Positive Trade Balance for Service Exports

Timelines for completion of activities relating to SEZs developers and units - prescribed and implemented

Procedural simplification measures initiated in DGFT

Nirmala Sitharaman addresses media persons at PIB National Media Centre

Background  

• The year 2013-14 was in many ways a year full of challenges and opportunities. A series of international events including the impact of Euro Zone Crisis and the global slowdown had a major impact on our economy and exports.
• While the global environment still remains challenging, policy action in India has been repositioned so as to better tackle the negative impact of external shocks.
• The growth momentum and export competitiveness has picked up as government has instilled greater confidence among businesses. The improved outlook and pro-active policy environment will help boost exports and bring India on the trajectory of greater economic growth.
• During year 2013-14, total value of exports was US $ 465.90 billion with Merchandise and Services Exports comprising of US$ 314.40 billion and US $ 151.5 billion respectively.  The target for total exports for year 2014-15, is US $ 500 billion with Merchandise and Services Exports expected to be US $ 340 billion and US $ 160 billion respectively.
• As per the current rankings, India is the 19^th largest exporter (with a share of 1.7%) and 12^th largest importer (with a share of 2.5%) of merchandise trade in the world. In Commercial Services, India is the 6^th largest exporter (with a share of 3.3%) and 7^th largest importer (with a share of 2.9%).
•  India’s share in world trade (Merchandise and Services) has increased from 1.77% in 2008 to 2.27% in 2013. Our goal is to raise this to 3.5% by 2018-19.

Key initiatives taken are:

1. Foreign Trade Policy (FTP)

The New Foreign Trade Policy (FTP) (2014-19) is on the anvil, which would include strategy, goals, road maps and time frame for increasing exports. This would be comprehensive and composite, focussing on: products which are winners and potential winners, targeted global engagements, branding and packaging measures etc.

2. Trade Promotion and Reforms  

• Reduction in transaction costs through initiatives for simplification of documents and procedures

Re-alignment, redrafting and synchronisation of paragraphs in all Chapters of FTP/HBP to bring in more clarity, rationalize the number in Schemes (Chapter-3) and to ensure that provisions are placed in an orderly manner.  Number of columns in Application forms for various schemes is being reduced to the minimum.

• Digitization of various processes

(i) Procedural simplification and on-line inter-ministerial consultation

In order to simplify the various procedures, it has been proposed to do inter-ministerial consultations online where exporters can file their applications on the DGFT website.  This will reduce the transaction cost and transaction time and also bring transparency in the system.

(ii) Discontinuation of printing of all authorisation and EODC – Moving towards paperless work

DGFT has proposed not to issue any authorisations in physical form and would like to issue authorisations under duty exemption, EPCG Schemes and scrips in an electronic form.  This will make a paperless transaction a reality.  We are working with CBEC to take this initiative forward.

• Specific measures to facilitate the entry of new entrepreneurs and manufacturers in global trade by providing them the required training

Capacity Building of new entrepreneurs to become exporters:

       As part of the capacity building of new entrepreneurs `You tube’ channel of DGFT had been launched recently in respect of the following activities:

Action already completed

(a)    How to obtain an IEC number

(b)    How to view/print e-BRC

Action proposed to be taken

(a)   Online Training Programme for new entrepreneurs.

(b)  How to apply for Certificate of Origin- Non-preferential/preferential

(c)    How to file Shipping Bill for exports

(d)  How to apply for RCMC

(e)  How to file Bill of Entry for imports

(f)    How to pay fee/Duty by e-challan

(g)  How to file Application for Authorisation under Chapter 3, 4 and 5 of FTP.

• Better (Electronic Data Interface) EDI connectivity in the ports etc. 

Exports: In 2013-14(P), 65.2% of the total value of trade is through EDI, 34.4% is through Non-EDI and 0.42% is through Manual as compared to 58.2% through EDI, 30.09% through Non-EDI and 11.7% through Manual in 2009-10. 

Imports: In 2013-14(P), 72.41% of the total value of trade is through EDI, 27.3% is through Non-EDI and 0.26% is through Manual as compared to 65.8% through EDI, 12.5% through Non-EDI and 21.8% through Manual in 2009-10 

3. India’s Strong Stand in the WTO

India has taken a leadership role to:

• Rectify the imbalance in the Bali package implementation process and prevent the development being subverted again. Stand taken by India includes reiteration of the position that India is committed to all the Bali Decisions including Trade facilitation. However, for a balanced Bali outcome, WTO must deliver on the other Bali Decisions, including the Decision on public stockholding for food security purposes in a time bound manner.
• Ensure a permanent solution on public stockholding for food security to correct a longstanding injustice in WTO rules. India also offered suggestions on the procedure to be followed in order to ensure time bound delivery of an outcome on public stockholding for food security. India also made a case for adopting a similar approach on all the elements of the Bali package including the LDC issues.

4. Extensive review of Special Economic Zones for re-energizing manufacturing-led exports. Governance reforms in SEZs e.g.

