Foreign Trade Policy 2015-2020 Announcement on 1.4.2015
Speech of CIM
1. I am happy to release the Foreign Trade Policy for the period 2015-2020.
2. India is now significantly more integrated with the global economy than 15
years ago. Foreign trade today plays an important part in the Indian economy.
3. We must now aim higher. We want to make India a significant participant in
world trade by the year 2020. India must assume a position of leadership in the
international trade discourse.
4. The state of the external environment and new features of the global trading
landscape such as mega regional agreements and global value chains will
profoundly affect India’s trade.
5. But our biggest challenge is to address constraints within the country such as
infrastructure bottlenecks, high transaction costs, complex procedures, and
constraints in manufacturing. While the external factors are largely outside our
control, there is a lot we can do to strengthen our own capabilities and set our
house in order.
6. Government has taken a number of very important initiatives such as ‘Make in
India’, ‘Digital India’ and ‘Skills India’. The foreign trade policy is closely
integrated with these initiatives. The new Policy provides a framework for
increasing exports of goods and services as well as generation of employment
and increasing value addition in the country, in keeping with the ‘Make in India’
vision of Hon’ble Prime Minister. The focus of the new policy is to support both
the manufacturing and services sectors, with a special emphasis on improving
the ‘ease of doing business’.
7. Our objective is to provide a stable and sustainable policy environment for
foreign trade in both merchandise and services.
8. We aim to help various sectors of the Indian economy to gain global
competitiveness.
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9. We want India to be known for its world class products. So we must focus on
quality and standards and produce zero defect products. ‘Brand India’ must be
synonymous with quality and reliability.
10. Foreign trade policy cannot be formulated or implemented in isolation of other
government economic policies or by any one department in isolation. Going
forward, a ‘whole-of-government’ approach will be required.
11. We have taken a major initiative to mainstream State and UT Governments and
various Departments and Ministries of the Government of India in the process
of international trade. The Department of Commerce is helping State
Governments to prepare export strategies. Many of the State Governments
have nominated Export Commissioners. Senior officials have been appointed
as designated focal points for exports and imports in several Central
Government departments.
12. This will bring in much needed coordination and policy coherence across the
Government and across the country.
13. Market diversification is a key aspect of the policy. In future when we enter into
various forms of trade agreements, we will look for promising markets and
sources of critical inputs. To our traditional markets in the developed world we
will focus on exporting products with a higher value addition, supplying high
quality inputs for the manufacturing sector in these markets and optimizing
applied customs duties on inputs for India’s manufacturing sector. This will
strengthen backward manufacturing linkages which are vital for India’s
participation in Global Value Chains.
14. In the ongoing Doha Round of trade negotiations, India will continue to work
towards fulfilling its objectives and to work with like-minded members to remove
any asymmetries in the multilateral trade rules which place a developing
country at a disadvantage. The current WTO rules as well as those under
negotiation envisage the eventual phasing out of export subsidies. This is a
pointer to the direction that export promotion efforts will have to take in future,
i.e. towards more fundamental systemic measures rather than incentives and
subsidies alone.
15. There is a need to ensure that our products and services are internationally
competitive. A roadmap has been developed on measures required to raise the
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quality standards of the merchandise produced and enhance India’s capacity to
export to discerning markets.
16. In an increasingly competitive world, branding plays an indispensable role in
global positioning. Branding campaigns are being planned for promoting
exports from sectors such as services, pharmaceuticals, plantations and
engineering as well as of commodities and services in which India has
traditional strengths, such as handicrafts and yoga.
17. Specific measures will be taken to facilitate the entry of new entrepreneurs and
manufacturers in global trade through extensive training programmes.
18. We have based the FTP for 2015-2020 on certain principles, such as,
encouraging the export of labour intensive products, Agricultural products, high
tech products with high export earning potential and eco-friendly and green
products and work on focussed market diversification. Technology intensive
manufacturing will be supported. Other focus areas are defence, pharma,
environment friendly products, products meeting BIS standards and technical
textile related products.
19. Coming now to the specifics, FTP 2015-20 introduces two new schemes. The
‘Merchandise Exports from India Scheme’ (MEIS) is for export of specified
goods to specified markets. The ‘Services Exports from India Scheme’ (SEIS)
is for increasing exports of notified services. These replace multiple schemes
earlier in place, each with different conditions for eligibility and usage of scrips.
20. No conditionality will be attached to any scrips issued under these schemes.
Duty credit scrips issued under MEIS and SEIS, and the goods imported
against these scrips, are fully transferable.
21. The foreign trade policy supports ‘Make in India’ through measures to
encourage procurement of capital goods from indigenous manufacturers under
EPCG Scheme by reducing Export Obligation (EO) by 25%. This will promote
the domestic capital goods manufacturing industry and enable them to develop
their productive capacities for both local and global consumption. Further,
there is a higher level of rewards under the MEIS for export items with high
domestic content and value addition.
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22. E-Commerce exports of employment creating sectors have been supported
under the `Merchandise exports from India Scheme’ through courier or foreign
post offices.
23. Special Economic Zones have been facing some challenges in recent times. In
order to boost exports from SEZs, government has now decided to extend
benefits of both the reward schemes (MEIS and SEIS) to units located in SEZs.
It is hoped that this measure will give a new impetus to the development and
growth of SEZs in the country.
24. Trade facilitation and enhancing the ease of doing business are the other major
focus areas in this new FTP. One of the major objectives of the FTP is to move
towards paperless working in a 24x7 environment.
25. The Services sector has emerged as a prominent sector in India in terms of its
contribution to national and State incomes, trade flows and FDI inflows. The
Department of Commerce is working on an ambitious reform agenda, which is
being pursued through an inter-ministerial mechanism. In addition, the
‘Services Exports from India Scheme’ (SEIS) is aimed at encouraging exports
of the notified services.
26. Through this policy we aim to enable India to respond to the challenges of the
external environment, keep in step with a rapidly evolving international trading
architecture and make trade a major contributor to the country’s economic
growth and development. The confluence of several favourable factors gives
India an unprecedented window of opportunity to set its house in order and
face the challenges thrown up by an ever changing global economic
environment.
27. I urge the Government and industry to work in tandem to deal with the
challenges and to respond to the tremendous opportunities before us.
28. On our part I assure you that we will have regular interactions with all
stakeholders, including State Governments to achieve our national objectives.
Thank you.
