India Govt actively taking steps to boost export

The Government of India has been taking proactive measures to boost the nation’s export. India’s overall exports – merchandise and services combined – for the 10 months from April 2019 to January 2020 was estimated at US$446.5 billion, marking a growth of 1.9 per cent over last year. The growth in India’s exports amid continuing global trade uncertainties as well as a cyclical downturn in the domestic economy has reinforced confidence in the Indian market. Easing of restrictions on cross-border trade and foreign investment as well as a rapidly-growing local consumer base have further driven up India’s exports.  

The Government’s export promotion policies have also enabled refund of duties and taxes levied on inputs used in the production of export products, reduction of cost disability through the provision of incentives to specified products, and improvement in all-round ease of doing business. The overall thrust has been on enhancing competitiveness and growth in exports of all product groups across all destinations. This led to products from 168 principal commodity groups getting exported to 233 countries during 2018-19. India’s export basket has steadily grown to include high-margin, next-gen technology enable products.

Exports from India are also being made competitive with improving usage of Free Trade Agreements, affordable credit, exporter friendly schemes, export hubs, and a growing network of logistics and transport infrastructure. To boost India’s exports, the Government has taken the following steps:

1. A new Foreign Trade Policy (FTP) 2015-20 has rationalised the earlier export promotion schemes and introduced two new schemes, namely Merchandise Exports from India Scheme (MEIS) for improving export of goods and Services Exports from India Scheme (SEIS) for increasing exports of services. Duty credit scrips issued under these schemes have been made transferable.
2. Based on the Mid-term Review of the FTP 2015-20 undertaken in December 2017, incentives for labour-intensive and MSME sectors were increased by 2 per cent.
3. A new Logistics Division was created in the Department of Commerce for the integrated development of the logistics sector. India’s rank in World Bank’s Logistics Performance Index moved up from 54 in 2014 to 44 in 2018.
4. Interest Equalization Scheme on pre and post-shipment rupee export credit was introduced in April 2015 providing interest equalisation at 3 per cent for labour intensive and MSME sectors. The rate was increased to 5 per cent for MSME sectors with effect from November 2018 and merchant exporters were covered under the scheme with effect from 2019.
5. For improving the ease of doing business, online issuance of Importer Exporter Codes (IEC) has been introduced. India’s rank in World Bank ‘Ease of Doing Business’ ranking improved from 142 in 2014 to 63 in 2019 with the rank in ‘trading across borders’ moving up from 122 to 80.
6. A new scheme called “Trade Infrastructure for Export Scheme (TIES)” was launched with effect from April 2017 to address the export infrastructure gaps in the country.
7. A comprehensive “Agriculture Export Policy” was launched in December 2018 to double farmers’ income by 2022 and provide an impetus to agricultural exports.
8. A new scheme called “Transport and Marketing Assistance” (TMA) has been launched for mitigating the disadvantage of a higher cost of transportation for the export of specified agriculture products.

In 2018, the Government had adopted a strategy for doubling exports by 2025. Besides aiding economic growth, rising exports have helped in generating jobs and bolstering foreign exchange reserves. India’s export industry will also contribute considerably to the building of a US$5-trillion economy.