Government targets $340 bn exports this fiscal

New Foreign Trade Policy will be 'different'

The new Foreign Trade Policy (FTPs) that will effective from 2014-2019 is going to be "different" from the previous ones, minister of state (independent charge) for commerce and industry Nirmala Sitharaman said today.

"Whatever was the structure of earlier FTPs, it would be different from that. The new FTP will hopefully come soon. We are in process of consultations. This FTP will create a stable and strong environment," Sitharaman said during a media briefing on completion of the 100 days of the NDA government.

However, she refused to specify the date as to when the FTP will be unveiled. It was earlier planned that the policy will be launched immediately after the finance budget in July. After that it was scheduled for middle of August which also did not happen.

The government has set a target of achieving total exports worth $500 billion in this fiscal, with merchandise and services exports reaching $340 billion and $160 billion respectively.

According to commerce department officials, the policy might be released next month.

Sitharaman said that the new FTP would include strategy, goals, road maps and timeframe for increasing exports. She also highlighted certain steps that the government has undertaken in order to reduce transaction costs through simplification of documents and procedures.

"We are a trade deficit country. There are several products where imports need to be appraised. We will see that the trade deficit level does not cross beyond a manageable limit," said commerce secretary Rajeev Kher.

The FTP is also expected to include measures for services exports, which reached $151.50 billion in the last fiscal while exports reached $314.40 billion in 2013-14.

In an effort to increase the country's manufacturing capacity, Sitharaman said that the government is looking to remove hurdles in order to ensure smooth operation of the special economic zones (SEZ).

SEZ contribute to about 25 per cent of the country's total exports. According to the minister a decision on minimum alternate tax (MAT) and Dividend Distribution Tax (DDT) will be announced soon to provide relief to the SEZ units and developers.

To help developers earn faster returns, the government is also mulling the option of dual usage. This means SEZs will be used for manufacturing as well as for exporting purposes. There will be clear demarcation on processing and non-processing zones with clear indication of incentives, said Kher.

On the issue of relaxing import duties on gold, Sitharaman said there are no immediate plans to reduce the duties.