India Urges Businesses to Leverage FTAs and Export Schemes for Increased Shipments

NEW DELHI: Govt has asked businesses to make use of the free trade agreements (FTAs) and schemes beyond interest subsidy, which are part of the Export Promotion Mission to boost shipments from the country.

Commerce and industry minister Piyush Goyal had met export promotion councils (EPCs) this week to take stock of the progress made towards meeting the targets set for them and also the medium-term strategy that they are adopting for sectoral exports.

There is significant emphasis from govt on ensuring significant utilisation of the benefits.

One of the concerns is that Indian industry, which has traditionally been domestic focused, may not have created adequate capacity in sectors, such as textiles, to take advantage of the duty concessions that are part of the FTAs.

For instance, the UK deal and the one with the European Union, which is likely to kick in from the year-end, will see tariffs being removed on several labour-intensive sectors, such as textiles and footwear, helping them compete with products from Bangladesh and other countries that enjoy zero tariffs.

Indian textiles units, including some of the biggest players, are too fragmented and often are seen to be lacking capacity to meet the demand.

Besides, most of them are concentrated on cotton.

Similarly, when it comes to Export Promotion Mission, EPC officials pointed out that domestic units have focused largely on using the benefits of interest subsidy, ignoring other elements, as some of them are too cumbersome to use or do not factor in the requirements of the industry.

The commerce department is keen to ensure that the funds allocated to the scheme are fully utilised, including for promotional activities and other facilities.

Govt is keen to ensure that Indian exports, goods and services, reach the $1 trillion mark this year, as against $860 billion last year given the 15%-plus growth seen during the first 10 weeks of the fiscal.

While a part of it is aided by higher commodity prices, especially crude, the Centre is expecting the FTAs to provide a boost.