The commerce ministry intends to hire a consultancy firm to conduct an in-depth study of the scope and nature of the functions and operational tasks undertaken by the Directorate General of Foreign Trade (DGFT). The idea is a relook at the prudence and relevance of its activities, and ascertain the degree of optimality with which they achieve the intended policy objectives and regulatory concerns.
If pursued diligently, this should eventually lead to restructuring the DGFT in a meaningful way, with less government and more governance.
The ministry has called for proposals from consultants for conducting an extensive study of the relevant practices in major trading nations/hubs of the world.
Also, the policy objectives and regulatory concerns being emphasised, the policies adopted and mechanisms/institutions being leveraged for implementation of the policies and regulation of foreign trade in those countries.
Taking cue from those studies, the consultants have to throw up options for the optimal manner in which the policy objectives and regulatory concerns could be addressed in India, in the light of modern thinking and global best practices, plus possible ways forward in reforming the present arrangements.
The best part of the Request for Proposal (RFP) is the Terms of Reference that require the consultants to examine the adequacy of the Foreign Trade Policy (FTP) in its current form.
Such as meeting the policy and regulatory objectives, whether FTP 2015-20 has been successful in improving the ease of doing business and whether DGFT as a body is performing its role of facilitating and implementing the FTP to the satisfaction of trade and industry.
Plus, alternative mechanisms of transferring incentives directly, whether an organisation like DGFT that facilitates formulation of the FTP is also required for implementing the export promotion schemes therein or whether the implementation part be delegated entirely to customs.
The RFP says the consulting entity should have proven expertise in research-based analytical studies in the area of economic and commercial policy, and have the necessary reach and access to the relevant resources that are required for such a global study.
To be eligible, it should have had a minimum turnover of Rs 50 crore in each of the past three years, experience of at least 10 years in consultancy assignments in India, prior experience of policy advisory, institutional strengthening and capacity building, related to government institutions, experience in serving the government in at least five similar projects in the past three years, have a minimum of five offices outside India in different countries and have minimum employee strength (consulting staff only, and excluding audit/tax or other non-consulting divisions) of 100.
I have long felt the DGFT has a definite role in regulating imports and exports, and in formulating export promotion schemes. While also advocating administration of the schemes through customs and excise, rather than regional offices of DGFT.
Ramu Deora, former chief of the Federation of Indian Export Organisations, has long pressed for direct transfer of incentives to exporters. Hopefully, the consultants hired will bring fresh insights and not merely write a report that the administrators want.
tncrajagopalan@gmail.com
