RCA

The Union Minister of Commerce and Industry has released the New Foreign Trade Policy 2009-2014 (FTP) today. The FTP is cautiously optimistic in setting a target to double India’s export of goods & services by 2014.  It also sets out the long term policy objective to double India’s share in the global trade by 2020.

The objective is sought to be achieved through an array of measures including fiscal incentives, efforts for enhanced market access & diversification of export markets.  The policy recognises that the three most important enablers would be improvement in export related infrastructure, lowering of transaction costs and providing full refund of all indirect taxes and levies on exports in the proposed Goods and Services Tax.
To encourage value addition in manufactured exports, the policy stipulates a minimum 15% value addition norm on inputs imported under advance authorisation scheme.

Importance of technological up gradation in promoting exports is recognised by introducing two schemes, which will allow certain sectors and status holders to import capital goods duty free.

The new five year policy continues several promotional measures taken during the last policy period, provides additional support to recession hit sectors and rationalises the incentive schemes to ensure that the Indian exports remain globally competitive.

Source: Deloitte

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