This is the third time that the policy has been extended. The government had extended the FTP 2015-20 on March 31 last year till March 31, 2021 in the wake of the deadly virus outbreak. It was extended again by six months till September 30, 2021 and the new policy would have come into effect from October 1.
Exporters and industry stakeholders, however, are not so gung ho about the new announcement. Pushkar Mukewar, Co-Founder and CEO of trade finance company Drip Capital says that the industry was looking forward to the new FTP and regarded it as a much-needed change to get the ball rolling in post-pandemic recovery. "While Indian exports stagnated for a better part of the last decade, the Covid-19 pandemic further added to the exporters' woes. The new FTP would have promoted the ongoing export momentum. A well-formed policy could have created positive sentiments and helped India push way above the $400 billion exports goal for FY22," he said.
India's exports have been $185 billion during the April – September period, fuelling hope that the target of $400 billion for exports would be achievable in the current financial year. The FTP is a set of guidelines and instructions by DGFT pertaining to the import and export goods of India. Its aim has been to facilitate the growth in exports of goods and services in the country.
Mukewar feels that the export target for FY 22 may now be a struggle with the delay in the policy that has come to the fore. "With all the uncertainties and recent happenings like the semiconductor shortages, congestion at different ports worldwide, the latest virus variants and their consequences, rising prices of raw materials, etc., a robust FTP would have proved to be a solid backing to shield the trade community from further challenges," he added.
Container shortages and delay in shipments amid severe supply chain constraints have acted as major deterrents for exporters re-starting operations in a post pandemic world.
Other industry representatives are of the view that a status quo is better at this point in the aftermath of the Covid-19 outbreak which upended normal living. "It is only recently that the government has settled exporter claims and the RoDTEP rates. Bringing in a new FTP right now would have amounted to confusion," Ajay Sahai, DG & CEO, FIEO said.
The Centre had notified the RoDTEP rates on August 17 this year after missing numerous deadlines. But it had led exporters largely unhappy citing the low rates that had been notified in the various sectors.
Sahai added that the schemes within the new policy would have to meet the WTO compliances and hence the support measures would be limited. "By and large, they can provide rebates on taxes and duties only as WTO does not permit beyond that. There is no further scope to provide support on non- refund of duties and taxes," he stated.
Big ticket items, Sahai highlighted, such as using ecommerce to unfold the potential of exports, R&D and how India should take advantage of realignment of Global Value Chains can be looked at in the new policy.
Echoing similar sentiments, Vikas Singh Chauhan, Director, Home textile Exporters Welfare Association (HEWA) said such a decision will give time to both exporters and the government to study in detail the impact of many schemes and trade-related developments taken recently. "If the government would have brought any big policy change, then exporters would have no option but to again go back to the drawing room and start all the planning afresh – that too at multiple levels," he stated.
Chauhan said this in the context of the announcement of RoDTEP rates, the PLI scheme as well as the scheme to rebate all embedded State and Central Taxes/levies (RoSCTL) schemes which got extended for three years. In July, the Cabinet had approved the continuation of the RoSCTL scheme under which garment exporters would continue to get a rebate on central and state taxes on their outward shipments till March 2024.
Exports have been on an upward trajectory this year, showing a robust performance month-on-month since the start of the fiscal. What remains to be seen is whether this momentum is maintained and exports can be the proverbial saviour of the economy in a Covid-ravaged nation.
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