• Prescription of time limits for disposal of various activities related to SEZ Developers/Units
• Digitization of procedures
• Standardization of procedures, harmonization of rules, formats and fees etc.
• Decisions on modification of MAT & DDT and the dual use of infrastructure in non-processing areas, these proposals are in active consideration
• Other issues such as those relating to Service Tax, extending the tax holiday for the pharmaceutical industry and extension of Customs ICEGATE system to the SEZ framework, are being actively pursued  

5. Mainstreaming of States in trade

• Government of India has requested the State Governments to develop an Export Strategy. This suggestion of Government of India to mainstream States has been welcomed by them
• Several suggestions communicated by Commerce Secretary to Chief Secretaries of States e.g. on infrastructure needs, human resource requirements, instituting export awards etc.
• State Governments advised to appoint an Export Commissioner for coordination of all export-related activities.
• CIM has written to the Chief Ministers of the States suggesting that they oversee the task of mainstreaming their States 

6. Plantations

• An insurance based scheme being evolved for stabilization of prices of four plantation crops (Tea, Coffee, Rubber and Spices).
• A National Policy for rubber sector being formulated
• A special agency, namely the ‘Saffron Production & Export Development Agency’ (SPEDA) to be set up for development, production and marketing of saffron with headquarters in Jammu & Kashmir.
• Additional measures for promotion of export of orthodox and packaged tea and GI branding of tea are likely to be announced in the Foreign Trade Policy. Subsidy-based support under the XII Plan will be redesigned to achieve the goal of enhancing production as well as exports.
• Policy measures will be taken to improve quality of grown/manufactured tea. Steps will be taken to fix, within an early time frame, MRLs for chemicals authorized for use in tea cultivation in light of the CODEX standards.
•  An exercise of resetting the goals and functions of Commodity Boards and making them more citizen-centric will be taken up.
• Branding campaigns planned for promotion of export of specific sectors such as services, pharmaceuticals, plantation commodities, engineering, and commodities/services in which India has historical strengths such as handicrafts, yoga etc.
• Indian Institute of Packaging to be strengthened to emerge as a technology hub/centre for setting packaging standards of export oriented products in line with international trends/norms and improving/controlling quality of export packages. 

7. Process initiated by government (as a result of DOC’s initiative) to enhance export of items from the Defence sector 

• FDI policy modified – e.g. limit on automatic route enhanced from 26% to 49%
• Clarity brought in as regards industrial licenses for this sector
• Fastracking of applications
• Listing of munitions
• Creation of HS codes for items in this sector 

8. Forging stronger relationships in our immediate neighborhood

• India’s trade surplus with SAARC (South Asian Association for Regional Cooperation : India, Bhutan, Pakistan, Sri Lanka, Nepal, Bangladesh and Maldives) countries has doubled, thereby, greater economic integration has been achieved in South Asia. Besides, a line of credit of US $ 1 billion has been offered to Bhutan. During the first quarter of 2014-15, exports to South Asian countries have grown by 39%.
• As part of our larger vision, a more focused direction would be given to the utilisation of FTAs and to establish new approaches to preferential trading with Latin America, CIS region and Africa
• Giving effect to a vision of integration in less integrated areas
• Government will also strategise global trade engagements to conclude trade pacts, where negotiations are in various advance stages, such as with EU, PERU/Columbia, COMESA, RCEP, MERCOSUR, Russia, China, US.

9. Initiatives for Africa

• 4^th India – Africa Trade Ministers’ Meet in New Delhi on 28 November 2014; the recommendations of this Meet will be considered by the Heads of Government during the India – Africa Forum Summit – III on 4 - 5 December 2014.
• Meeting of the India – Africa Business Council to be held, along with Trade Ministers’ Meet.   
• India committed to substantially contribute to building African capacities through supporting education and capacity building institutions and in enhancing value addition and processing of raw materials in Africa. The Duty Free Tariff Preference Scheme offered by India has the potential to increase African exports to India.

 10. E-procurement

• An ambitious programme for e-procurement in States to be supported
• 23 States are already on board; others will also be taken on board; objective is wider and deeper coverage
• The target is that over the next 1 year, there will be a shift to e-tendering for all procurement exceeding ₹ 5 lakh  

11. Corporate Social Responsibility (CSR) Initiatives through PSUs under DOC

Even before Hon’ble PM had made the announcement regarding provision of better sanitary facilities in schools on a priority basis, Department of Commerce had issued instructions to its PSUs to take up this issue under CSR. 

12. Service Sector Exports

• Net trade balance in service sector exports for the month of May and June is US $ 5.89 billion and US $ 5.78 billion respectively.
• The Services sector has been a major force in driving growth in the Indian economy for more than a decade. Services contribute around 60% to the GDP of the country, 35% to employment, 25% to total trade, around 40% to exports, 20% to imports and account for more than 50% of FDI into the country.

Mainstreaming of Services Exports

• Focussed action and reforms to increase exports of Business, Professional, Tourism, Health Care and Logistic Services, R&D, Consulting, Printing and Publishing, Telecom, Construction, Educational, Entertainment Services
• Attempt greater liberalisation of Services in the WTO 

13. Project Exports

• Focus on Project exports, specially to Africa, West Asia, CIS countries, ASEAN and Cambodia, Laos, Myanmar and Vietnam.  

14. Improving Production Standards and Building Brand India

• A mandatory standards regime to be  implemented, to protect consumers and also raise the quality of merchandise produced which in turn raises the capacity to export to discerning markets. 
• This together with promotion of our traditional brands of goods like tea, spices, ayurvedic products and services like, yoga, wellness and health care as valued Indian brands can lead to greater value addition and export realization.
• The export diversification policy pursued by the Government needs to be accelerated by expanding both the range of products and number of countries. Indian exports should move up the value chain. Export of branded goods needs to be encouraged by promoting individual brands. Manufacturing exports require strong brand promotion. Sectors like Gems and Jewellery, Leather, Textiles, Engineering etc. are striving to carve an exclusive `Brand India` niche for themselves in the world markets. 
• India Brand Equity Foundation (IBEF) is playing a key role in product perception and production promotion strategies in international markets. IBEF’s primary objective is to promote and create international awareness of the Made in India label in markets overseas and to facilitate the dissemination of knowledge of Indian products and services. Towards this objective, IBEF works closely with stakeholders across government and industry.