TRADE POLICY -FORGOTTEN IN THE WINK OF AN EYE
By Ruma Dubey
Did you know that today the Commerce Minister presented a supplement to the trade policy? Better question – do you know the current commerce minister?
Well, the commerce minister, Mr. Anand Sharma released a supplement to the trade policy for 2009-2014. It is ironic that when the export figures show a slump and we are so stressed out about the mounting trade deficit, this important piece of news got no significance. Is everything which is about the economy only about the RBI and Finance Ministry?
We constantly talk about policy paralysis and there is this news today which did not even get a mention. There are no path breaking announcements but at the same time, given the turmoil world over, all eyes should have been on the Commerce Minister, seeing how he chalks out the path in these troubles times. Well, there were a few sparks but nothing major which is why the market ignored it.
The highlights of the supplement to the trade policy are listed below and there are few ‘extensions’ which should have ideally brought some more cheer to the markets today. But sadly, the trade policy was a damp squib, fizzled out like a fire cracker without any noise. Are we looking only at RBI and the Finance Minister and ignoring the rest?
ü Exports increased by 20% in FY12; aim to increase exports to $500 billion by 2014.
ü In FY12, identified 41 markets under special markets schemes and added 26 markets
ü 2% interest subvention on exports extended for handlooms, handicrafts, carpets and small and medium enterprises.; scheme to now include readymade garments, sports goods, processed agricultural products and toys.
ü Zero percent EPCG scheme extended to end of FY13.
ü New post-export EPCG scheme introduced, scope of zero duty EPCG scheme has been enlarged
ü No change in the coverage of sectors benefitting from the zero duty EPCG scheme
ü Duty on capital goods export scheme has been extended by one year
ü New guidelines for special economic zones to be issued soon
ü To increase focus on facilitating exports from north-east states
ü To set up common service centres in towns of export excellence to extend bank suppor and the new towns of export excellence are Ahmedabad, Kolhapur and Saharanpur.
ü Export obligation under EPCG reduced for wind turbines, solar cells.
ü Allows use of all scrips for payment of excise duty for domestic procurement; earlier only scrips from the Served From India Scheme were permitted
ü Allows export shipments from Delhi and Mumbai through post, courier or through e-commerce to be entitled for export benefits under foreign trade policy
ü Launches electronic issuance of bank export and realisation certificate to establish a seamless EDI connectivity among DGFT, banks and exporters
The data from the Trade Ministry’s website gives us the trade data: India’s trade deficit in April was at $13.48 billion which in March was at $13.9 billion. In April, imports rose 3.8% at $37.94 billion of which oil imports comprised $13.9 billion and balance, $24.03 billion was non-oil imports. So oil import continues to be the single largest item on the import bill - 37% in April.