India is aiming to nearly double its annual exports to $900 billion by 2020 with the government’s signature ‘Make in India’ scheme serving as focal point of a new trade policy, which seeks to create jobs and aid economic revival.
Commerce minister Nirmala Sitharaman on Wednesday unveiled the five-year Foreign Trade Policy (FTP) 2015-2020 that offers a raft of procedural and tax incentives for domestic manufacturing and services — a strong edifice of the India growth story.
Sitharaman said the government wanted to increase India’s share of global exports from the current 2% annually to 3.5% by 2020. India’s exports currently stand at $466 billion.
“This new policy lays out a stable and sustainable roadmap for India’s global trade engagement in the coming years,” Sitharaman said at a press conference as she announced a slew of measures to remove red-tape, reduce shipment turnaround time and turn India into a major player in the global trade sweepstakes.
Sitharaman said the government would focus on “addressing constraints within the country”, including weak infrastructure and bureaucratic hurdles.
“Our target is to move towards a paperless working environment,” she said, adding that the government was working on allowing exporters to submit documents electronically.
Defence and e-commerce would be priority sectors, she said.
Industrialists often cite India’s complex rules as one of the major hurdles including energy shortages and land problems to ambiguous tax laws and lack of cooperation between the central and state governments that have kept away large-scale private investments.
Sitharaman also said unlike the annual reviews of the policy in past, “the FTP will be reviewed after two-and-half years to ensure continuity in the trade policy.”
The minister announced incentives for manufactured goods and services broadly bundled in two schemes — Manufactured Exports from India Scheme and Services Exports from India Scheme — seeking to sharpen India’s comparative and competitive advantage in areas such as software services and R&D among others.
The minister unveiled incentives for low-skill technology-intensive manufacturing.
The Centre will roll out benefits of up to Rs 1,625 crore in 2015-16. The cabinet will soon notify which sectors will be entitled to the benfits.