Streamlining SCOMET Policy:

 

Streamlining SCOMET Policy:
 

India is placing more emphasis on the "export control" regime as its integration with export control regime countries strengthens. There is a wider outreach and understanding of Special Chemicals, Organisms, Materials, Equipment and Technologies (SCOMET) among stakeholders, and the policy regime is being made more robust to implement international treaties and agreements entered into by India. A robust export control system in India would provide access of dual-use high-end goods and technologies to Indian exporters while facilitating exports of controlled items/ technologies under SCOMET from India.

 

Facilitating E-Commerce Exports:

 

E-commerce exports are a promising category that requires distinct policy interventions from traditional offline trade. Various estimates suggest e- commerce export potential in the range of $200 to $300 billion by 2030. FTP 2023 outlines the intent and road map for establishing E-Commerce Hubs and related elements such as payment reconciliation, book-keeping, returns policy and export entitlements. As a starting point, the consignment-wise cap on E-Commerce exports through courier has been raised from Rs. 5 lakh to Rs. 10 lakh in the FTP 2023. Depending on the feedback of exporters, this cap will be further revised on or eventually removed. Integration of Courier and Postal exports with ICEGATE will enable exporters to claim benefits under FTP. A comprehensive E-Commerce Policy addressing the export-import ecosystem would be brought in, based the recommendations of the working committee on e-commerce exports and inter-ministerial deliberations. Extensive outreach and training activities will be taken up to build capacity of artisans, weavers, garment manufacturers, gems and jewellery designers to on-board them on E-Commerce platforms and facilitate higher exports.

 

 

Facilitation under EPCG Scheme:

 

The EPCG scheme, which allows import of capital goods at zero customs duty for export production, is being further rationalised. Some key changes being added are:

(i)           Prime Minister Mega Integrated Textile Region and Apparel Parks (PM MITRA) scheme has been added as an additional scheme eligible to claim benefits under CSP (Common Service Provider) Scheme of Export Promotion Capital Goods scheme (EPCG).

(ii)               Dairy sector to be exempted from maintaining Average Export Obligation so that the sector could upgrade the technology.

(iii)             Battery Electric Vehicles (BEV) of all types, Vertical Farming equipment, Wastewater Treatment and Recycling, Rainwater Harvesting system and Rainwater Filters, and Green Hydrogen are added to Green Technology products. Hence, all these will now be eligible for reduced Export Obligation requirement under EPCG scheme.

 

Merchanting Trade:

 

To develop India into a merchanting trade hub, the FTP 2023 has introduced provisions for merchanting trade. Merchanting trade of restricted and prohibited items under the export policy would now be possible. Merchanting trade involves shipment of goods from one foreign country to another foreign country without touching Indian ports, involving an Indian intermediary. This will be subject to compliance with the Reserve Bank of India (RBI) guidelines and will not be applicable for goods/items classified in the CITES and SCOMET list. In course of time, this will allow Indian entrepreneurs to convert certain places like GIFT city, etc. into major merchanting hubs as seen in places like Dubai, Singapore and Hong Kong.

 

Amnesty Scheme:

 

In line with "Vivaad se Vishwaas" initiative, which sought to settle tax disputes amicably, a special one-time Amnesty Scheme has been introduced under the FTP 2023 to address default on Export Obligations. This scheme is intended to provide relief to exporters who have been unable to meet their obligations under EPCG and Advance Authorisations, and who are burdened by high duty and interest costs associated with pending cases. All pending cases of the default in meeting Export Obligation (EO) of authorisations mentioned can be regularised on payment of all customs duties that were exempted in proportion to unfulfilled EO. The interest payable is capped at 100% of these exempted duties under the scheme. However, no interest is payable on the portion of additional customs duty and special additional customs duty and this is likely to provide relief to exporters as interest burden will come down substantially. It hoped that this amnesty will give these exporters a fresh start and opportunity to come into compliance.

