Commerce and Industry Minister, Anand Sharma on Thursday unveiled the Foreign Trade Policy (FTP) for 2013-14 containing a number of sops including extension of the popular zero duty EPCG scheme to all sectors, extension of TUFs benefits to EPCG, promotion of incremental exports, widening the market and product focus scheme and extension of interest subvention scheme till March 2014.
Majority of the measures are aimed at giving a big boost to the labour intensive handicrafts, handloom, ready made garments and man made fabrics sectors which form a major chunk of the textiles exports which have been on the decline for the past many months. In addition to this, a new reformist policy for Special Economic Zones (SEZs) was also put in place.
Announcing the initiatives as part of the annual supplement to the FTP is primarily aimed at giving a big push to exports which showed a decline of 1.76 per cent to $300.6 billion during 2012-13 and pushed up the trade deficit to $190.91 billion.
Spelling out the details of the policy, Mr. Sharma said the Export Promotion Capital Goods (EPCG) scheme, which allows exporters to import capital goods at zero duty, would stand extended beyond March 2013 and would be applicable to all sectors. "We have decided not only to extend the zero duty EPCG scheme beyond March 2013, but also merge it with 3 per cent EPCG scheme. Now, the zero duty EPCG benefit will be available to all sectors," he said much to the delight of the representatives of the textiles sector sitting in the audience.
The Commerce Minister also announced that the reduction of Export Obligation (EO) in the case of domestic sourcing of capital goods under EPCG authorisations has been reduced by 10 per cent to promote domestic manufacturing of capital goods. In order to encourage manufacturing activity in Jammu and Kashmir, it was decided to reduce the specific EO to 25 per cent.
Mr. Sharma said at present 2 per cent interest subvention scheme is available to certain specific sectors like handicrafts, handlooms carpets, ready made garments, processed agricultural products, sports goods and toys. He said the scheme has been further widened to include 134 sub-sectors of engineering sector. Similarly, the new FTP announced widening of scope of utilisation of duty credit scrip. Similarly, he said Norway has been added under Focus Market Scheme and Venezuela has been added under Special Focus Market Scheme taking the total numbers under these two initiatives to 125 and 50 respectively. "About 126 new products have been added under Focus Product Scheme from sectors like engineering, electronics, chemicals, textiles and pharmaceuticals. About 47 new products have been added under market Linked Focus Product Scheme (MLFPS) with two new countries – Brunei and Yemen added as new markets. The MLFPS has been extended from March 2013 to March 2014 for exports to US and EU," he added.
Mr. Sharma said exports of high tech products would be incentivised and would be notified separately by June 30, 2013. The Incremental Export Incentivisation Scheme has been extended for the year 2013-14. The government has also agreed to include additional countries under this scheme. 53 countries of Latin America and Africa have been added with the objective to increase India’s share in these markets.
In addition to this, imports of cars/vehicles have been permitted through designated ports only which include ICD at Faridabad and Ennore in Tamil Nadu.