Foreign trade policy extended by a year to help exporters tide over Covid-19 crisis

Our Bureau New Delhi | Updated on March 31, 2020 Published on March 31, 2020

Validity of all export incentive schemes, too, extended

The Centre has decided to extend the existing foreign trade policy (FTP) by a year to March 31, 2021, to ensure continuity of existing schemes for exporters and importers as they struggle to cope with business disruption due to the Covid-19 crisis.

“The existing FTP 2015-20, which is valid up to March 31, 2020, is extended up to March 31 2021. Various other changes are also made — extending the date of exemption by one year and extending validity of DFIA and EPCG authorisations for import purposes,” said a notification issued by the Directorate General of Foreign Trade (DGFT) on Tuesday.

This means that all existing incentive schemes, including the popular Merchandise Exports from India Scheme (MEIS) and the Export Promotion Capital Goods (EPCG) scheme, will get an extension of one year and not lapse.

“Initially, the government was looking at a six-month extension of the FTP. But after due discussions, it was decided that since the Covid-19 situation was still unfolding and it would also take time for the economy to be back in shape once the crisis is over, the extension should be for one year,” a government official told BusinessLine.

Exporters had been demanding for the extension of the FTP as they argued that they had no appetite for new schemes and policies with their production halted, consignments stuck at ports and payments delayed.

In a video conference held by Commerce and Industry Minister Piyush Goyal to get inputs on the current situation, export organisations also made a case for extension of all applicable deadlines and validities.

One big relief for exporters is the continuation of MEIS, which earns them cashable scrips against exports of identified items, and the EPCG scheme, under which capital goods for production of export goods can be imported duty-free.

WTO dispute

Although the World Trade Organization has ruled that both the schemes should be replaced as such sops are against multilateral rules, the Centre is now likely to take all the required time in doing so. MEIS will be gradually phased out and replaced with the new Remission of Duties and Taxes on Exported Products (RoDTEP) scheme, as per a Cabinet discussion, but rates will be fixed after due consultations with stakeholders.

India’s goods exports declined 1.5 per cent to $ 292.91 billion in April-February 2020 compared with year. Exports increased marginally in February 2020, but are expected to dip sharply this month because of the breakdown in production, supply and payments.

Published on March 31, 2020

A letter from the Editor

Dear Readers,

The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.

Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.

In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.

We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.

But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.

I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.

A little help from you can make a huge difference to the cause of quality journalism!

Support Quality Journalism
This article is closed for comments.
Please Email the Editor
You have read 1 out of 3 free articles for this week. For full access, please subscribe and get unlimited access to all sections.