An Process Re-engineering and Automation: The new FPT 2023 reimposes greater faith on exporters for approvals through automated

Information Technology systems with Risk Management system. The new FTP emphasises export promotion and development, moving away from an incentive-based regime to a regime based on technology interface and principles of collaboration. Considering the effectiveness of some of the ongoing schemes like Advance Authorisation, Export Promotion Capital Goods (EPCG), etc. under FTP 2015-20, these will continue along with substantial process re-engineering and technology enablement to facilitate exports. The FTP 2023 codifies implementation mechanisms in a paperless and online environment, building on earlier ease of doing business initiatives. Reduction in fee structures and IT-based schemes will make it easier for MSMEs and others to access export benefits. How Will It Boost Exports? The FTP 2023 is aimed at providing policy continuity and a responsive framework. Since fiscal incentives are out of the reckoning because of WTO restrictions, FTP 2023 focusses on the continuation of duty remission schemes that are WTO compliant. That the FTP does not come with an end date is of great comfort to the industry. No uncertainty regarding the continuation of input duty remission schemes, such as the RODTEP and RoSCTL, and timely payments by the government, will help exporters do their business with more confidence. The FTP 2023 allows Indian intermediaries to carry out merchanting trade involving the shipment of goods from one foreign country to another without touching Indian ports. This will make possible merchanting trade of restricted and prohibited items. The policy will help exporters retain their export markets even when domestic restrictions apply on exports of certain items as they could then source them from another country and ship them to their buyers.

 

 

The FTP 2023 also tries to make life easier for exporters and traders, specifically MSMEs, in a number of ways. Measures have been announced to improve the ease of doing business through a reduction in transaction costs and e-initiatives. Initiatives such as districts as Export Hubs and the promotion of e-commerce exports, have the potential of translating into more exports. The FTP 2023 has some provisions that will specifically help MSMEs. It has reduced the threshold of minimum exports required for the recognition of exporters as status holders. Now, many smaller exporters can achieve higher status and avail of benefits that will reduce transaction costs. User charges have also been reduced for MSMEs under the popular Advance Authorisation and EPCG schemes and all charges have been brought within Rs. 5,000. The policy is upbeat about e-commerce with the government assuming a exports

potential annual export of $200-300 billion by 2030 from about $5-10 billion at present. All the FTP 2023 benefits are to be extended to e-commerce exports.

 

 

(SCOMET) licensing procedure are important features of the FTP 2023. So are adding PM Mega Integrated Textile Region and Apparel Park scheme to the list eligible to claim benefits of CSP and EPCG schemes, focussing on promoting districts as export hubs, introducing steps to get more online approvals and paperless filings to reduce physical interface. If the government stays vigilant and updates the FTP, responding to the needs of exporters, it could play an important role in helping meet the

In a major concession, the value limit for exports through courier service has been doubled to Rs. 10 lakh per consignment. $2 trillion export target. The FTP also announced the creation of zones with warehousing designated facilities to help e-commerce aggregators with easy stocking, customs clearance and returns processing. Measures such as a special one-time Amnesty Scheme for default in export obligations and streamlining of Special Chemicals, Organisms, Materials, Equipment and Technologies

 

 

Conclusion

 

India's total exports had already crossed $750 billion before the end of FY 2022-23 and are projected to touch $770 billion in FY 2022-23, the highest by the country ever. This will be an increase of over 13% on a yearly basis. "India's projected growth (in 2023) is more than double the projected growth for the world. The WTO's global trade forecast predicts growth in world trade to slow down to 1% in 2023, due to global uncertainties. Export scenario will said in its presentation. remain challenging," the government In the past 6 to 7 years, India's exports have risen by about 75%, as compared to 28% at the global level, data showed. During the period, engineering and agricultural exports rose 81% and 61%, respectively. Pharma and electronics goods rose 45% and 163%, respectively. Coming to marine products and toys, they rose 63% and 89%, respectively, the data showed. The $2 trillion target for exports set for 2030 by the FTP 2023 comprises $1 trillion each in goods and services exports. Set against the FY2022-23 projection of a combined goods and services exports of about $770 billion, the target of $2 trillion seems tough but not impossible to meet.