Foreign Trade Policy Review: Interaction with Commerce and Industry Minister

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Foreign Trade Policy Review: Interaction with Commerce and Industry Minister

Garima Prakash

@GarimaP

December 16, 2020

Public Policy

391

The Directorate General of Foreign Trade (DGFT) is reviewing the Foreign Trade Policy (2015-2020), with the objective of formulating a new Foreign Trade Policy (FTP) which will come into effect once the current FTP (2015-2020) expires in March 2021. Based on member inputs, NASSCOM had submitted its comments to DGFT on the ongoing FTP review (here).

As part of the consultation process, an interaction was organised on 07 December 2020, with the Minister of Commerce and Industry, Shri Piyush Goyal. The Commerce Secretary, Shri Anup Wadhawan and senior officials from the DGFT were also present. Representatives of various industry associations, including NASSCOM, participated in the discussion. During the interaction, NASSCOM made the following specific suggestions:

e-Commerce: e-commerce exports present an opportunity for Indian exporters to expand their market access with minimal upfront costs, by leveraging the infrastructure already in existence. This opportunity can be better realised by including e-commerce exporters for various benefits provided by the FTP. Therefore, FTP should focus on encouraging e-commerce exports by placing specific reference for the inclusion of e-commerce exports, in the following manner:
- Inclusion of e-commerce exports platforms for entitlement of benefits under Niryat Bandhu Scheme
- Establishment of dedicated e-commerce export promotion cells within existing export promotion councils
- Extending Market Access Initiative (MAI) support to individual e-commerce exporters
- Establishment of e-Commerce Export Zones to promote development & growth of MSMEs
- Allotting dedicated e-commerce exports clearance lanes for faster clearance of time-sensitive e-commerce export shipments
- Import-duty exemption for re-import of unsold/returned goods sold through e-commerce exports

Details of the benefits to be provided for e-commerce exports should be decided by the government by holding consultations with the industry

Special Economic Zones (SEZ): Current list of information technology (IT) assets should be reviewed and made more exhaustive for a ‘work-from home’ situation. Currently (as per para 6.07(b) of the Handbook of Procedures), only laptops, computers and video projection systems are allowed to be taken out of the premises of a unit for working upon by employees. There are many other IT assets which are needed by the employees in a work-from-home situation. Accordingly, this list of IT assets should be reviewed and made more exhaustive.

The Minister acknowledged this and asked DGFT officials to take this forward with NASSCOM and address all concerns regarding SEZs.

Services Export Incentive Scheme (SEIS): Since inception, SEIS has provided huge fillip and much needed support to the service industry. However, with growing competition from countries like China, Philippines etc., the continuation of SEIS is seen as a critical factor for Indian exporters to retain their competitive advantage. Therefore, considering the significance of the benefits from SEIS scheme, this scheme should be continued under the new FTP. Moreover, currently STPI units cannot avail of SEIS benefits, which has put them in a significantly non-competitive position as compared to units in SEZs and domestic tariff area.

Accordingly, NASSCOM has suggested for the revision of FTP to extend SEIS benefits to the new FTP as well as include STPI units within the benefits of SEIS.

A few other points were highlighted by the Minister, regarding the vision for a revised trade policy in India and giving an insight into what the Ministry of Commerce and Industry may consider for the new FTP:

Expansion of Remission of Duties or Taxes on Export Products (RoDTEP) scheme for all sectors
Revision of the SEZ scheme to make it WTO compliant;
Devise a ‘Plan India’ in co-participation with Invest India, India Brand Equity Foundation (IBEF) and private sector to boost exports and attract investments;
Notification of extension of period to fulfil export obligation for relevant schemes such as Export Promotion of Capital Goods (EPCG) Scheme;
Devising a simplified scheme for Micro, Small and Medium Enterprises (MSME) to promote exports, along with a strict action procedure in case of abuse/misuse by MSMEs;
Possibility to establish an online grievance redressal forum at DGFT – open Video Conference facility at a dedicated time every week presided by a senior official of the DGFT, for addressing exporters’ grievances;
Possibility of unification of all export promotion agencies into one apex national body, just like Japan External Trade Organization and Korean Trade Investment Promotion Organization; Invited proposals/concept note from the industry.

Details of the complete submission made by NASSCOM to the DGFT for revision of the FTP can be found here. For more information, please write to garima@nasscom.in.

e-commerce FTP DGFT SEIS sez Trade Foreign Trade trade policy

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Garima Prakash

Manager, Public Policy and Government Affairs

Reach out to me for all things policy about e-commerce, international trade, export controls, start-ups and fintech