pharmaceuticals and medical devices, there is a need to expand the talent pool and develop a highly skilled manpower base to meet the growing customer needs both domestically and internationally, said Mr Pradeep Multani.
Further, it is extremely crucial to stimulate research and development efforts for climbing up the value chain in exports. Thus, we envision strategies for stronger industry-academia linkages in the policy, he added.
We expect high focus on leveraging India’s potential in the Services sector for greater export revenue as education services, healthcare, financial and tourism services hold immense potential to increase India’s share in global services exports, said Mr Pradeep Multani.
We believe that the new Foreign Trade Policy (2022-2027) will provide a renewed thrust by addressing the much-needed areas requiring utmost attention to make India’s foreign trade more competitive, said Mr Pradeep Multani.
PHD Chamber of Commerce and Industry