Exporters hail Rs 8450 crore incentive top-up — FTP review

Exporters hail Rs 8450 crore incentive top-up — FTP review

The mid-term review of India's Foreign Trade Policy (FTP) factoring in the impact of GST was unveiled by the government on Tuesday, granting additional Rs 8,450-crore incentives for exporters in yet another move to boost trade and create employment. He said the incentives are over and above the ones announced for the textile sector past year.

The incentive came as a part of the mid term review of India's Foreign Trade Policy (FTP) 2015-2020.

Earlier it was to be announced together with the implementation of the GST regime, but was postponed to take into account feedback from the export sector regarding the GST-related issues. To achieve Prime Minister Narendra Modi's vision of doubling farmers' incomes, FTP will have a focused policy for agricultural exports. Now it has extended the same sop to exports from other labour and MSME dominated sectors including gems and jewellery, leather and leather products, carpets and agriculture.

The revised FTP offers exporters, operating in the employment generating sectors, an increase of 2% in incentive under the Merchandise Export from India Scheme (MEIS) and Services Exports from India Scheme (SEIS) to boost exports and job creation.

The FTP's mid-term review is aimed at mid-course correction.

Incentives for goods exports are worth Rs. 4,567 crore while for services exports, it is Rs. 1,140 crore.

In April 201, the government had announced several incentives in the five-year FTP for exporters and units in the special economic zones (EPZs) to almost double India's exports of goods and services to $900 billion by 2020.

He said input tax credit (ITC) and Integrated-GST refunds for exporters are being expedited and explained in detail the process and procedure for refund of the claims for exporters.

Finance Secretary Hasmukh Adhia said that exporters would be the biggest beneficiaries of the GST and promised to remove obstacles soon. Along with a push to improving the logistics network, the government is hoping to address oft-repeated concerns over high cost of doing business in the country, which make exports less competitive in the global market.

He added that green shoots in export growth are distinctly visible now with positive export growth in 13 of the past 14 months. Today, it is paid before goods are removed from the ports which causes a lot of bottleneck at the port as goods are held up there.

Key sectors receiving the incentives are leather, agriculture, carpets, hand-tools, marine products, rubber products, ceramics, sports goods, medical and scientific products and electronic and telecom components. Exporters can import necessary inputs under duty-free scheme through self declaration instead of having to secure ratification from the Norms Committee that the raw materials will indeed be used in the manufacture of export items. Emphasis will be given on "Ease of Trading" across borders.

The government has also made a decision to open a logistics division in the commerce department to formulate and coordinate the implementation of an action plan for the integrated development of the logistics sector.

The issue of working capital blockage of exporters due to upfront payment of GST on inputs has been addressed by extending to them the benefit of sourcing inputs or capital goods from overseas as well as domestic suppliers without upfront GST payment.

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