$ 1 trillion in likely merchandise exports by FY28, RoDTEP rate notification by weekend: Commerce Secretary

India could register $ 1 trillion in merchandise exports and $ 700 billion in services exports by 2027-2028, Commerce Secretary BVR Subrahmanyam said on Wednesday.

Subrahmanyam, speaking at an event hosted by the Confederation of Indian Industry (CII), said the government is likely to announce reimbursement rates under major tax neutralization programs for the export sector. by Friday.

He said the government will likely notify tax refund rates for the Exported Goods and Tax Remission (RoDTEP) scheme by this weekend and for the state levies and taxes refund scheme. and central (RoSCTL) specific to textiles by Thursday.

“We have established a roadmap for how we reach $ 500 billion in merchandise exports, and when will we reach $ 1 trillion. Our estimate is by 2027-2028, very modest estimates, we should reach $ 1 trillion, ”he said at CII’s annual meeting, adding that by then 20-30% India’s economy would consist of trade, similar to advanced export-based economies. like Japan, EU and United States.

A market information network will also be set up by the government for the same, he said.

“India has 140 embassies and 60 consulates around the world and all have a trade wing with a minister, adviser or attaché. No one asked them what you are doing, ”Subrahmanyam said, adding that they have now been given export targets with the countries they are based in, and asked them to identify export opportunities and to report on sudden trade barriers erected by countries.

The commerce department conducted a detailed export allocation exercise to more than 200 countries and regions, across 31 product groups, he said.

“Subsequently, a cumulative annual export target of $ 419 billion was set,” he said. India’s exports have hovered between $ 290 billion and $ 330 billion in recent years.

Regarding incentive programs for exporters, he said the withdrawal of incentives over the past five years has tripled while exports have remained static and this worries the government.

He said there was a commitment from the Ministry of Finance and that a backlog of Rs 50,000 crore of merchandise exports from India (MEIS) would be issued through post-dated scripts which can be deducted of a back and cashed.

“Any incentive should lead to better performance, and that is written into the guidelines. We must promote real exports, but taxes must not be exported, ”Subrahmanyam said.

This is gaining in importance as the RoDTEP program aims to reimburse built-in duties and taxes, such as VAT, on fuel used in transport, mandi tax and duties on electricity used during manufacture, which were not reimbursed to exporters until now.

The government will present the foreign trade policy by mid-September and the policy will be aligned with the country’s aspirations, he said.

On the issue of the container shortage, the secretary said it was a “very sad story” and a “bad situation” at the moment as there is a tripling of costs and a shortage of containers.

FTA, WTO

The secretary said the country needs to enter into free trade agreements (FTAs) in a balanced way, as the World Trade Organization (WTO) has not contributed much in the past 20 years, and the industry does not. cannot expect the multilateral system to deliver much because it has internal structural problems.

“We are not in any regional arrangement. So where does India go … if it wants to be a global economic player and a global trading power. We must have FTAs… There will be losses, there will be gains, ”he said.

Currently India is negotiating around 20 FTAs ​​but is speeding up six and the rest are putting a bit on the back burner, he said, adding that India’s experience with past FTAs ​​was not up to par. of their potential.

“These (FTAs that are being accelerated) are the ones that are going to be high added value, probably the first FTA strike will be with the United Arab Emirates,” he said.

Stressing that FTAs ​​will be scrutinized to see if they present adequate gains, he said that trade and technology devour some businesses, but they will also create new ones and that is how the economy will turn out. will develop.

“But we will ensure that our country as a whole is not damaged by FTAs. In the neighborhood, we have to play a friendly role, because if we don’t play a friendly role towards some of our neighbors, someone else will be friendlier to them and you may not like this something ”, did he declare.

Noting that India has lost a lot of preferences in the world like the GSP (Generalized System of Preferences), he said that India will comply with a large number of these FTAs ​​by next June, many of which will be concluded and open markets.

SEZs, neighborhoods

He also said that work was underway to facilitate the process of denotifying empty spaces over 10 crores in built-up area,

Rs 30,000 crore, in the more than 250 special economic zones (SEZs) of the country.

“We will bring other functionalities into the ZES policy where we will simplify,” he said.

He added that a new program – “Districts as a export hubs scheme” – will also be implemented later this year, in which districts would be encouraged to compete and an investment of Rs 50-100 crore is made in each. of them.

India will also launch the “Brand India” campaign later this year to raise awareness of product standards and ensure that Indian products are known around the world for their quality and value for money.

“Today you are worried when you hear the term ‘Made in China’. It is time to change our image on a global scale, ”he said.

Subrahmanyam also called on India Inc. not to sit on excess cash and increase investment in their businesses.

He said the government wanted to restructure the Commerce Ministry to prepare it for the future and that by the end of December there will be a very different functional setup within the ministry. He also said that the ministry had hired leading people to restructure the General Directorate of Foreign Trade (DGFT) and that it should become a trade promotion organization from an incentive distribution organization.

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