Covid-19: New Foreign Trade Policy on April 1 seems a difficult proposition now

Exporters are still in the dark over whether the government will go ahead with the scheduled announcement of the new Foreign Trade Policy (FTP) 2020-25 on April 1. Many are making a case for postponing the FTP due to the uncertainties unleashed by the Covid-19 pandemic and a shut-down of government offices was making discussions difficult.

A government official told, “Not only are exporters eager for an extension of the present FTP and announcements of some additional relief measures, it has also become logistically difficult to finalise a new FTP as the Commerce Ministry is mostly shutdown.”

The Commerce & Industry Ministry, however, has not yet made any official announcement on whether the new FTP will be unveiled on April 1 or delayed.

The EEPC stressed that amnesty should be granted for non-fulfilment of export obligation under the Export Promotion Capital Goods scheme and Advance Authorisation scheme due to the downturn in global trade cycle.

Special package

The Apparel Export Promotion Council has sought a special package for the apparel sector, including creation of a corpus fund for exporters, as it expects uncertainty to linger for at least next two months impacting shipments worth $1 billion that would affect 13 million direct workers and their families.

“There is no point in announcing a new FTP policy on April 1 if there is not much to be announced in terms of schemes and measures,” pointed out Ajay Sahai, Director-General, Federation of Indian Export Organisations (FIEO).

Sahai said since the government had already said that the popular Merchandise Export from India Scheme (MEIS) for exporters will be replaced with the new Remission of Duties and Taxes on Exported Products (RoDTEP) scheme in phases after sectoral discussions over the next few months, there was no need to announce a new FTP in a hurry.

Under the MEIS scheme, exporters are assured of a minimum incentive for their exports while there is no guarantee what the new RoDTEP scheme will have to offer as it still needs to be deliberated upon.

“It is better for the government to wait and have proper deliberations with the industry on special packages before finalising the FTP for the next five years. Because of the Covid-19 lockdown, all sectors have not been able to give their inputs,” said Anil Bhardwaj from the Federation of Micro, Small and Medium Enterprises.

India’s goods exports during April-February 2019-20 dipped 1.5 per cent to $292.91 billion compared to the same period last year, although exports increased 2.91 per cent to $27.65 billion in February 2020, for the first time in seven months.