The government has formed a high-level committee to assess how customs duties, export incentives, GST and export clearance procedures are impacting India’s outbound shipments in the middle of a difficult global trade environment, Economic Times reported.
The panel includes senior officials from the ministries of commerce and industry, finance, and representatives from trade bodies. It will propose measures to simplify documentation, customs processes, port clearances and logistics, officials told Economic Times.
“The committee will look at export-related tax structure and customs clearances for all geographies and see where all easing can be done,” one official said.
Exports at seven-month low
India’s goods exports in June slipped 0.05 percent year-on-year to $35.14 billion, the lowest in seven months, while imports fell 3.71 percent to $53.92 billion. The trade deficit stood at $18.78 billion compared with $20.84 billion in June last year.
The committee will not only address tax and clearance issues faced by domestic manufacturers, but will also identify global best practices and recommend reforms to streamline export processes, Economic Times noted.
Backdrop: US ramps up tariffs
The move comes as the US has slapped a 50 percent tariff on imports from India, the steepest on any country and on par with Brazil. Trump signed the executive order on Wednesday, doubling the existing 25 percent duty to 50 percent. The first phase came into effect Thursday, and the additional 25 percent will apply from August 27.
Trade tensions have been rising after talks between the two countries stalled, with the US seeking greater market access and criticising India’s Russian oil purchases.
India’s three-pronged response
According to Economic Times, New Delhi is working on a three-part plan to counter the US tariff hike:
Tailor-made schemes under the proposed Export Promotion Mission to support affected sectors
Diversion of goods to other geographies to offset the loss of US orders
Redirecting low-order products to meet domestic demand
The commerce and industry ministry has also urged exporters to promote homegrown brands to withstand the steep US duties.
Rs 20,000 crore long-term shield
By September, the government aims to roll out a Rs 20,000 crore long-term strategy under the Export Promotion Mission to protect exporters from global trade volatility. The plan will focus on improving access to export credit and tackling non-tariff barriers in overseas markets, Economic Times said.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
