The Hindu Business Line : ‘Foreign Trade Policy to focus on simplified procedures’

New Delhi, Jan. 26 The final year annual supplement to the Foreign Trade Policy (FTP) would have a simplified policy regime cutting out clutter of procedures for ensuring reduction in transaction cost to trade and industry. The policy, to be unveiled on March 31, would focus on laggard export segments and labour-intensive exports.

The Commerce Secretary, Mr Gopal K. Pillai, told Business Line that after the 2004-09 FTP, a lot of paper work for exporters in the form of complying with filing returns/vouchers/drawback duty/services tax has increased, even when the whole attempt was to decrease the drudgery of paperwork.

Complicated

He said that over the years because a few exporters did some hanky-panky, the authorities had to bring in additional amendments/rules as a precaution to prevent others from misusing the schemes. He further contended that the main foreign trade policy had become complicated over the years because of clarification/modification/amendments periodically undertaken so much so that the wheel has come full circle now to render the policy simple and procedures easier.

Mr Pillai cited the case of exporters importing machinery where before they claim anything out of it through the various export-incentive schemes, they must get installation certificate from the Excise Officer. While the excise officials have multiple tasks on hand, it is not fair to deny the exporters the benefit of using the machinery for export production till the visit of the excise officials. In such cases, self-certification would suffice since the exporters have imported the machinery and got the shipping bills etc. and is not going to run away. A lot of such avoidable hassles in other existing export-incentive schemes would be targeted in the forthcoming policy, he added.

Performance review

He further said that a review of the export performance during the current fiscal revealed that laggards in the export sector include leather, marine products, and textiles except readymade garments. Hence, the policy would have due fillip to pep up these labour-intensive segments.

Already, he said, the Prime Minister has asked the Krishnamoorthy Committee to suggest steps to halt the decline in manufacturing sector and come out with measures to increase industrial production. He said the Krishnamoorthy panel is holding its second meeting on January 28, and hoped that the Committee’s recommendations would be embedded in the budget to help manufacturer-exporters.

Asked about how the export segment was faring, Mr Pillai said that the latest figure on export growth during December2007 shows a robust increase of 21 per cent with overall export amounting to $120 billion during the first three-quarters of the current fiscal. He said that while gem and jewellery export did well initially, subsequently trading in diamond was the driver with manufacturing part of jewellery showing a substantial fall. He said engineering goods exports have been doing well, though within this segment some items were not faring well.

To a specific question about the last-mile hitch in wrapping up free trade agreement with Asean, Mr Pillai said that agreement has been reached on the contentious issues of tariff reduction and timeframe on palm oil, tea and coffee, though some other issues remain to be resolved. He refused to divulge details on the agreement. He said the first phase tariff reduction on agreed items would begin in 2009 once the India-Asean FTA is launched on the scheduled date of January 1, 2009.

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