With focus on boosting the exports of goods and services and to increase employment generation and value-addition in the country, the Union government released mid-term review of the much awaited Foreign Trade Policy (FTP) (2015-20). The mid-term review of FTP is aimed at mid-course correction, to address working capital issues and provide measures to arrest declining shipments. It was to be announced on July 1, together with the implementation of the goods and services tax (GST) regime. But the announcement was postponed to take into account feedback from the export sector regarding GST-related issues.
The mid-term review of the FTP has brought in additional relief for the labour-intensive and micro, small and medium enterprises (MSME) sectors. The government has increased the incentives under the Merchandise Exports from India Scheme (MEIS) increased by 2 percent to 4 percent. Similarly, under the Services Export from India Scheme (SEIS), incentives have been increased by 2 percent. The validity for duty credit scrips raised to 24 months from 18 months, to allow duty-free imports for export on self-certification.
Commerce and Industry Minister Suresh Prabhu has said that the increase in annual incentive by 34 percent to Rs 8,450 crore will benefit leather, handicraft, carpets, sports goods, agriculture, marine, electronic components and project exports. The FTP will provide additional annual incentive of Rs 749 crore for the leather sector, Rs 921 crore for hand-made carpets of silk, handloom, coir, jute products, Rs 1,354 crore for agri products, Rs 759 crore for marine products, Rs 369 crore for telecom, electronic components, Rs 193 crore for medical equipment. He added that green shoots in export growth are distinctly visible now with positive export growth in 13 of the past 14 months.
The government also proposed a higher level of incentives for export of agriculture products under FTP. The FTP also sought to establish an Export Promotion Mission to provide an institutional framework to work with State Governments to boost India's exports. The government also aimed to promote and boost export of defence goods. Besides, an e-wallet system to address the liquidity problem being faced by exporters is likely to be operational from April 01, 2018. The government has expressed hope that the GST would help to push exports growth.