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The Foreign Trade Policy (FTP) plans to make the existing export promotion schemes for services more effective and also introduce new ideas for giving greater thrust to the sector, said Commerce Secretary Rajeev Kher.
“We already have an export promotion scheme for services which we are trying to make more effective. We will also try to come up with some new ideas for the sector,” he said talking to reporters on the sidelines of the two-day services conclave, organised by the Commerce Ministry and CII.
The FTP will also try to give a fillip to start-ups. “The Commerce Ministry is aware that there are areas such as gaming and R&D which need some encouragement. Our effort in the FTP would be to provide incentives to niche sectors and start-ups,” said JS Deepak, Additional Secretary in the Commerce Ministry .
The Commerce Secretary, however, did not specify when the FTP could be expected. “I hope it is soon,” he said.
While the BJP Government announced the Union Budget in July, it is yet to come up with a new policy for exporters and importers.
Scrips schemeThe biggest concession that the services sector can hope for in the new FTP is transferability of import duty exemption scrips earned under the ‘Served from India’ scheme. At present, sectors such as hospitality, that earn substantial foreign exchange, are not able to use the scrips (valued at 10 per cent of foreign exchange earned) as these mostly don’t import capital goods for which the incentives can be used.
“If the services sector is allowed to sell the scrips to those who can use it, they can utilise the benefits of the scheme,” an official in the Commerce Ministry said.
The share of services in the country’s GDP was 57 per cent in 2013-14. Export of services during the year is estimated at $151.47 billion compared to goods exports worth $312.5 billion.
India is considered a mine for services delivery, yet its share in the global services exports is still below 3.5 per cent as against European Union’s 42 per cent and China’s over 4 per cent, Kher pointed out.
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