The Indian government in its mid-term review of Foreign Trade Policy (FTP) 2015-20 has announced a slew of new measures will be boost trade facilitation and ease of doing business. Union Commerce and Industry Minister Suresh Prabhu said that mid-term review of FTP will leverage the long term advantages of GST in terms of reduced compliance and logistics costs.
Also the MEIS incentives for two sub-sectors of textiles - ready-made garments and made-ups - have already been increased to 4 per cent from 2 percent, with an additional annual incentive of Rs 2,743 crore.
Both the Apparel Export Promotion Council (AEPC) and The Southern India Millsâ€™ Association (SIMA) welcomes the changes and new measures announced at the mid term review of FTP.
The highlights of the mid term review of the FTP 2015-20 are the Incentives worth Rs 8,000 crore, focus on MSMEs, labour-intensive segments and agriculture sector. Also the extension of validity of duty free credit scrips from 18 months to 24 months along with the provision of zero GST on sale of scrips are surely going to help the industry in a big way, said AEPC chairman Ashok Rajani.
The other initiatives like the doing away with the testing of samples for drawback purpose and the introduction of e-sealing facility for exporters will lead to quick clearances of the consignment. This will not only help in easing the port congestion but will also aid in quick movement of the cargo. However, the exporters were hoping for measures which improve market access and cost competitiveness.
The mid-term review of FTP, released by the ministry of commerce and industry, has given thrust on ease of doing business, ease of trading across borders, exploring new export markets, new export products, simplification of procedures and processes and establishing National Trade Facilitation Committee headed by Cabinet Secretary to boost exports.
Also the support to Export Credit Guarantee Corporation will be enhanced to provide increased insurance cover to exporters particularly MSMEs exploring new or difficult markets.
SIMA chairman P Nataraj has also appreciated the formation of National Trade Facilitation Committee (NTFC) under Cabinet Secretary to focus on transparency, technology, simplification of procedures, infrastructure augmentation, etc. In a press release, he said that the 24x7 customs clearance extended to 19 sea ports and 17 air cargo complexes would help exporters.
He hopes that the Government would soon announce the enhanced duty drawback rates for all textiles taking into account all the embedded/blocked levies and enable the exporters to continue to have the level of export competitiveness that they had under pre-GST era.
Natraj stated that the Government could have considered the industryâ€™s demand of GST free domestic procurement against EPCG and Advance Authorization Scheme to boost exports under mid-term review.
However, the Government is yet to consider the long pending demand of including cotton yarn exports under MEIS and IES schemes and also to consider fabric exports under RoSLâ€”that are essential to utilize the highly capital and labour intensive surplus production capacities in the spinning, weaving, knitting and processing segments.
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