| Date: |
04-05-2010 |
| Subject: |
No foreign trade policy review this year: Govt |
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For the first time in decades, the Centre may give a go by to foreign trade policy review this year. Pending complete reversal of economic slowdown and turnaround in world trade markets, the central government will go ahead with current dispensation vis-à-vis fiscal incentives and policy support.
The customary foreign trade policy review that happens every April 1 was not done this time round. Even earlier indications of a FTP review coming up in August this year also may not happen.
Instead, the commerce ministry will take recourse to minor fine-tuning in existing five-year trade policy to aid revival in exports, expand its canvas and push for diversification in markets. Indian exports are set to touch about $170 billion for 2009-10.
The change in approach is driven by the fact that not many dramatic developments have been witnessed in international merchandise markets during August 2009 and April 2010. Further, indications are that a mid-term review of the five-year trade policy will be done during next financial year.
The government announced a foreign trade policy in August 2009 after the UPA came to power. “Policy changes are announced in response to material changes. If you want me to go through the motion of announcing policy changes just like that, I will do it. Does China announce FTP every year? Does the US do so? FTP stays in place. There will be minor changes which can be characterised by tweaking or fine tuning in the FTP,” commerce secretary Rahul Khullar told Financial Chronicle.
Khullar said there is no need for a new FTP now. “You can’t change policy every four months. We announced foreign trade policy in August 2009, what major policy changes can I make now?” he queried.
The commerce ministry is compiling final export figures for 2009-10 and depending upon outcome a decision will be taken on support to be given to few sectors that are still reeling under impact of global economic slowdown.
“We have done three sector-wise reviews already. I will look at the numbers. I’ll see who’s getting clobbered and then I’ll decide.
Every sector complains. I have to be able to differentiate between what is right and wrong. I can’t throw incentives at sectors that do not need it. Throwing money will not solve a problem. If we are to naively believe that exports have done well due to stimulus given by the government then you are wrong. That’s bogus,” said Khullar. The line pursued by the commerce secretary is in sync with the finance ministry’s thinking that calibrated withdrawal of support to both domestic and export manufacturing be done in a phased manner.
Source : mydigitalfc.com
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