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What do you expect from the upcoming Foreign Trade Policy?
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Bikky Khosla | 26 Mar, 2013
The Budget 2013 has failed to inspire hope among our exporters, and now with the Foreign Trade Policy (FTP) likely to be announced in the first week of April, all eyes are on the Commerce Minister. What steps do you want him to take for the sector? The demands may be a good many but considering the tough phase the economy is going through currently, I think it's going to be tough for the minister to decide what to give and what to take.
In the Board of Trade meeting held last week, Anand Sharma stressed on support for the export sector, but at the same time he pointed out to the difficulty of the current economic situation, adding that "it is much more difficult to make some kind of interventions or to work out the stimulus packages". This is true beyond doubt - the economy is in trouble, but I still think scrutiny is inevitable and justifiable as it is in these moments of crisis people expect their government to rise to the challenge.
I hope the upcoming FTP would address at least those concerns which have been hanging like a sword of Damocles over our exporters for quite a long time. Among them, credit unavailability tops the list. The flow of credit - in general as well as in terms of foreign currency pre-shipment loan - needs to be increased while the cost of credit needs to be brought down. In addition, the government should stop turning a blind eye to an age-old problem - suffering by small businesses due to the current red tape and corruption-infected loan disbursal system.
In addition, I expect the upcoming FTP to introduce some strong measures to reduce the tax burden on MSME exporters, provide marketing support, upgrade infrastructure, boost manufacturing to step up export of manufacturing goods. Our MSME export sector is in dire need of some comprehensive measures in this direction to combat the global challenges. Plus, special attention should be given to the labor-intensive and SME-dominated sectors, such as leather, engineering goods, textiles, carpets and handloom.
For some time now, policy makers, including Finance Minister P Chidambaram in his recent Budget speech, and some Commerce Ministry officials, are viewing that the ongoing export slowdown is primarily due to global economic crisis. This is true again, but giving excuses cannot bring any improvement. In contrast, the more severe the external problems, the more important is it to eliminate the barriers at home.
In fact, a recent survey shows that in the April-December, 2012 period, countries, such as China, Hong Kong, Philippines, Vietnam, Thailand and Mexico witnessed rise in their total exports while India suffered a 4.5% fall. Also, while our exports to Singapore, China, Hong Kong and Indonesia fell, global imports of each of these countries actually increased during the period. The study also states that US apparel imports from India in 2012 declined 8.4% against just 1.1% fall in US total apparel imports in the year. These facts signal internal shortcomings and the FTP should address this issue.
I invite you all to give your valuable feedback. Feel free to share with us what you want from the upcoming FTP.
Best wishes for a Happy Holi.
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Economy crisis
Mani | Mon Apr 8 12:54:35 2013
Present economy situation is purely due to poor planning which proven by many incidents. Instead of copying from US policy India ministers can go and learn from China for our country growth. "If there is a will there is a way" should be used for country growth and not to fill the pockets.
Make export earning income tax free
Vasu Sachdev | Wed Apr 3 09:20:23 2013
Earnings from export should be made income tax free. This single master stroke shall solve many problems of exporters.
Upcoming FTP
SANJEEV BIRLA, SURAT | Mon Apr 1 14:28:57 2013
Dear sir, enough of gloom over our bad shape of economy. The point is, what made it so bad, which is worsening day by day. Aint we, and our respected policy makers not responsible for every bit of it. As your article itself says that imports in southern Asia countries have improved and that there is no decline in imports made by USA. If thought in a broader scale, our country lost total track of our exports since sept-2011, may it be in slow phases, i.e since the DEPB incentive scheme was dumped, thereby dollar going out of control, thereby leading to higher import bills against crude imports, thereby imbalancing our cad(current a/c deficit), not to talk about the unemployment created in SME sector like textile and others. Our country can boast of good economy and reasonable GDP only if it were able to stabilize dollar to below Rs. 48 levels, and suggest a better way than a good export. Of course govt would be loosing on revenues by giving export incentives, but this surely be more than nullified by a stable dollar below Rs. 48, thereby controlling everything fm-gdp-to inflation-to stable ratings FM so called rating agencies ..thereby attracting more foreign funds,, which in turn would again contribute to bring th dollar down, bring inflation down, force Reserve Bank to bring interest rates down.... and the cycle moves on.... the solution is very much with us, but we are closing eyes and waiting for some kind of miracle fm almighty, it seems. Because of lack of space, I m not able to come up with more solutions.
EXPECTATIONS FROM NEW F.T.P.
