The minister said the Merchandise Exports from India Scheme (MEIS) incentive rate will be raised by 2 per cent across the board for labour intensive/MSME sectors.
With a postponement of the pending mid-term review of the Foreign Trade Policy (FTP) that was earlier supposed to be released with the Goods and Service Tax (GST) implementation, the Directorate General of Foreign Trade (DGFT) yesterday announced the review, highlighting the focus of the framework to be on the Micro, Small and Medium Enterprises (MSMEs).
The FTP will focus on exports from labour intensive and MSME sectors by way of increased incentives in order to increase employment opportunities.
He said input tax credit (ITC) and Integrated-GST refunds for exporters are being expedited and explained in detail the process and procedure for refund of the claims for exporters.
He accepted that exporters had faced hurdles due to implementation-related issues of Goods and Services Tax (GST).
Mr. Baru said the 2% increase in the Service Exports from India Scheme (SEIS) incentive for services like business, legal, accounting, architectural, engineering, educational, hospital, hotels and restaurants would provide impetus for boosting India's service exports in non-IT areas. The Commerce Minister said that the FTP will leverage the long term advantages of the historic reform of the GST, in terms of reduced compliance and logistics costs.
In April 201, the government had announced several incentives in the five-year FTP for exporters and units in the special economic zones (EPZs) to almost double India's exports of goods and services to $900 billion by 2020.
It also has a goal of increasing India's share of world exports to 3.5 per cent, from two per cent. "The lower duty on most of items and reduction of cascading effect of various duties would lower the cost and make exports competitive".
Key sectors receiving the incentives are leather, agriculture, carpets, hand-tools, marine products, rubber products, ceramics, sports goods, medical and scientific products and electronic and telecom components.
A note on discussion by financial advisors dated November 30 reviewed by The New Indian Express shows Adhia's priority is "assessment of impact of GST on schemes and the status of inputs received from the state governments".
These steps are likely to improve India's ranking in the Logistics Performance Index (LPI) and promote exports and enhanced growth, the release added. Information-based policy interventions will be ensured through state-of-the-art trade analytics division.
FTP will also focus on "Ease of Trading" across borders.
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