Commerce Ministry begins review of foreign trade policy

The Commerce Ministry has started review of the foreign trade policy to carry out mid-course corrections in the export schemes, if required.

As part of the review, it would hold stakeholders' consultations to understand the issues faced by exporters.

"Sectors which feel they want something amended, deleted, tweaked or brought in, will have to engage with the Ministry. We certainly want lot more discussions," sources said.

The Ministry is also looking at the rollout of the Goods and Services Tax (GST).

"Right now, we have two schemes -- advance authorisation and Export Promotion Capital Goods (EPCG) where we allow duty free imports, right from the beginning. In GST regime, everybody have to pay the duty first and then seek reimbursement. So, once that gets decided by the GST council, then we can modify our schemes," the sources added.

In April 2015, the government unveiled its first five-year Foreign Trade Policy (FTP) aiming to nearly double exports of goods and services to USD 900 billion by 2020.

In the FTP (2015-20), the government replaced multiple schemes with Merchandise Exports from India Scheme (MEIS) and Services Exports from India Scheme (SEIS).

Since December 2014, exports fell for 18 months in a row till May 2016, due to weak global demand. Shipments witnessed growth only in June this year, thereafter again it entered the negative zone in July and August.

Recovering from a two-month decline, exports went up by 4.62 per cent to USD 22.9 billion in September.

To cut the transaction cost for exporters, the Ministry is also talking to railways and shipping to find ways to reduce the high freight cost.

On India's concept note about trade facilitation agreement in services in WTO, sources said the text is being scrutinised by the legal department.

Further, talking about the issue of overcapacity of steel in China and its impact on India, Ministry sources said that everybody is facing the heat of both overcapacity and subsidised exports of steel from China.

The OECD and the G-20 have been talking about it and in every fora, the issue comes up for discussion.

"China is clearly under pressure because this has become an issue of every global trade negotiations. People have now started realizing that this is completely trade distorting," they said.

When asked whether the issue is figuring in the RCEP negotiations, the sources said that RCEP may not be the right platform in which this particular issue could be sorted out.

"It is a major issue on which globally, there is lot happening," they added.