Page 57 - Chemexcil NEWS August - September 2017 for web

36. FOREIGN TRADE POLICY REVIEW MAY BE DELAYED
NEW DELHI, SEPTEMBER 21:
Exporters may have to wait an extra month, or
even more, for the foreign trade policy (FTP)
review, earlier scheduled for September, as the
government is still grappling with implementa-
tion issues related to the Goods and Services Tax
(GST).
The Centre has also not taken a call on the future
of export incentive schemes that may no longer be
permissible under the World Trade Organisation
rules as India has graduated out of the list of
poorer countries allowed to give export subsidies.
“It is unlikely that the FTP review will be announced the schemes that could be affected because of
before October-end. It may happen even later
depending on the pace at which the concerns of
exporters are sorted out,” a government official
told BusinessLine.
The five-year FTP announced on April 1, 2015,
which laid an ambitious annual target of touching
$900 billion of exports by 2020, provided for a
review when the policy was half-way through and
not on an annual basis as was the earlier practice.
“The idea was not to tinker too much with the
policy and instead do an analysis when it was
half-way through and do course corrections if
required,” the official said.
Two-and-a-half-years after the FTP was announced,
the Commerce Ministry finds its hands full with
the number of concerns it might need to address
while reviewing the policy.
“Addressing the issues arising from
implementation of the GST is top priority as it
is bothering exporters most. The Centre has to
ensure that refund of input taxes happens on time
and exemptions may be given where necessary
to help exporters maintain their liquidity. This can
take time as not only will the Finance Ministry will
have to be on board, the GST Council ultimately
will have to pass the revisions,” the official said,
adding that the Council would next meet only
sometime in October.
Sop scheme
Incentive scheme for exporters is another tricky
area in the review as earlier this year the WTO
declared that India’s per capita Gross National
Product (GNP) exceeded $1000 for three years in
a row (2013. 2012, 2015) making it ineligible for
export incentives that only poorer countries are
allowed.
“The Commerce Ministry has to first identify
India’s new status and then plan how to phase out
those schemes and replace them with production
subsidies that are allowed under the WTO. This is
again an onerous exercise,” the official said.
While the Merchandise Export Incentive Scheme
under which incentives based on value of exports
is provided to over 7,000 items would no doubt be
one of the affected schemes, the government has
to examine the validity of other schemes such as
interest subvention.
Ambitious target
The ambitious export target of $900 billion fixed
for 2020 is also a problem since exports have
moved sluggishly over the last two years hovering
around $300 billion and there is no scope of
reaching the target. “Not only does the target
need to be brought down to a realistic level, some
more schemes have to be devised to accelerate
exports,” the official said.
(Source:- http://www.thehindubusinessline.com/economy/
policy/ftp-delayed-by-at-least-a-month-as-govt-grapples-with-
gst-export-subsidy-schemes/article9867630.ece dated 21st
Sept-2017)
55 August-September-2017