Foreign Trade Policy 2015–2020 Two New Schemes – “Merchandise Exports From India Scheme” And “Services Exports From India Scheme” Introduced

The much await­ed For­eign Trade Pol­i­cy 2015–20 was unveiled today by Min­is­ter of Com­merce & Indus­try Mrs. Nir­mala Sithara­man, at Vigyan Bhawan. The new five year For­eign Trade Pol­i­cy, 2015–20 pro­vides a frame­work for increas­ing exports of goods and ser­vices as well as gen­er­a­tion of employ­ment and increas­ing val­ue addi­tion in the coun­try, in keep­ing with the “Make in India” vision of Prime Min­is­ter.  The focus of the new pol­i­cy is to sup­port both the man­u­fac­tur­ing and ser­vices sec­tors, with a spe­cial empha­sis on improv­ing the ‘ease of doing business’.

Dur­ing her address Mrs. Sithara­man stat­ed that there were var­i­ous forces shap­ing India and its equa­tion with the rest of the world.  She urged the Gov­ern­ment and indus­try to work in tan­dem to deal with the chal­lenges posed.

The release of For­eign Trade Pol­i­cy was also accom­pa­nied by a FTP State­ment explain­ing the vision, goals and objec­tives under­pin­ning Indi­a’s For­eign Trade Pol­i­cy, lay­ing down a road map for India’s glob­al trade engage­ment in the com­ing years.  The FTP State­ment describes the mar­ket and prod­uct strat­e­gy and mea­sures required for trade pro­mo­tion, infra­struc­ture devel­op­ment and over­all enhance­ment of the trade eco sys­tem. It seeks to enable India to respond to the chal­lenges of the exter­nal envi­ron­ment, keep­ing in step with a rapid­ly evolv­ing inter­na­tion­al trad­ing archi­tec­ture and make trade a major con­trib­u­tor to the country’s eco­nom­ic growth and devel­op­ment.  She promised to have reg­u­lar inter­ac­tions with all stake­hold­ers, includ­ing State Gov­ern­ments to achieve the nation­al objectives.

FTP2015-20. intro­duces two new schemes, name­ly “Mer­chan­dise Exports from India Scheme (MEIS)” for export of spec­i­fied goods to spec­i­fied mar­kets and “Ser­vices Exports from India Scheme (SEIS)” for increas­ing exports of noti­fied ser­vices, in place of a pletho­ra of schemes ear­li­er, with dif­fer­ent con­di­tions for eli­gi­bil­i­ty and usage.  There would be no con­di­tion­al­i­ty attached to any scrips issued under these schemes.  Duty cred­it scrips issued under MEIS and SEIS and the goods import­ed against these scrips are ful­ly trans­fer­able. For grant of rewards under MEIS, the coun­tries have been cat­e­go­rized into 3 Groups, where­as the rates of rewards under MEIS range from 2% to 5%. Under SEIS the select­ed Ser­vices would be reward­ed at the rates of 3% and 5%.

Mea­sures have been adopt­ed to nudge pro­cure­ment of cap­i­tal goods from indige­nous man­u­fac­tur­ers under the EPCG scheme by reduc­ing spe­cif­ic export oblig­a­tion to 75% of the nor­mal export oblig­a­tion. This will pro­mote the domes­tic cap­i­tal goods man­u­fac­tur­ing indus­try.  Such flex­i­bil­i­ties will help exporters to devel­op their pro­duc­tive capac­i­ties for both local and glob­al con­sump­tion.  Mea­sures have been tak­en to give a boost to exports of defense and hi-tech items.  At the same time e‑Commerce exports of hand­loom prod­ucts, books/periodicals, leather footwear, toys and cus­tomized fash­ion gar­ments through couri­er or for­eign post office would also be able to get ben­e­fit of MEIS (for val­ues upto 25,000 INR).  These mea­sures would not only cap­i­tal­ize on Indi­a’s strength in these areas and increase exports but also pro­vide employment.

Com­merce Min­is­ter stat­ed that although exports from SEZs had seen phe­nom­e­nal growth, sig­nif­i­cant­ly high­er than the over­all export growth of the coun­try, in recent times they had been fac­ing sev­er­al chal­lenges.  In order to give a boost to exports from SEZs, gov­ern­ment has now decid­ed to extend ben­e­fits of both the reward schemes (MEIS and SEIS) to units locat­ed in SEZs.  It is hoped that this mea­sure will give a new impe­tus to devel­op­ment and growth of SEZs in the country.

Trade facil­i­ta­tion and enhanc­ing the ease of doing busi­ness are the oth­er major focus areas in this new FTP. One of the major objec­tive of new FTP  is  to move towards paper­less work­ing in 24x7 envi­ron­ment.  Recent­ly, the gov­ern­ment has reduced the num­ber of manda­to­ry doc­u­ments required for exports and imports to three, which is com­pa­ra­ble with inter­na­tion­al bench­marks.  Now, a facil­i­ty has been cre­at­ed to upload doc­u­ments in exporter/importer pro­file and the exporters will not be required to sub­mit doc­u­ments repeat­ed­ly.  Atten­tion has also been paid to sim­pli­fy var­i­ous ‘Aay­at Niry­at’ Forms, bring­ing in clar­i­ty in dif­fer­ent pro­vi­sions, remov­ing ambi­gu­i­ties and enhanc­ing elec­tron­ic governance.

Man­u­fac­tur­ers, who are also sta­tus hold­ers, will now be enabled to self cer­ti­fy their man­u­fac­tured goods in phas­es, as orig­i­nat­ing from India with a view to qual­i­fy­ing for pref­er­en­tial treat­ment under var­i­ous forms of bilat­er­al and region­al trade agree­ments.  This “Approved Exporter Sys­tem” will help these man­u­fac­tur­er exporters con­sid­er­ably in get­ting fast access to inter­na­tion­al markets.

A num­ber of steps have been tak­en for encour­ag­ing man­u­fac­tur­ing and exports under 100% EOU/EHTP/STPI/BTP Schemes.  The steps include a fast track clear­ance facil­i­ty for these units, per­mit­ting them to share infra­struc­ture facil­i­ties, per­mit­ting inter unit trans­fer of goods and ser­vices, per­mit­ting them to set up ware­hous­es near the port of export and to use duty free equip­ment for train­ing purposes.

Con­sid­er­ing the strate­gic sig­nif­i­cance of small and medi­um scale enter­prise in the man­u­fac­tur­ing sec­tor and in employ­ment gen­er­a­tion, ‘MSME clus­ters’ 108 have been iden­ti­fied for focused inter­ven­tions to boost exports. Accord­ing­ly, ‘Niry­at Band­hu Scheme’ has been gal­va­nized and repo­si­tioned to achieve the objec­tives of ‘Skill India’.  Out­reach activ­i­ties will be orga­nized in a struc­tured way at these clus­ters with the help of EPCs and oth­er will­ing “Indus­try Part­ners” and “Knowl­edge Partners”.