Frost & Sullivan suggests potential changes in revamping DGFT
The Dollar Business Bureau
Amid India’s unimpressive exports growth for the last couple of years, consulting firm Frost & Sullivan has conducted an in-depth analysis and has come out with key suggestions to revamp the Directorate General of Foreign Trade (DGFT), an attached office under the Ministry of Commerce and Industry.
The consulting firm has suggested greater autonomy for DGFT, a body currently functional under the Ministry of Commerce. So far, DGFT has served as a facilitator instead of enforcer, a factor proving a hindrance to the country’s exports-oriented initiatives.
“We have conducted an in-depth analysis on the scope and nature of the functions and operational tasks undertaken by DGFT. In light of the key underlying policy objectives and regulatory concerns, we had to ascertain the relevance of these activities in terms of their content and execution modalities,” said Mani James, Vice President, Public Sector Practice, Frost & Sullivan.
Frost & Sullivan stated an autonomous DGFT could be more vibrant, thereby promoting its trade interests would become simpler and quicker. Among the key recommendations suggested by the industry consultant included a mix of restructuring and reform initiatives keeping in mind the domestic scenario with a dose of global best practices.
In April 2015, Prime Minister Narendra Modi-led government set the ambitious target of almost doubling India’s exports to $900 billion by 2020, while also underscoring the steps to increase India’s ranking in the ease of doing business index. However, the uncertain global trade equations, coupled with emerging competition from peer countries and lack of intended reforms in the domestic market has kept India distant from its trade goals.
Therefore, the necessity of revamping DGFT becomes utmost important as India looks to raise its share of global trade. Currently, India’s share in global exports is a minuscule 1.62%, imports are 2.34% and global trade is just about 2%.
Frost & Sullivan underlined that the revamping of DGFT will translate into a much-needed increase in ease of doing business ranking, transparency, less policy paralysis, better governance, compliance and monitoring. “Export promotion is essential in global trade and can help turn around the economy and provide more jobs,” it said.
Earlier this week, the DGFT said it is currently studying the reports put forth by the consulting major and will soon come out with relevant announcements.