The Hindu Business Line : Exim Policy to become Foreign Trade Policy

THE nomenclature of the modified Exim Policy is being changed to Foreign Trade Policy (FTP) by the UPA Government in order to enable the country to emerge as a manufacturing and services export hub in the coming years.

Official sources told Business Line that the Union Commerce and Industry Minister, Mr Kamal Nath, would explain the rationale behind the new appellation in August.

As Parliament goes for recess after July 23 and reconvenes on August 16, the new FTP would be unfurled sometime before August 14.

The policy is anchored to reflect the priorities of the Government and the National Common Minimum Programme (NCMP) at boosting exports including agricultural exports and creating additional exports.

Though the current Exim Policy is for a five-year period (2002-07), the new policy might be cast for five years up to the year 2009 so as to be coterminous with the new UPA Government, they said.

The sources denied the formation of any advisory group as yet to prepare an export-friendly set of policy measures, but said that the new policy would definitely focus on thrust areas such as textile, leather, gems and jewellery, handicraft, handloom, and agriculture.

Moreover, the proposed FTP would have some special benefits for 100 per cent export-oriented units and units located in SEZs.

A Central legislation for SEZs is on the cards, bringing under one umbrella a congeries of benefits to the units functioning in these zones, the sources said. As the Directorate-General of Foreign Trade (DGFT) is the main interface between the exporters and the Government, proposals are under way to revamp the machinery to redress public grievances in the DGFT in order to reduce the transaction cost to trade and industry. Exporters who by and large felt bypassed by the Union Budget 2004-05 presented by the Finance Minister, Mr P. Chidambaram, are now fervently looking to the changes being proposed in the new FTP by Mr Kamal Nath. They expect it would help them in overcoming the high transaction cost and erosion of export profit margins and lack of fiscal sops in the form of tax exemptions on export turnover.

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