The new Foreign Trade Policy (FTP) takes an integrated view of the overall development of India’s foreign trade and goes beyond the traditional focus on pure exports.
This would be clear from the following statement in the policy document, “Trade is not an end in itself, but a means to economic growth and rational development. The primary purpose is not the mere earning of foreign exchange, but the stimulation of greater economic activity.”
The government unveiled a mix of procedural measures and fiscal incentives to trade with non- traditional destinations to bolster export order books drying out in two top regional markets-the US and the European Union.
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New emerging markets have been given a special focus to enable exports to be competitive. Incentive schemes are being rationalised to identify leading products which would catalyse the next phase of export growth.
The government plans to introduce a nation-wide uniform GST from next year that would subsume the complex web of indirect taxes imposed by state governments. The introduction of zero duty capital goods scheme will add to expansion and modernization of production base at a time when investment is drying up in export industries.
Other important features of the policy include:
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(i) $ 200 billion or Rs 98,000 crore is the export target for 2010-11.
(ii) 100% growth of India’s export of goods and services by 2014.
(iii) 15% growth target for next two years; 25% thereafter.
(iv) 3.28% targeted India’s share of global trade by 2020 double from the current 1.64%.
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(v) Jaipur, Srinagar Anantnag, Kanpur, Dewas and Ambur identified as towns of export excellence.
(vi) 26 new markets added to focus market scheme.
(vii) Provision for state-run banks to provide dollar credits.
(viii) Duty entitlement passbook scheme extended till Dec. 2010.
(ix) Tax sops for export-oriented and software export units extended till March 2011.
(x) New directorate of trade remedy measures to be set up.
(xi) Plan for diamond bourses.
(xii) New facility to allow import of cut and polished diamonds for grading and certification.
(xiii) Export units allowed to sell 90% of goods in domestic market.
(xiv) Export oriented instant tea companies can sell up to 50% produce in domestic market.
(xv) Single-window scheme for farm exports.
(xvi) Number of duty-free samples for exporters raised to 50 pieces.
(xvii) Value limits of personal carriage increased to $5 million (Rs 24.5 core) for participation in overseas exhibitions.