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DAILY NEWS ANALYSIS

  • 16 June, 2020

  • 15 Min Read

Foreign Trade Policy 2015-2020 extended for 6 months till September 2021

Foreign Trade Policy 2015-2020 extended for 6 months till September 2021

  • The Union Commerce and Industry Ministry has announced changes in India’s Foreign Trade Policy (FTP). The Govt. has decided to continue relief under various export promotion schemes by granting an extension of the existing Policy.
  • It provided a framework for increasing exports of goods and services as well as generation of employment and increasing value addition in the country, in keeping with the “Make in India” vision of Prime Minister.
  • The focus of the new policy is to support both the manufacturing and services sectors, with a special emphasis on improving the ‘ease of doing business’.
  • It described the market and product strategy and measures required for trade promotion, infrastructure development and overall enhancement of the trade ecosystem.

Features of the FTP

  • Goods – Earlier there were 5 different schemes (Focus Product Scheme, Market Linked Focus Product Scheme, Focus Market Scheme, Agri. Infrastructure Incentive Scrip, VKGUY) for rewarding merchandise exports with different kinds of duty scrips with varying conditions attached to their use.
  • Duty-free scrips are paper authorisations that allow the holder to import inputs which are used to manufacture products that are exported, or to manufacture machinery used for producing such goods, without paying duty equivalent to the printed value of the scrip.
  • For instance, a duty-free scrip valued at Rupees 1 lakh allows the holder to import goods without paying duty of up to Rupees 1 lakh on the goods.
  • Under the new Foreign Trade Policy, all these schemes have been merged into a single scheme, namely the Merchandise Export from India Scheme (“MEIS“) and there is no conditionality attached to scrips issued under the MEIS.
  • Services – The Served From India Scheme has been replaced with the Service Exports from India Scheme (“SEIS“).
  • SEIS is stated to apply to ‘Service Providers located in India’ instead of ‘Indian Service Providers’.
  • Therefore, SEIS rewards to all service providers of notified services, who are providing services from India, regardless of the constitution or profile of the service provider.
  • Special Economic Zones – The policy outlines extended incentives for Special Economic Zones in India
  • Export Houses – The nomenclature of Export House, Star Export House, Trading House, Star Trading House, Premier Trading House certificate has been simplified and changed to One, Two, Three, Four and Five Star Export House.
  • Status Holders – Business leaders who have excelled in international trade and have successfully contributed to India’s foreign trade are proposed to be recognized as Status Holders and given special privileges to facilitate their trade transactions, in order to reduce their transaction costs and time.
  • Resolving Complaints – In an effort to resolve quality complaints and trade disputes between exporters and importers, a new chapter on Quality Complaints and Trade Disputes has been incorporated into the Foreign Trade Policy.
  • There would be no conditionality attached to any scrips issued under these schemes.
  • For grant of rewards under MEIS, the countries have been categorized into 3 Groups, whereas the rates of rewards under MEIS range from 2% to 5%.
  • Under SEIS the selected Services would be rewarded at the rates of 3% and 5%.

Foreign Trade Policy 2015-2020 extended for 6 months till September 2021

  • The Union Commerce and Industry Ministry today announced extension of the Foreign Trade Policy (FTP) of Government of India. The present Policy which came into force on 1st April 2015, was for 5 years and was extended thereafter upto 31st March, 2021.
  • In view of the unprecedented situation arising out of the pandemic Novel COVID-19, which is persisting, the Government has decided to continue benefits under various export promotion schemes by extending existing Foreign Trade Policy by another six months i.e. up to 30th September, 2021 which will provide continuity in the policy regime. Similar extension is made in the related procedures, by extending validity of HandBook of Procedures.

Source: PIB


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