FTP may be delayed as government yet to finalise tax incentives

NEW DELHI: The announcement of new Foreign Trade Policy ( FTP) is likely to be delayed as ministries of commerce and finance are yet to take a final call on granting tax incentives to export promotion schemes.

The FTP or its annual review, which is usually announced in April, gives guidelines for enhancing exports with the overall objective of pushing economic growth and generating employment.

"Issues related with export promotion schemes are yet to be finalised. The issues would be discussed between commerce and finance ministers," sources said.

However, they added that a lot of ground work has been completed for the five-year trade policy for 2014-19.

Under the policy, the government gives fiscal incentives to exporters under different promotion schemes such as Market Access Initiative, Marketing Development Assistance, Vishesh Krishi and Gram Udyog Yojana, Focus Market Scheme, Focus Product Scheme and Market Linked Focus Products Scrip.

The Finance Ministry has to allocate funds for these schemes and even after allocation, the Commerce Ministry would take about a fortnight to finalise the contours of each of these schemes.

Exporters have already raised concerns over the delay in announcement of the FTP. Seven months of the current fiscal are already over.

Federation of Indian Export Organisations (FIEO) Director General Ajay Sahai said the delay is hampering shipments as exporters are unable to take any long term positions in the absence of clear guidelines.

"The government should come out with the policy as early as possible. It would help exporters in taking long term decision regarding their businesses," Sahai said.

India's exports grew marginally by 2.73 per cent in September, but a surge in gold imports pushed the trade deficit to about 18-months high of $14.2 billion.