India unveils new Foreign Trade Policy to lift exports

New Delhi: With Prime Minister Narendra Modi's 'Make in India' campaign in the backdrop, India's new five-year Foreign Trade policy was unveiled on Wednesday.

Declaring that she wants to 'make India a significant factor in world trade by 2020, Commerce Minister Nirmala Sitharaman announced the foreign trade policy 2015-20.

She said mega regional agreements like the proposed Trans Pacific Partnership (TPP) Regional Comprehensive Economic Partnership (RCEP) will profoundly affect the country's future trade.

In its blueprint for enhancing exports, the government has merged all earlier export promotion schemes under the two plans - the Merchandise Exports from India Scheme (MEIS) and the Served from India scheme (SFIS) for services exporters.

The import duty exemption scrips valued at 10 percent of foreign exchange earned, which is given to service exporters as an incentive, have now been made tradeable and can be used for service tax, customs and excise duty payments.

'There is no conditionality in any of the scrips issued under these schemes, (MEIS, SEIS),' Sitharaman said.

Moreover, as a measure to boost the special economic zones (SEZs) units within them will now be able to avail the benefit of the MEIS and SEIS schemes.

The new policy has come at a time when India's merchandise exports continue to log a decent growth, having expanded by just 0.88 percent in the first 11 months of the current fiscal.

Declining for the straight third month, India's exports fell by over 15 percent to $21.54 billion in February, even as the trade deficit narrowed to $6.85 billion on the back of declining international crude oil prices.

The commerce minister unveils the country's Foreign Trade Policy for five years and a review is conducted annually. The previous policy was for 2009-2014, but neither was a new policy announced in 2014 nor a review conducted.