AKRAM. A.G. | Fri Mar 29 06:31:12 2013
New foreign trade policy may be draft as below. no cash incentives to any product is to be given - in the form of duty drawback or any other form. Because, this type of incentives are disbursed from the customs offices by direct payments to the exporters account in the bank from the bank. This system has to be abolished. Instead of cash incentives, papers - FPS, FMS, MLFPS, VKUY, SHIS SFIS; etc., are to be issued from the commerce ministry - DGFT office. this type will take time up to six months - to disburse the same amount of incentive. apart from this, BRC. will be issued against the incentive paper to the DGFT office. There is genuineness of export payment realisation. Of course, this will be cross checked by the customs people when the papers are registered at the concerned port of registration. and a maximum number of exporters not aware of the system of getting these paper incentives from DGFT offices. Even, most of the people do not know what is DGFT, where it is available, what they are doing, how they are working, and more. a number of exporters did not avail the benefits from DGFT offices, as they do not know about this.
Price competitiveness
Na Raghu | Fri Mar 29 05:55:48 2013
I am marketing engineering good in South East Asia. What I find is India has lost the price competitiveness what we used to have it in the past. Often I come across products from Korea, Japan and parts of Europe are priced less than our products with better finish and quality. Their approach to customers are also friendly and clear. We have developed in complexity and lost price competitiveness which is really making our exports declining.
Analyze each sector
G K Srinivasan | Thu Mar 28 12:16:01 2013
Analyze each sector and this will give an idea of the weak sectors. Pharma exports continue to do well. Severe Power cuts have hampered the Textile and Engineering manufacturing sector. Subsidies for use of alternative costlier fuel have to be considered.
E-Marketing: a need of the hour
Rohit Talwar | Thu Mar 28 06:12:49 2013
Secret is simple: A coordinated effort to woo the foreign buyer/tourist.How?
If I was a foreign tourist, what would I do? Look at the internet to get a hotel booking, then buy a Book on travel and product linked literature.Get information on "Incredible India". Find out good restaurants or better still a guide to show me the way.
So what should India do? Link "Incredible India" website to hotel and restaurant database, sightseeing packaged tours,plane tickets through makemytrip.com and goibibo.com.
Same applies to potential importer.I want fashion jewellery, so I go to google.com and type out List of Fashion jewellery suppliers in Delhi, So a need to link All jewellery suppliers database (through their association),with google.com by paying fees
Contact : rohit_9nizeast@rediffmail.com
Excise duty should be lowered
NIRAJ R SHIRBHATE | Thu Mar 28 05:25:26 2013
Sea ways should be designed to connect all over the world sea ways.Vision should be broaden and instead of importing goods from China we must export the goods to China market and strike the Chinese market with better quality products and at lower prices than their prices.For that the excise duty should be lowered and other unwanted norms and documentation must be removed.More emphasis should be given on policies made for export and relaxation must be given to SMEs for export, in terms of tax.
Brass industry will suffer
Dhaval Shah | Thu Mar 28 05:22:20 2013
Ref : Notification No 68/2012 Dt : 31.12.2012 issued by Ministry of Finance in accordance with F.T.A signed by Ministry of Commerce on 01.01.2010.
M.S.M.E Sector of Brass Industries in India seeks the reversal of the economic harm inflicted by the above referred notification that has potential to lead to massive closure of Small and Medium enterprises.
Government has signed F.T.A with some Asian countries and some of its provisions has adverse effect on our Brass industries in India having more than 1000 small and medium enterprises.
Our members are importing various types of Copper, Brass and Zinc scraps as our raw material. At present we are paying 5 % customs duty on Import of raw material for our manufacturing industries. Now as per above notification, some of our finish products are falling under Lower rate or Zero rate of Import duty which is very harmful for our small & medium enterprises. This notification needs quick review since its implementation will lead to large number of closures leading to unemployment of over 50,000 workers. Our Government is always vigilant about consequences of F.T.A and has always re-examined such cases and taken necessary actions. We firmly believe that intention of our Government has never been to levy higher Import duty on import of raw material then import of finished goods. On the other hand our domestic manufacturers should get at least level playing field if not favor to combat overseas suppliers.
FTP Policy suggestions
Amish | Wed Mar 27 16:00:22 2013
For Better Export following steps must require.
1) Less paper work
2) Remove all undertaking in Excise for Manufacture
3) All Duty Draw back payment with in 10 day from Export shipment
4) Special DDB for SME
5) In Export Counicle complecery SME member in panel. suggestions.
