New foreign trade policy to be 'different': Nirmala Sitharaman

The new five-year foreign trade policy (FTP) for 2014-2019 will be "different" from the previous ones, commerce minister Nirmala Sitharaman said here on Wednesday.

"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 the completion of 100 days of the Narendra Modi government.

However, she did not specify exactly when the FTP will be unveiled. Earlier, the policy was planned to be launched immediately after the Budget in July. It was later scheduled for the middle of August, which also did not happen.

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

Commerce department officials hinted the policy would be released next month.

Sitharaman said the new FTP would include strategy, goals, road maps and timeframe for increasing exports. She also highlighted certain steps the government has undertaken 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 the trade-deficit level does not cross beyond a manageable limit," said Rajeev Kher, commerce secretary.

The FTP is also expected to include measures for services exports, which reached $151.50 billion in FY14, while merchandise exports reached $314.40 billion in 2013-14.

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

SEZs 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 a clear demarcation on processing and non-processing zones with clear indication of incentives, Kher noted.

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