NEW DELHI: A high-level advisory group (HLAG) on trade and policy has recommended simpler regulatory and tax framework for overseas investment funds, allowing individual investment from abroad in Indian debt and capital markets, and state-specific policies to facilitate foreign direct investment in agro-processing.
The group also favours a single ministry for the regulation of medical devices across the value chain, an independent commission on pharmaceuticals and biotechnology, a simpler medical visa regime and health insurance portability of social security entitlements across countries.
The group — led by Surjit Bhalla, a former member of the Prime Minister's Economic Advisory Council, and formed last year in September — has also proposed making Invest India the centralised authority for issuing licences. This authority should be made answerable to an apex decision-making body, headed by a select set of ministers who can approve investment, it suggested.
“The report, though planned earlier, has come at an opportune time when India’s exports and investments need a push. The report outlines the strategy for that,” said a member of the HLAG. The report, which proposes ways to double India’s exports to $1 trillion by 2025 from $500 billion in 2018, will be made public on Wednesday.
Export push
FTA In order to give a leg up to slowing exports, the group has suggested the commerce department to engage an institution, outside the ministry, with expertise in trade, economics and big data analytics, to create a prediction system. It has also proposed enhancing the capital base of the EXIM Bank by Rs 20,000 crore by 2022 and that of the Export Credit Guarantee Corporation by Rs 350 crore.
“India should aim to bring down the cost of capital to the average of 10 best performing OECD countries. The median real policy rate of 30 countries in August 2019 (excluding Argentina, Mexico and Turkey) was minus 0.7 %, with India having the highest rate at 2.2%,” the group said in the report.
An apex trade promotion organisation established as a separate entity replacing the Directorate General of Foreign Trade, India Trade Promotion Organisation and the Trade Promotion Council of India, and a world-class ‘war room’ to realise single-window clearance are among other key ideas in the report.
The recommendations come at a time when India’s exports shrank 6.57% in September. The group has also pushed for a database detailing the utilisation of India’s various trade agreements, a five-year programme for negotiation of free-trade agreements and an advocacy programme to spread awareness about potential trade pacts.
Besides identifying products where India has an export advantage to build up domestic competitiveness in these products, the panel also wants the government to “begin process of identifying and resolving non-tariff barriers which prevent Indian exports from accessing key importing nations”, starting with the major countries with which India has FTAs.
With many export schemes under the radar of the global trade watchdog, the group has suggested incentives, especially for the electronics sector, be delinked from exports.
Source: economictimes.indiatimes.com