Indian export target set at US $ 200 billion in 2008-09
Foreign Trade Policy initiatives ihave resulted in increased trade activity and has generated additional employment of 136 lakh. India’s total merchandise trade (both exports and imports) will be US $ 400 billion during 2007-08, accounting for nearly 1.5% of world trade. If trade in services is added, Indian commercial engagement with the world would be to the tune of US $ 525 billion.
Foreign Trade Policy (2004-09) has more than doubled India’s exports in 4 years. The country’s exports in 2007-08 has exceeded US $ 155 billion from US $ 63 billion in 2004, registering a cumulative annual growth rate (CAGR) of 23%, year on year, way ahead of the average growth rate of international trade.
Exports that have been accomplished in the face of appreciation of rupee, high interest rates, spiraling oil prices, slow down in major trade markets, and withdrawal of some GSP benefits to India by other countries.
India announced a slew of innovative steps in the final annual supplement to FTP 2004-09, viz., extension of DEPB scheme till May 2009; interest at 6% for delayed refunds; reduction of customs duty payable under EPCG scheme from 5% to 3%; lowering of average export obligation under EPCG scheme; extension of income tax exemption to 100% EOUs beyond 2009; additional duty-free credit of 2.5% under VKGUY; additional credit of 5% for sports and goods industries under Focus Product Scheme; special focus initiative for IT sector; ensuring zero-rating of exports as far as domestic taxes are concerned; enhanced incentive of 2.5% under Focus Product Scheme; addition of 10 more countries in the Focus Market Scheme; inclusion of IT and ITES and R&D in natural sciences under the Industrial Park Scheme; establishment of EPC for Telecom; extension of re-import of branded jewellery to one year.
Observing that the transaction costs for exporters in India are very high, certain additional measures have been proposed such as bringing of Advance Authorization Scheme and EPCG Scheme under the EDI from 1st July, 2008; treating of all EDI ports as single port where there is no requirement of TRA under the Advanced Authorisation Scheme; payment of duty under EPCG scheme through debit of duty credit from 1st January 2009; reduction of application fee for duty credit scrips and EPCG authorization from Rs.5 per thousand to Rs.2 per thousand; reduction of application fee for importer and exporter code from Rs.1000 to Rs.250; reduction of fee for supplementary claims from 10% to 2%.
A Joint Task Force (JTF) has been set up to plan an integrated strategy to tackle these issues. The JTF will have representatives of the Central and State Governments, local bodies, industry and exporters to evolve a detailed action plan to achieve this objective. The JTF will be mandated to look at (1) development of world-class infrastructure to facilitate trade involving an investment of over $ 800 billion; (2) measures to ensure trade facilitation through EDI to match world-class standards; (3) development of global manufacturing hubs in selected sectors such as auto-components, gems & jewellery, textiles, petro-products etc.; (4) development of global services hubs in IT , KPO, industrial design, R&D and product testing; (5) development of a chain of sector-specific skill-development institutes; and (6) encouraging e-commerce through e-governance.
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