India needs to build on the competitive edge it has in agriculture, services exports
There was a time not very long ago when Industry used to wait for the announcement of the annual Exim policy with bated breath, fearing the worst. It is a reflection of the changing times that the event is now looked forward to with hope and anticipation. The annual Exim policy announced by Commerce and Industry Minister Arun Jaitley is in line with the trend established since the early 1990s.
In his opening remarks, Jaitley frankly recognised the limitations of an annual Exim policy that leaves very little elbow room within the framework of a five-year Exim policy. The economists and the business strategists need not, therefore, feel terribly disappointed if they do not find bold new initiatives like free-trade agreements or exchange rate management initiatives or the scrapping of export promotion schemes to take exports to a higher trajectory of growth.
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Such initiatives can only emerge from a consensus among the political, bureaucratic, industrial, academic and media establishments. The best thing that has happened to Indian exports since the 1980s has been the constitution of a professional Indian Trade Service, which has evolved into a storehouse of knowledge about exports and imports.
The initiatives for promotion of agri-exports and services exports within the overall WTO framework are bold and timely. These are the sectors in which we have a competitive edge and we need to build on them. While the emphasis in the policy right through the decade has been on making the entire country a special economic zone through phased removal of restrictive rules and regulations, the islands of export excellence that have emerged need to be strengthened and invigorated in the meanwhile.
The facilities offered to the special economic zones, export oriented units, EHTPs and Industrial Clusters strengthen the framework provided for in the five-year Exim policy (2002-2007). There is also a welcome incentive to the status holders to achieve higher growth in exports.
The Export Promotion Capital Goods Scheme has been made more attractive to benefit all exporters across the board. The encouragement to exports of embedded software has the potential of transforming a whole range of our consumer and capital goods exports into higher value added products.
The promise of online approvals can indeed strike at the roots of avoidable transaction costs. While the Directorate-General of Foreign Trade has already done whatever it could in this regard, one hopes the other community partners will also rise to the occasion to honour the Commerce Minister