ftp: Industry Could Find $ 400 Billion In Exports Target Struggle With Extended FTP Through March 2022
This is the third time that the policy has been extended. The government had extended the 2015-20 FTP on March 31 of last year until March 31, 2021 following the deadly virus outbreak. It was again extended for six months until September 30, 2021 and the new policy is said to take effect on October 1.
Exporters and industry stakeholders, however, are not so enthusiastic about the new announcement. Pushkar Mukewar, co-founder and CEO of trade finance firm Drip Capital, said the industry looks forward to the new FTP and sees it as a necessary change to kickstart the post-pandemic recovery process. “While Indian exports have stagnated for much of the past decade, the Covid-19 pandemic has further exacerbated the difficulties for exporters. The new FTP would have favored the current export dynamic. A well-formed policy could have created positive feelings and helped India surpass the export target of $ 400 billion for fiscal 22, ”he said.
India’s exports amounted to $ 185 billion between April and September, fueling hopes that the $ 400 billion target for exports would be achievable in the current fiscal year. The FTP is a set of guidelines and instructions of the DGFT regarding the import and export goods from India. Its objective was to facilitate the growth of exports of goods and services in the country.
Mukewar believes that the export target for FY 22 may now be a struggle with the policy delay that has arisen. “With all the uncertainties and recent events like semiconductor shortages, congestion in various ports around the world, the latest virus variants and their consequences, rising commodity prices, etc., a robust FTP would have been in place. proved to be a strong support to protect the business community from new challenges, ”he added.
Container shortages and delays in shipments amid severe supply chain constraints have had a major deterrent effect on resuming exporters’ operations in a post-pandemic world.
Other industry representatives believe that a status quo is better at this point in the aftermath of the Covid-19 epidemic that has disrupted normal life. “It was only recently that the government settled exporters’ complaints and RoDTEP tariffs. Introducing a new FTP now would have been confusing, ”said Ajay Sahai, CEO and CEO of FIEO.
The Center notified the RoDTEP tariffs on August 17 after missing numerous deadlines. But this had led exporters largely unhappy, citing the low rates that had been notified in different sectors.
Sahai added that the programs within the new policy would have to conform to WTO standards and therefore support measures would be limited. “Overall, they can only give discounts on taxes and duties beyond what the WTO does not allow. There is no longer any possibility of providing support on the non-reimbursement of duties and taxes, ”he said.
Important elements, Sahai pointed out, such as the use of e-commerce to unleash the potential of exports, R&D and how India should benefit from the realignment of global value chains can be examined in the new policy.
Echoing similar sentiments, Vikas Singh Chauhan, director of the Home Textile Exporters Welfare Association (HEWA), said such a move would give exporters and the government time to study in detail the impact of many programs and recently adopted trade-related developments. “If the government had made a big policy change then exporters would have no choice but to go back to the show again and start all the planning all over again – this too on many levels,” he said. .
Chauhan said this in the context of the announcement of the RoDTEP rates, the PLI scheme as well as the reimbursement scheme for all integrated national and central tax / levy schemes (RoSCTL) which have been extended for three years. In July, Cabinet approved the continuation of the RoSCTL program under which apparel exporters would continue to receive a rebate on central and state taxes on their overseas shipments until March 2024.
Exports have followed an upward trajectory this year, posting a strong month-on-month performance since the start of the year. It remains to be seen whether this momentum is sustained and whether exports can be the proverbial savior of the economy in a country ravaged by Covid.
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