Finally, new Foreign Trade Policy to be unveiled on April 1

The government is going to finally unveil the new Foreign Trade Policy (FTP) for 2015-2020 on April 1. It is expected to offer a slew of incentives for the exporters who are reeling under a slowdown in global demand.

The government, which came to power in May 2014, was expected to release the policy last year. However, it was not able to do so as the focus was put on promoting the concepts of Make in India, Digital India and facilitating ease of business, which also helped promoting merchandise exports from India.

It is expected that this year the FTP will not only focus on offering incentives to the sectors that getting clobbered due to external conditions, it will also offer sops to those sectors that are having a robust performance despite weak global factors. These include textiles, engineering and electronic goods, officials told Business Standard. The government might also announce some incentives like duty-free scrips for some of the labour-intensive sectors such as leather and handicrafts.

Apparently, there is also a possibility that the government might expand the Focus Market Scheme under which exporters can seek assistance through Indian missions and embassies located abroad.

The new FTP is expected to be much different a document compared to the previous FTPs. The ministry of commerce and industry has made it explicit that the new FTP will have a separate chapter on promotion of project exports and better utilization of the free trade agreements (FTA).

All these years, the FTP has been more favourable towards exports compared to imports. Bucking the trend, this time the government might announce measures to promote the import of value-added imports.

“The labour component particularly in merchandise exports has declined from 34.2 per cent in 1998-99 to 27.9 per cent in 2007-08 which may be due to changing profile of India’s exports including emergence of petroleum sector, automobile, pharmaceuticals etc. as the new and dominant sector of exports. Labour intensive sectors may be given a boost in view of high employment opportunities in such sectors coupled with the fact that many Asian countries particularly China is gradually exiting from such sectors. However, this would require equal emphasis on skilling India as on Make in India,” said M Rafeeque Ahmed, president, Federation of Indian Export Organisations (FIEO).

In the present fiscal total exports during April-February reached $286.58 billion. The set target was that of $340 billion worth of exports. However, there are fears that it might attain the goal as exports had been contracting for three straight months December onwards.

Last fiscal exports reached $314.40 billion.