Unveiling the annual supplement to the Foreign Trade Policy (2009-2014), Anup K Pujari, Director General of Foreign Trade, said the target of doubling India’s annual exports to $500 billion by 2014 was not impossible. In an interview with Nayanima Basu on the sidelines of the event, he said the government was watching the global economic situation and strategising accordingly to achieve the target. Edited excerpts:
Will the annual supplement to FTP be able to arrest plummeting Indian exports?
We have done what was possible to the best of our abilities and this is something where both the commerce and the finance ministers came together, along with related ministries. All the demands of exporters have been carefully taken into account. The coordination level between ministries has been fairly high this time.
Will the steps announced so far in FTP culminate in India achieving $500 billion worth of exports by FY14? Also, looking at the global economic condition, will we be able to achieve 20 per cent growth in exports this financial year over last year?
We are taking one step at a time to achieve this target. Some steps we took in the past three years may look minimal at a glance but if you see all these steps together, they will yield results in the long run. The target is difficult but not impossible. This year, we have set a modest target of 20 per cent (growth) because we are careful and we will be watching the situation carefully.
One of the significant announcements today was boosting the domestic manufacturing sector through utilisation of scrips. Could you explain the rationale?
One of the things we could do this time, which I believe is significant, is allowing the duty credit scrips to be sourced for domestic procurement. We think this will not only help revive the domestic manufacturing sector but also help most exporters to use their scrips. This was much needed. It would also force exporters to look into the domestic market for sourcing products, instead of importing it from outside. Also, this would lead to import substitution. Both these things are important. I believe it is one of the main achievements of this year’s FTP.
What effects do you foresee on Indian exports due to the rupee’s steep fall?
While the rupee’s depreciation has benefited exporters to some extent, this has made importers very unhappy. This is not an issue where we can do something. As I said, we will watch and see where and when we can intervene.
For the past three years, the ministry had been conducting a mid-year review to assess the benefits given under FTP. Will you do it this year, too?
No one knows what will happen tomorrow. We will keep intervening as and when required. So far, there is no plan for such a review.
You have announced a major initiative in the form of electronic transmission of Foreign Exchange Realisation or e-BRC. How will it benefit exporters?
When an exporter was exporting, he would get the money after six months, then he would have applied to the commerce ministry to avail the benefit against a certificate issued by the bank. On the other hand, the banks were facing difficulties in catering to small and marginal exporters; the problem was not that much for the big exporters. So, this was one of the major announcements made today and it took us two years to get this operationalised. The pilot project has already started from April 1. This will be made mandatory for all transactions very soon. It would save both time and money. This would now allow electronic transmission of Foreign Exchange Realisation from the banks to our (DGFT’s) server daily.
Earlier, bankers were benefiting more than exporters; now, exporters will get the benefit, as it will reduce their transaction cost.