Nirmala Ducks Question on Firm Date for FTP 2014-19, says Policy Release, “Very Soon

- Arun Goyal -

The Commerce Minister Nirmala Sitharaman said that the Five Year Foreign Trade Policy will be released “Very Soon” in a Press Conference in the Capital on 10 Sept. (Our sources say that Prime Minister Modi has not yet made his mind on the “new look” FTP which is already delayed. The 2009-2014 policy expired six months ago on 31 March 2014. Trade and Industry are not sure on what the future will be, the uncertainty is affecting fresh contracting. Another source said that the Ministry has run out of ideas, it is groping for a vision which goes beyond growth rates and trade shares).

Minister Nirmala Sitharaman and Commerce Secretary Rajeev Kher talked about procedural reforms and minor matters of State participation in Export Promotion. There was no talk of the “Make in India” slogan in the I-Day Speech of PM Modi from the ramparts of Red Fort. (Far reaching reform of duty free access to raw materials for export production will be required. A shift from Input-Output Norms based control for Advance Authorisation of Imports for Export Production will be necessary. Return to the REP type instruments with market based negotiability for Advance Authorisation and Reward Scrips is a must. In the absence of a proper policy frame, resort to procedural simplifications and EDI will be, at best, palliatives).

India’s relative position in trade vis-à-vis competitors like China is falling. Doling out growth figures makes no sense in the absence of comparisons, with competition.

Highlights from Commerce Minister Nirmala Sitharaman’s addresses media persons at PIB National Media Centre on 10 September 2014

Foreign Trade Policy (FTP)

The New Foreign Trade Policy (FTP) (2014-19) is on the anvil, which would include strategy, goals, road maps and timeframe for increasing exports. This would be comprehensive and composite, focussing on: products which are winners and potential winners, targeted global engagements, branding and packaging measures etc.

Trade Promotion and Reforms

• Reduction in transaction costs through initiatives for simplification of documents and procedures

Re-alignment, redrafting and synchronisation of paragraphs in all Chapters of FTP/HBP to bring in more clarity, rationalize the number in Schemes (Chapter-3) and to ensure that provisions are placed in an orderly manner. Number of columns in Application forms for various schemes is being reduced to the minimum.

• Digitization of various processes

(i) Procedural simplification and on-line inter-ministerial consultation

In order to simplify the various procedures, it has been proposed to do inter-ministerial consultations online where exporters can file their applications on the DGFT website. This will reduce the transaction cost and transaction time and also bring transparency in the system.

(ii) Discontinuation of printing of all authorisation and EODC – Moving towards paperless work

DGFT has proposed not to issue any authorisations in physical form and would like to issue authorisations under duty exemption, EPCG Schemes and scrips in an electronic form. This will make a paperless transaction a reality. We are working with CBEC to take this initiative forward.

India’s Strong Stand in the WTO

India has taken a leadership role to:

Rectify the imbalance in the Bali package implementation process and prevent the development being subverted again. Stand taken by India includes reiteration of the position that India is committed to all the Bali Decisions including Trade facilitation. However, for a balanced Bali outcome, WTO must deliver on the other Bali Decisions, including the Decision on public stockholding for food security purposes in a time bound manner.

Ensure a permanent solution on public stockholding for food security to correct a longstanding injustice in WTO rules. India also offered suggestions on the procedure to be followed in order to ensure time bound delivery of an outcome on public stockholding for food security. India also made a case for adopting a similar approach on all the elements of the Bali package including the LDC issues.

Extensive review of Special Economic Zones for re-energizing manufacturing-led exports. Governance reforms in SEZs e.g.

• Prescription of time limits for disposal of various activities related to SEZ Developers/Units

• Digitization of procedures

• Standardization of procedures, harmonization of rules, formats and fees etc.

• Decisions on modification of MAT & DDT and the dual use of infrastructure in non-processing areas, these proposals are in active consideration

• Other issues such as those relating to Service Tax, extending the tax holiday for the pharmaceutical industry and extension of Customs ICEGATE system to the SEZ framework, are being actively pursued

Plantations

• An insurance based scheme being evolved for stabilization of prices of four plantation crops (Tea, Coffee, Rubber and Spices).

• A National Policy for rubber sector being formulated

• A special agency, namely the ‘Saffron Production& Export Development Agency’ (SPEDA) to be set up for development, production and marketing of saffron with headquarters in Jammu & Kashmir.

• Additional measures for promotion of export of orthodox and packaged tea and GI branding of tea are likely to be announced in the Foreign Trade Policy. Subsidy-based support under the XII Plan will be redesigned to achieve the goal of enhancing production as well as exports.

• Policy measures will be taken to improve quality of grown/manufactured tea. Steps will be taken to fix, within an early time frame, MRLs for chemicals authorized for use in tea cultivation in light of the CODEX standards.

• An exercise of resetting the goals and functions of Commodity Boards and making them more citizen-centric will be taken up.

• Branding campaigns planned for promotion of export of specific sectors such as services, pharmaceuticals, plantation commodities, engineering, and commodities/services in which India has historical strengths such as handicrafts, yoga etc.

• Indian Institute of Packaging to be strengthened to emerge as a technology hub/centre for setting packaging standards of export oriented products in line with international trends/norms and improving/controlling quality of export packages.

Initiatives for Africa

• 4^th India – Africa Trade Ministers’ Meet in New Delhi on 28 November 2014; the recommendations of this Meet will be considered by the Heads of Government during the India – Africa Forum Summit – III on 4 - 5 December 2014.

• Meeting of the India – Africa Business Council to be held, along with Trade Ministers’ Meet.

E-procurement

• An ambitious programme for e-procurement in States to be supported

• 23 States are already on board; others will also be taken on board; objective is wider and deeper coverage

• The target is that over the next 1 year, there will be a shift to e-tendering for all procurement exceeding Rs. 5 lakh

Project Exports

• Focus on Project exports, specially to Africa, West Asia, CIS countries, ASEAN and Cambodia, Laos, Myanmar and Vietnam.

Improving Production Standards and Building Brand India

• A mandatory standards regime to be implemented, to protect consumers and also raise the quality of merchandise produced which in turn raises the capacity to export to discerning markets.

• This together with promotion of our traditional brands of goods like tea, spices, ayurvedic products and services like, yoga, wellness and health care as valued Indian brands can lead to greater value addition and export realization.

• The export diversification policy pursued by the Government needs to be accelerated by expanding both the range of products and number of countries. Indian exports should move up the value chain. Export of branded goods needs to be encouraged by promoting individual brands. Manufacturing exports require strong brand promotion. Sectors like Gems and Jewellery, Leather, Textiles, Engineering etc. are striving to carve an exclusive ‘Brand India‘ niche for themselves in the world markets.

• India Brand Equity Foundation (IBEF) is playing a key role in product perception and production promotion strategies in international markets. IBEF’s primary objective is to promote and create international awareness of the Made in India label in markets overseas and to facilitate the dissemination of knowledge of Indian products and services. Towards this objective, IBEF works closely with stakeholders across government and industry.