Export Performance by India

The Honble Minister of Commerce and Industry Mr. Piyush Goyal in his Lok Sabha Speech on Tuesday has given a written reply on the Export performance by India. In his statement he has mentioned that India’s merchandise exports has increased from 303.53 US $ billion in 2017-18 to 330.07 US $ billion in 2018-19, registering a positive growth of 8.75%. In his detailed statement, the Minister has provided detailed information on the various schemes introduced by the Govt since 2015 to promote exports.

India’s export sector faced many challenges post 2013-14 period due to accentuation of the global economic / financial crisis. However, exports have been growing on a secular basis since 2016-17 for almost three years and total exports reached a new peak of more than half a trillion dollars for the first time in 2018-19. The sector-wise values of exports for 2018-19 and percentage change over the previous year 2017-18 are given at Annexure. The Foreign Trade Policy (2015-20), launched on 1 April 2015, provides a framework for increasing exports of goods and services as well as generation of employment and increasing value addition in the country, in line with the ‘Make in India’, ‘Digital India’, ‘Skill India’, ‘Startup India’ and ‘Ease of Doing Business’ initiatives.

Representations/suggestions are received from trade organizations/export promotion councils from time to time for promotion of exports which are taken into consideration as part of the regular ongoing process of review and reform of trade policies.

Schemes introduced and the measures taken in the export policy to promote export:

i. The Foreign Trade Policy (2015-20), inter alia, 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 were made fully transferable.

ii. A Mid-term Review of the FTP 2015-20 was undertaken in December, 2017 under which incentives for labour intensive / MSME sectors were increased by 2% under MEIS.

iii. A new Logistics Division was created in the Department of Commerce for integrated development of the logistics sector. India’s rank in World Bank’s Logistics Performance Index was moved up from 54 in 2014 to 44 in 2018.

iv. Interest Equalization Scheme on pre and post shipment rupee export credit was introduced from 01.04.2015 providing interest equalisation at 3% for labour intensive / MSME sectors. The rate was increased to 5% for MSME sectors with effect from 02.11.2018 and merchant exporters were covered under the Scheme with effect from 02.01.2019.

v. Measures to increase procurement of capital goods from indigenous manufacturers under the Export Promotion Capital Goods (EPCG) scheme by reducing specific export obligation from 90 percent to 75 percent of the normal export obligation.

vi. Issue of Advance Authorisation to allow duty free import of inputs for export product within a specified timeline.

vii. For improving ease of doing business, online issuance of Importer Exporter Codes (IEC) has been started. India’s rank in World Bank ‘Ease of Doing Business’ ranking was improved from 142 in 2014 to 63 in 2019 with the rank in ‘trading across borders’ moving up from 122 to 80.

viii. A new scheme called “Trade Infrastructure for Export Scheme (TIES)” was launched with effect from 1st April 2017 to address the export infrastructure gaps in the country.

ix. A new scheme called Scheme for Rebate of State and Central Taxes and Levies (RoSCTL) covering export of garments and made-ups was notified on 7.3.2019 providing refund of duties/taxes at higher rates.

x. A comprehensive “Agriculture Export Policy” was launched on 6th December, 2018 with an aim to double farmers’ income by 2022 and provide an impetus to agricultural exports.

xi. A new scheme called “Transport and Marketing Assistance” (TMA) has been launched for mitigating disadvantage of higher cost of transportation for export of specified agriculture products.

xii. Government has introduced a new Scheme for Remission of Duties and Taxes on Exported Products (RoDTEP) on 13-03-2020 for re-imbursement of taxes/ duties/levies, which are currently not being refunded under any other mechanism, at the central, state and local level.

Annexure

India’s Merchandise Export, sector-wise for 2017-18 and 2018-19

While the schemes introduced by the Govt intend to accelerate growth for Export industry, the outcome of the same would be understood on the reports published in Economic Survey.

The World Bank’s ease of doing business Report 2020 shows India jumping to 63^rd position from 77^th among 190 countries.

While the above achievement is a welcome one, the country still lags in areas such as enforcing contracts (163rd) and registering property (154th). It takes 58 days and costs on average 7.8% of a property’s value to register it, longer and at greater cost than among OECD high-income economies. And it takes 1,445 days for a company to resolve a commercial dispute through a local first-instance court, almost three times the average time in OECD high-income economies.

Also, it must be noted that due to the global challenges in handling the pandemic situation that we are currently facing on account of Covid-19, the Global economy is tumbling in the last quarter of current Fiscal Year and hence we need to wait and watch on the final results that would highly impact the above statistics. While the Trade and Industry strongly pleads for new incentives to compensate the epidemic situation at both domestic and International market, we need to combat the uncharted situation economically as well.

Similar to its upright performance in Ease of Doing business, let’s hope the land proves to be of Ease of handling pandemic situations as well!