What is in news : India’s foreign trade policy (FTP) will be extended for six months, till March 31, 2022

Details : Central government had extended the Foreign Trade Policy 2015-20 for one year (till March 31, 2021) on March 31, 2020. Later, it was extended till September 30, 2021.

Features of the FTP

• Goods– Earlier there were 5 different schemes (Focus Product Scheme, Market Linked Focus Product Scheme, Focus Market Scheme, Agri. Infrastructure Incentive Scrip, VKGUY) for rewarding merchandise exports with different kinds of duty scrips with varying conditions attached to their use.
• Duty-free scrips are paper authorisations that allow the holder to import inputs which are used to manufacture products that are exported, or to manufacture machinery used for producing such goods, without paying duty equivalent to the printed value of the scrip. For instance, a duty-free scrip valued at Rupees 1 lakh allows the holder to import goods without paying duty of up to Rupees 1 lakh on the goods.
• Under the new Foreign Trade Policy, all these schemes have been merged into a single scheme, namely the Merchandise Export from India Scheme (“MEIS“)and there is no conditionality attached to scrips issued under the MEIS.
• Services–
  • The Served From India Scheme has been replaced with the Service Exports from India Scheme (“SEIS“).
  • SEIS is stated to apply to ‘Service Providers located in India’ instead of ‘Indian Service Providers’.
  • Therefore, SEIS rewards to all service providers of notified services, who are providing services from India, regardless of the constitution or profile of the service provider.
• Special Economic Zones – The policy outlines extended incentives for Special Economic Zones in India
• Export Houses– The nomenclature of Export House, Star Export House, Trading House, Star Trading House, Premier Trading House certificate has been simplified and changed to One, Two, Three, Four and Five Star Export House.
• Status Holders– Business leaders who have excelled in international trade and have successfully contributed to India’s foreign trade are proposed to be recognized as Status Holders and given special privileges to facilitate their trade transactions, in order to reduce their transaction costs and time.
• Resolving Complaints
  • In an effort to resolve quality complaints and trade disputes between exporters and importers, a new chapter on Quality Complaints and Trade Disputes has been incorporated into the Foreign Trade Policy.
  • There would be no conditionality attached to any scrips issued under these schemes.
  • For grant of rewards under MEIS, the countries have been categorized into 3 Groups, whereas the rates of rewards under MEIS range from 2% to 5%.
  • Under SEIS the selected Services would be rewarded at the rates of 3% and 5%.
  • A new institution – Centre for Research in International Trade – is being established not only to strengthen India’s research capabilities in the area of international trade, but also to enable developing countries to articulate their views and concerns from a well-informed position of strength.
  • Two institutional mechanisms are being put in place for regular communication with stake holders- the board of trade and council for trade development (CTD) and promotion. While the board of trade will have an advisory role, the CTD would have representation from states and UT governments.