Robust Foreign Trade Policy needed to support hard-pressed exporters
After the extension of existing Foreign Trade Policy till March 31, 2021 in the wake of pandemic, a new FTP has to be consistent with the new normal by rationalising the duty structure.
An overhaul in the foreign trade policy in terms of rationalisation of duty structure is the need of the hour in order to increase the participation of domestic goods in the global value chain. As exporters worldwide are faced with unprecedented times due to protectionist approaches adopted by most of the countries to ramp up their domestic economies, the situation demands flexible policies.
According to a research paper released by Confederation of Indian Industry (CII), the careful calibration of import and export duties can be done by taking a cue from many countries where duty structure is made in a manner to impose the lowest duty on the raw material.
The present FTP is oriented around an incentive scheme called Merchandise Exports from India Scheme (MEIS) wherein exporters receive duty credit scrips for a percentage of the value of the goods exported which are used to pay a variety of taxes and duties.
India has decided to withdraw the MEIS and replace it with a more nuanced Remission of Duties or Taxes on Export Products (RoDTEP) scheme but there is a lot to be done in terms of infrastructure and upgrading the skill of exporters as there are many exporters especially associated with MSMEs who are ignorant about the information on credit availability, intellectual property rights, patents, GI tags, and others which play a significant role in export import market.
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