[UPSC Interview Prep Feed Vol.6] New Foreign Trade Policy 2015

Topics Discussed: New Foreign Trade Policy

As we are one of the most important facet of trade facilitation and the fact that this policy has come out just recently, this becomes all the more important for the forthcoming interviews. So instead of going through the bulky policy here are few important pointers...

1. Time Period-The time period of policy is 2015-2020.
2. Objectives-One of the basic objectives of the policy this time is the promotion of manufacturing and service exports and greater use of the Free Trade Agreements (FTAs). This goes in line with the these of "Make in India" and the promotion of the manufacturing sector which we apparently missed and jumped straight to the Services Sector.
3. Value Added imports-Another new feature this year is the promotion of "Value-Added Imports". Now this certainly is creating confusions all around but as per some news reports this again is a tool for reinforcing the manufacturing of final product in India. For clarity shall come later as it would transform into some scheme and subsequently we can update it here.
4. Key Sectors-The key sectors to be focused in Manufacturing Sector are - Engineering Products, Electronic Goods and Textile Exports. These are in fact the top sectors when it comes to exports of India.
5. Target-As of now, the quantum of export stands at $460 billion. The policy aims to almost double it to $900 Billion by the year 2020. The way the global economy is recovering and the way India is gearing up, this seems totally achievable.
6. Export Promotion Schemes-Coming to the schemes, earlier we had a bunch of schemes to mug for the exams but considering the frustration of civil service aspirants, the Govt. has clubbed them under two main schemes namely- Merchandise Exports from India Scheme (MEIS) and Service Exports from India Scheme (SEIS). MEIS subsumes Focus Market Scheme, Focus Product Scheme etc and SEIS is remodeled version of Served from India Scheme.
7. Duty Credit-The policy has also enhanced the concept of duty credit where in the duty credit scrips are now freely transferable and can be used for the payment of Customs Duty, Excise Duty and Service Tax. This is a great step in the direction of simplification of tax structure and it's integration. Till the much awaited GST comes, such beautiful innovations will help a lot.
8. Changes in EPCG: This policy directs the reduction of export obligation under the Export Promotion Control Goods (EPCG) up to 25%. This is to ensure the availability of products in the domestic market and at the same time to promote the import of Capital goods to India.
9. New Jargons: The policy also talks about "Branding Campaigns" to promote the local Indian products abroad. One of the major things that Indian products miss is the catchy packaging and global marketing. These campaigns will look to rectify that. The policy also talks of "Entrepreneurial Training Programs" under the umbrella of Skill India and Make In India.
10. Status Holders: The exporters who put through large quantities and help to Increase the exports from India big time, they must be recognized and given incentive. In this line, they will be categorized from One Star Export House to Five Star Export House depending upon the contribution made by them annually.
11. Rewards- Moreover the policy also talks of giving rewards for high level of domestic component in your export items thus promoting the local industries.

The Party is starting this Monday. Brace yourself! All the Best!