The government has announced Rs 8,450 crore additional incentives to enhance the country’s exports. This move is expected to mainly benefit sectors such as textile and medium and small-scale enterprises (MSMEs) as it is these two sectors that was most affected post demonetisation and GST. Commerce and Industry Minister, Suresh Prabhu recently unveiled the mid-term review of the Foreign Trade Policy (FTP) 2015-20 with a view to boosting exports. Announcing the decisions he said the Merchandise Exports from India Scheme (MEIS) incentive rate would be raised by 2 per cent across the board for labour intensive and the MSME sectors. The Federation of Indian Export Organisations (FIEO) President, Ganesh Kumar Gupta, has suggested gradual extension of MEIS to other exports segments as they also were facing various challenging export issues.
Gupta urged a one-time relaxation to meet export obligations should be provided to the industry so that they can escape the penal provisions which will be disruptive and will provide an opportunity to enhance exports as well as provide employment. The increase in annual incentive by 34 per cent to Rs 8,450 crore will benefit the leather, handicraft, carpets, sports goods, agriculture, marine, electronic components and project exports.
The focus of FTP, he says, will be on exploring new markets and products as well as increasing India’s share in traditional markets and products. The key emphasis will also be on enhancing participation of the country’s industry in global and regional value chains.
The FTP will provide additional annual incentive of Rs 749 crore for the leather sector; Rs 921 crore for hand-made carpets of silk, handloom, coir and jute products; Rs 1,354 crore for agriculture products; Rs 759 crore for marine products; Rs 369 crore for telecom and electronic components; and Rs 193 crore for medical equipment. The five-year FTP set an ambitious target of the country’s goods and services exports at $ 900 billion by 2020. Its other aim is to enhance India's share of global exports from 2 per cent to 3.5 per cent. The Government did not accept garments exporters’ demand for measures, which improved market access and cost competitiveness.