FTP
Samuel | Wed Mar 27 15:01:12 2013
Establish Trade Alliances and Partners with credible African Traders
Operate Open Account System with credible African Traders
FOREIGN TRADE POLICY
SUDHANVA PATANKAR | Wed Mar 27 12:54:47 2013
If us$ are important to the country, the next budget shall reinstate major tax benefits to exporters. By chocking exporter diaspora country cannot earn huge $ surplus. The 3rd world war shall be won by those with huge deposit of water & dollar. Govt shall make exports very easy & imports very difficult. India can export large varieties of appropriate technology products for 1st, 2nd, 3rd & 4th world countries. The quality parameters for each world shall be separate and followed strictly. Special sops & attention shall be given to cottage industry, SSI, SME, & rural manufacturers. They shall get more benefits & concessions from GOI over the mega industries. Let poor Indian villagers start handling dollars. Only then we shall have global representation. let us reverse the centralized industries into the decentralized industry. The money power shall get decentralized making entire India vibrant. Why only " vibrant Gujarat!" Let us dream for "vibrant India"!!! if we choose vibrant government in the coming elections no one can stop us from becoming world leaders like 10000 years ago, with our unique ancient knowledge, culture & concept of "vishwa bandhootwa" & "krunwanto vishwam aaryan". jai hind! jay bharat!
India Exports Falling
Tim Judge / Purple Bomb llc | Wed Mar 27 12:46:26 2013
It is very very simple,
INDIA's wholesale pricing has risen
too high. Even Mexico is making very
much same products for much less than
India's vendors.
We import home decor and antique reproductions from Manila , Indonesia ,
Mexico and China
What about my staff and workers
Thomas | Wed Mar 27 11:24:01 2013
Why don't we all do nothing and import everything from China. This way no one has to do any work. At least the Europeans and Americans realized that China's currency is undervalued. When will Mr. Chidambaram realizes this and do something to minimize the job losses and decrease the trade deficit.
I am one of the affected Industry's MD. Although we survive the Chinese competition, I am not sure how long we can survive.
I really do not care. I can just sell the company to someone else and do something else. But what about my staff and workers?
Environment is important only!
Kailsh | Wed Mar 27 06:50:01 2013
What we are worrying about? About the fall of export in leather goods and textiles? why? it's really better for India to ban export of meat and leather goods as by this way we not only pollute our water resources and environment but also sell our water at much cheaper price---because cattle consumes too much water and butchers culture becomes strong. regarding textiles--only export those goods including textiles which do not spoil/pollute our rivers/water resources and consume minimum water. What is the use of wealth if we are not healthy or we spend all the income on medicines? Same applies on our environment.
Upcoming Foreign Trade Policy
Graham | Wed Mar 27 04:28:36 2013
It may be the opportune time to support exporters by financing them so that they can offer lease-cum-sale of expensive items to 1st. world economies. Suitable bank guarantees can be obtained from the lessee's foreign banks.
Export /Import
Nainesh Trivedi | Wed Mar 27 03:20:08 2013
Export should be responsibility of Commerce & Industry dept & Finance Ministry should not be held responsible. Also there should have been strong steps to reduce import & increase export by clearing certain myths about FEMA & FERA. It can be interpreted by authorities as suits them & not in the real spirit of law ending up in corruption. Also procedure to get excise free material for export is very complicated & requires some of the things which is not possible for small exporters with limited staff or no staff at all. I had to go to Sea port for about 10 times to change my Bank details as I don't have anyone working for me. Next time I may ask my client not to order me as it is not possible for me to run to sea port/customs dept. The touts took Rs.3000/- to get permission to export material worth Rs.1 lac what I will earn if I have to pay everywhere. I hope the procedure is made less complicated. The customs dept wants me to prove I have received all payments since 2002 & CA certificate was required. Who will certify for such thing after 10 years when we despose off documents after 8 years. Also Bank of Baroda is not financing any money for pre export purchases so we have to take money from private parties @3.5% interest per month.
FTP
Rob Groshe | Wed Mar 27 01:07:15 2013
Corruption - red tape and lazy government tenured workers - are a very easy target to fix export problems.
I can get a $10 item delivered to Australia from HK- including freight. India to Australia can be near $30 bribes- weeks of delay etc... what a joke Indian export has become !
Service Sector
Rahul | Tue Mar 26 10:09:10 2013
Why are we all forgetting, that in this crowd of manufacturers, there are Service Providers as well... who exist!! What is the FTP going to offer to the Service Providers?? They also need support.. in fact they need better schemes / incentives, as the existing ones like the Served from India Scheme is not serving good for all Service Providers...
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