New Export Promotion Measures and duh...

Worried over the decreasing exports from India, Commerce ministry came up with additional export promotion measures. The measures were announced on 26 Dec by Hon'ble Commerce minister of India. Details here

Blogger Highlights:

  • 2% interest subvention scheme extended for one more year, and the base broadened to include all SMEs of all sectors, and some important parts of Engineering sector, project exports to SAARC etc. 
  • Five new countries (NZ, Cayman Islands, Latvia, Lithuania, Bulgaria) added to the list of countries, the exports to whom, will qualify for incentives under Focus Market Scheme. Three more countries added under Market Linked Focus Product Scheme (Thailand, Taiwan, Czech) and some more products added under Focus Product Scheme. See details here. 
  • A new incentive at the rate of 2% on the incremental growth of exports made to US, EU, Asia, in the period of Jan-March 2013, over the base period of Jan-March 2012
The third one was 'duh'. 

Let's imagine two exporting firms. Both are passing through this recession in global demand. One is lucky to have an inelastic demand for its product (say refined petroleum products, e.g. Reliance), and the other one who is affected by global slump (e.g. Brakes India, an auto component manufacturer). Who should be supported through incentives? The one who's struggling in the tough phase, or the one who is sailing well? Someone in the Govt thought that the one doing well should be rewarded; and the one who is struggling needs to be ignored. The logic beats me. Probably, it beats the current Director General of Foreign Trade too, looking at his expression below, while the commerce minister made that announcement :) 


  1. Well I totally agree with you.... As a service provider I am more concerned about what the Foreign Trade Policy has in its booty to provide to a Service Provider...??

    We have observed in the Foreign Trade Policy 2009-14 and the changes which have been made through the Annual Supplements, the focus on providing benefits has only been restricted to the Manufacturing / Trade Sector. But, in the hindsight, when we know that the Services Sector is one of the vital sectors in the Indian context, given its contribution to the GDP, we feel the Ministry is doing very little to promote the Services Sector...

    There are only 2 Schemes which a service provider can avail, Served From India Scheme (SFIS) (Again the same is not applicable to all service providers, it has been made more restrictive with the Appendix 41 coming into play) and EPCG Scheme (which is a sharing between Service Provider & Manufacturer, so therefore no exclusivity). I am sure you will agree that the SFIS Scheme in itself is so restrictive, where yes, at one hand you do provide 10% Duty Credit of the Foreign Exchange Earned, but then how much of this 10% is actually being utilized??

    We strongly feel that positive changes need to be brought in the Policy for the Service Provider, that shall be more beneficial to the service provider.

    Leaving few thoughts behind,

    why cant we reduce the % of the benefit from 10% to may be 6 or 7%, but then;

    a. make this scrip transferable outside the group company
    b. allow payment of service tax liability through these scrips

    We seriously feel and believe, that if the above thoughts are put into execution, Service Providers will be far more charged up and will ensure that they do great business to earn a Reward which is beneficial.

  2. Mr Anand Sharma, Minister for Commerce, Industry and Textile, Government of India, shared his views on the future outlook on the Indian economy. . Check out the view of Anand Sharma on Exports in India


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