Policy aims to boost SSIs, agri & mfg: DGFT

Leveraging the buoyant 24% growth in exports during 2004-05, director general of foreign trade (DGFT) KT Chacko is working on reducing transaction costs by cutting red tape. The current amendments to the 2004-09 Foreign Trade Policy focus on giving an impetus to the manufacturing sector, small industries and the farm sector, he told The Economic Times soon after the changes were unveiled. While the current growth has surpassed targets, the DGFT feels maintaining the growth momentum is not as easy as it appears. Excerpts: Do you think India can increase its exports to $100 billion during 2006-07? Our policy measures are aimed at maintaining the growth rate at current levels. I am optimistic, but it is difficult to achieve high incremental exports without special efforts. The objective of the Foreign Trade Policy 2004-09 is to double our percentage share of the global merchandise trade within five years. To achieve this, an annual growth rate of about 16% is envisaged. Based on the excellent export performance in 2004-05, the government has already announced a revised export target of $92 billion for 2005-06 as compared to the original target of $88 billion. All our efforts are directed at achieving these targets. How will the current changes to the policy help in accelerating trade growth? The policy is based on the premise that trade is not an end in itself, but a means to economic growth and national development. The aim of the trade policy is employment generation. This has been done by focusing on the manufacturing sector. Policy measures under the EPCG scheme is one such move. To modernise the retail sector, which has great potential to generate employment, concessional duty imports have been allowed. The policy has also incentivised the poultry, dairy and marine sectors. These measures will boost exports and at the same time help create jobs. Could you explain the specific new initiatives aimed at removing bottlenecks affecting trade? The government has decided to set up an inter-state trade council to engage state governments in providing an enabling environment for promotion of international trade. This will unlock huge export potential from various parts of the county. Besides, in this annual supplement, we have focused on three aspects: Modernisation of manufacturing sectors, easy availability of raw material and procedural simplification. The scope of the EPCG has been expanded to modernise our industry. Liberal advanced licence schemes will help in raw material sourcing. Without boosting the manufacturing sector, it will not be possible to make an impact in the global market. Introduction of measures like single common application form (aayaat niryaat form) and single category of advance licence will simplify the existing procedures. Would you agree with the view that implementing policy decisions is difficult, as shown by the delay in implementing the Target Plus scheme? There is no delay in notifying in any policy measures. Target Plus scheme is delayed only by seven days. I donâ€™t see any delay in notifying any scheme other than the Duty-Free Credit Entitlement Certificate scheme. On the other hand, we have liberalised a number of export-promotion windows. Several schemes, related to advance licence and EPCG, for example, have been clubbed. We are also working on an alternative for the Duty Entitlement Pass Book (DEPB) scheme. The new scheme will reimburse all the taxes and levies which are currently not reimbursed. This will include state-level taxes, and we are working on two sets of numbers â€” one incorporating value added tax (VAT) and another without VAT. The commerce department is in consultation with the revenue department for working out details of the DEPB alternative.

Policy aims to boost SSIs, agri & mfg: DGFT

Leveraging the buoyant 24% growth in exports during 2004-05, director general of foreign trade (DGFT) KT Chacko is working on reducing transaction costs by cutting red tape.

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