Laying a strong roadmap for the future under the Foreign Trade Policy 2015-20, the Government of India has targeted merchandise and services exports of US$ 900 billion by 2019-20 from US$ 465.9 billion in 2013-14, thereby raising India’s share in global exports from 2 per cent to 3.5 per cent. The policy aims to link rules, procedures and incentives for exports and imports with other government initiatives like Make in India, Digital India and Skills India to create an Export Promotion Mission. Focus sectors have been identified for their strengths and potential and the government will also look at ways to bolster trade engagements to enable better export diversification. The policy notably looks to enable greater participation from governments across states and union territories towards promotion of exports.
A number of initiatives have been taken by the Central Government to promote exports. Primary among them is the merging of several export promotion schemes into two schemes – Merchandise Exports from India Scheme (MEIS) and Services Exports from India Scheme (SEIS). There will be no conditionality attached to any of the scrips issued under these schemes. Also the duty credit scrips issued under these schemes and the goods imported against them will be completely transferable. The benefits of these schemes have also been extended to units situated in Special Economic Zones (SEZs). The FTP has also reduced Export Obligation (EO) by 25 per cent for procurement of capital goods from domestic manufacturers. MEIS will provide greater benefits to exported products with higher domestic content and value addition. Notably, goods exported under the categories of handloom products, books/periodicals, leather footwear, toys and customised fashion garments with FOB values of up to Rs 25,000 per consignment by leveraging the e-commerce platform will be eligible for FTP benefits.
The policy document recognises the services sector as an area of high potential. India’s share of global services exports rose from 0.6 per cent in 1990 to 1 per cent in 2000 and 3.3 per cent in 2013, growing much faster than the country’s share in global merchandise exports. SEIS will apply to service providers that are located in India as opposed to Indian service providers. The rate of incentive under the scheme will be based on the net foreign exchange earned. Efforts will be taken to provide market access through Comprehensive Economic Partnership Agreements (CEPAs) with target markets and a Global Exhibition on Services will be held annually to promote India’s strengths and dynamism in the services sector.
A two tier branding strategy is also being worked out, which will be carried out by the India Brand Equity Foundation (IBEF). The first objective is to identify and clearly articulate the elements that are core to the Brand India positioning and then clearly communicate them in target markets through a 360 degree marketing campaign. At the second level, the government will endeavour to promote those brands from India that have the potential to become or have already emerged as global brands. Sector specific brand campaigns are being planned for sectors like services, pharmaceuticals, plantations and engineering as well as for products and services that represent India’s traditional strengths like handicrafts and yoga.
Going broadly in line with the WTO norms that require gradual phasing out of subsidies, the Government of India is committed to enable fundamental improvements in India’s export competitiveness and also ensure greater market access. This forward looking approach is the cornerstone of the newly announced FTP, which promises a renewed momentum in India’s export performance in the coming years.