FTP review - positive step towards growth

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Bikky Khosla | 25 Aug, 2010
Monday saw the government rightly extending sops worth Rs 1,050 crore for exporters in the review of the Foreign Trade Policy (FTP) 2009-2014 to help them ward off the difficulties faced due to a fragile global economy.

The government's focus on the labour-intensive sectors needs to be applauded because these sectors have been hit really hard due to shrinking demand of their goods in India's traditional export markets. The recent FTP review gives a feeling that a lot of thought has gone into analyzing these struggling sectors before the announcements were made public.

All will perhaps agree with me that the recent review of the FTP and the announcements made is a step in the right direction in not only making India's exports competitive, but also in achieving the $200 billion target in 2010-11.

The assurances by the Commerce Ministry that there would not be any premature withdrawal of the stimulus measures will really do a world of good to boost the exporters' confidence, who were living with the fear that the government might suddenly withdraw all sops. This is also probably the first time that the government has touched the subject of transaction costs of the exporters, assuring that these costs will be reduced by almost 40 percent in less than two months...good news I would say!

The facility of interest subvention of 2 percent, currently available for handicrafts, handlooms, carpets and SMEs, has also been extended for a number of products pertaining to leather and leather manufacturers, jute manufacturing, including floor covering, engineering goods and textile sector for the current financial year. In addition, the Duty Entitlement Pass Book (DEPB) scheme, under which the government reimburses duties on imported inputs used in exports, has been extended, although for the last time, till June 30, 2011. The zero duty Export Promotion for Capital Goods (EPCG) scheme and the Status Holders Incentive (SHI) scheme have been rightly extended for one more year till March 31, 2011.

Another positive I found is the government's decision to carry out a review of impact of the FTP in exports in December, which I think will enable the authorities to take necessary measures to boost exports then. It is indeed a good move and will help in evaluating the impact of various policy measures taken by the Commerce Ministry on various industrial sectors.

I think all-in-all the announcements made in the FTP annual review are progressive and will help exporters to reach their targets.