No carrots likely in foreign trade policy

NEW DELHI: There may not be new incentive schemes for exporters in the annual revision to the foreign trade policy (FTP) to be announced later this week. The finance ministry has shot down most proposals mooted by the commerce ministry for introducing new schemes, including one for self-help groups (SHG).

Instead, the finance ministry has agreed to expand and deepen existing schemes such as the focus product, focus market and vishesh krishi upaj yojana schemes by increasing allocations.

While the existing duty entitlement pass book (DEPB) scheme has been extended for another year, the government’s intention of coming up with an alternative scheme — more compliant with WTO norms — in six months will be announced in the policy.

“We want to be ready with the new scheme six months before the existing scheme expires to give exporters time to understand and plan their operations accordingly. An overlap of six months will take care of the possible switch-over problems,” an official said.

On the issue of new schemes, sources pointed out that the revenue department only had a limited pool of resources to fund schemes and introducing new schemes would result in less funds for existing schemes, rendering them ineffective. “We thought it is better to make the existing schemes more effective than push for new ones that would put a question mark on the worth of the existing schemes,” an official said.

Officials added that strengthening existing schemes would also restore exporters’ faith in the system and build in predictability that is essential to help exporters take prudent pricing decisions.

The schemes that are likely to be expanded include the focus product, focus market and vishesh krishi upaj yojana schemes. While the list of items benefiting from the focus product and the vishesh krishi upaj yojana schemes would go up, exports to newer markets, especially in the CIS region, could be incentivised under the focus market scheme.