The Commerce Ministry has sought to shed from its portfolio non-core areas including Foreign Trade Policy (FTP) implementation, as well as administrative control over commodity boards and certain Public Sector Undertakings (PSU) such as MMTC, STC and PEC.
This is to better utilise the ministry’s resources in ‘core focus areas’ such as FTP formulation as well as India’s trade talks with other countries (bilateral and regional Free Trade Agreements) and at the World Trade Organisation (WTO)-level, according to official sources.
The Ministry’s move to ensure greater attention to FTP formulation and trade talks assume significance as it comes at a time when India’s goods and services exports are being impacted by rising incidents of protectionism across the world as well as trade disputes and weak global demand.
Export target
The apex body for India’s exporters, FIEO, recently said the government’s target for India’s overall exports (goods and services) of $900 billion by 2019-20 is unlikely to be achieved and that it should be scaled down to $700-750 billion.
Negotiations on the WTO’s Doha Development Round as well as India’s proposed FTAs including the Regional Comprehensive Economic Partnership (mega-regional FTA between 16 Asia Pacific nations including India) and the one with the European Union are at a crucial stage.
The Commerce Ministry — in a recent inter-ministerial meeting convened by the Cabinet Secretariat — asked the Central Board of Excise and Customs (CBEC) to take over the role of the nodal body for FTP implementation, the sources said.
They added that the Commerce Ministry is also keen to transfer to the Agriculture and Farmer Welfare Ministry the administrative control it (Commerce Ministry) currently has over the commodity boards (Coffee Board, Tea Board, Rubber Board, Spices Board, and Tobacco Board) as well as the related responsibilities regarding the oversight of production, distribution and development of plantation crops (such as coffee, tea, rubber, spices, tobacco and cashew).
Core competence
The CBEC, however, is learnt to have declined the Commerce Ministry’s request saying FTP was not its core competence, and that such as move may complicate matters as it (the CBEC) will have to create an operational structure similar to the one that the Directorate General of Foreign Trade (DGFT) currently has for FTP implementation.
The DGFT is attached to the Commerce Ministry and is responsible for formulating and implementing the FTP. The CBEC has also opined that shifting the FTP implementation powers from Commerce Ministry would also require the difficult process of amending the concerned laws — the Customs Act and the Foreign Trade (Development & Regulations) Act, the sources said.
On the issue of jurisdiction over plantations, the Commerce Ministry has begun work on a plan to merge the various commodity boards into a single organisation.
