MSMEs get 2% increase from FTP review
Minister stresses on quality standards
The Mid-Tem Review of Foreign Trade Policy (FTP) 2015-2020 has increased Annual Incentives by 2 percent amounting to over Rs.8,000 crore for labour intensive micro, small and medium enterprise (MSME) sectors.
Releasing the report, Commerce and Industry Minister Suresh Prabhu
said that the FTP will leverage the long-term advantages of the Goods and Services Tax (GST), in terms of reduced compliance and logistics costs.
The FTP will focus on exports from labour intensive and MSME sectors by way of increased incentives in order to increase employment opportunities.
Emphasis will be given on ‘Ease of Trading’ across borders.
Information based policy interventions will be ensured through a State-of-the-Art Trade Analytics Division. While share in traditional products and markets will be maintained, the focus will be on new products and new markets.
The Minister focused on transparency and trust with the industry and maintenance of Quality Standards to succeed in the international market.
Among the detailed highlights are:
The issue of working capital blockage due to GST has also been resolved while agricultural product exports will be encouraged to boost farmers’ incomes.
Exports have grown at a CAGR of 8 percent over the past 10 years which is fairly creditable.
The government recognizes the necessity of handholding for Medium and Small-scale industries.
The biggest challenge, however, is to address constraints within the country, such as infrastructure bottlenecks, high transaction costs, complex procedures, constraints in manufacturing and inadequate diversification in services.
Export incentives under Merchandise Exports from India (MEIS) have been increased by 2 percent across the board for labour intensive MSME sectors leading to additional annual incentive of Rs.4,567 crore.
This is in addition to the already announced increase in MEIS incentives from 2 percent to 4 percent for Ready-made Garments and Made Ups in the labour intensive Textiles Sector with an additional annual incentive of Rs.2,743 crore.
Further, incentives under Services Exports from India Scheme (SEIS) have also been increases by 2% percent leading to additional annual incentive of Rs.1,140 crore.
Thus, incentives under the two schemes have been increased by 33.8 percent (Rs.8,450 crore) from the existing incentives of Rs.25,000 crore leading to boost in exports from the labour intensive sectors and increased employment opportunities.
Some of the major sectors benefited are as under:
Rs.2,743 crore for Ready-made Garments and Made Ups in Textiles Sector;
Rs.749 crore for Leather and Footwear Articles;
Rs.921 crore for handmade carpets of silk, handloom and coir and Jute products;
Rs.1,354 crore for Agriculture and related products;
Rs.1,140 crore for Services including Hotel & Restaurant, Hospital, Educational services etc;
Rs.759 crore for Marine products;
Rs.369 crore for Telecom and Electronics Components;
Rs.193 crore for Medical and Surgical Equipment.
Further, the validity period of Duty Credit Scrips has been increased from 18 to 24 months and GST rates on transfer/sale of scrips has been reduced to zero.
Issue of Gold availability for exporters has been resolved by allowing Specified Nominated Agencies to import Gold without payment of Integrated GST.
Support to Export Credit Guarantee Corporation is also being enhanced to increase insurance cover to exporters particularly MSME’s exploring new or difficult markets.
A new scheme of Self-Assessment based duty-free procurement of inputs required for exports has been introduced. There will be no need of Standard Input Output Norms in such cases and this will eliminate delays. It is based on trust.
Exporters will self-certify the requirement of duty free raw materials/ inputs. The scheme would initially be available to the Authorized
A new Logistics Division has been created in the Department of Commerce to develop and co-ordinate integrated development of the logistics sector, by way of policy changes, improvement in existing procedures, identification of bottlenecks and gaps, and introduction of technology based interventions in this sector.
These steps would improve India’s ranking in the Logistics Performance Index (LPI) and promote exports and enhanced growth.
Focus will be given to Ease of Trading across borders.
A professional team to handhold, assist and support exporters in their export related problems, accessing export market and meeting regulatory requirements.
The team will also examine the procedures and processes in clearances related to trading across borders for their simplification and rationalization and track progress.
Dwell time at ICDs, ports and airports is being closely monitored in coordination with Customs, and infrastructure Ministries. fii-news.com