Commerce Department pushes for more sops for small exporters
The Dollar Business Bureau
Striving to make the life of small exporters easier, the Department of Commerce is likely to push for greater interest subsidy and broader export credit insurance.
As part of the review of Foreign Trade Policy (FTP) – 2015-2020, the Commerce Department is seeking to broaden the basket of services and to make it more attractive for foreign nationals to study and get medical treatment in the country.
Nirmala Sitharaman, Commerce and Industry Minister, has marked two sections small exporters and services to be added in the review of the FTP, which is expected to be released in June, in time for the roll out of the Goods and Services Tax (GST).
According to sources, Rs.1,000 crore has been spent by the Commerce Department for an interest subsidy during the current fiscal year, a benefit which is available for exporters from some specific sectors.
The yearly subsidy budget would be around Rs.2,500 crore so that a broader segment of exporters, specifically the small and medium enterprises (SMEs), could be benefitted, the sources added.
Similarly, in the case of government-owned Export Credit Guarantee Corporation (ECGC), which provides export credit insurance support to exporters, the aim is to take the insurance coverage from the present level of 7% of exporters to the world’s average of about 20%. Though the government is in favour of the plan, the Ministry of Finance is yet to allocate funds.
The Commerce Department, which has been allocated a little less than Rs.4,500 crore for the current fiscal, is hopeful to get extra funds in the additional demand for grants. Moreover, it is showcasing its record of spending to claim for more funds.
In the case of services, the Government believes that the focus should be enhanced on sectors beyond information technology (IT), which is impacted by the protectionist measures across several countries including Australia, Singapore and the US, which are putting curbs on visas.
The department believes that services like health and education should be better placed to catch the demand and also help improve quality locally.
During the fiscal 2016-17, India’s exports stood at $274.6 billion, a growth of 4.7% compared to $262.3 billion in the previous fiscal of 2015-16.
India’s net export of services for the financial year 2016-17 was estimated at $65.2 billion which is lower compared to $69.4 billion during the previous financial year, as per the data given by RBI.