Inter-ministerial talks on new FTP soon

The commerce ministry will begin discussions with other ministries in the next few days on a new foreign trade policy that is expected to be unveiled by August and will be in force for five years.

While the directorate general of foreign trade has completed consultations with the industry and exporters, it will start interacting with the different ministries like agriculture, finance, micro, small and medium Enterprises, steel and environment.

Revenue department in the finance ministry holds the key for extending benefits to exporters who are facing the brunt of recession in several major economies.

It is the revenue department that takes a decision on the level of tax refunds offered through schemes like Duty Entitlement Pass Book, Duty Drawbacks etc.

"In the next 10-15 days, we will start discussions with departments of economic affairs, revenue and Directorate General of Export Promotion for the new policy. . . the FTP is expected to be unveiled in August," a senior government official said.

The issues which would be taken up with the finance ministry officials include extension of DEPB and easing of duty refund procedures, the official said.

The United Progressive Alliance government, in its previous term, had announced an interim FTP in February which would be continue till a regular FTP is unveiled.

Exporters and industry chambers have demanded several fiscal sops including increasing subvention and drawback rates to boost exports that have suffered due to the economic downturn.

Exports contribute 17-18 per cent of India's GDP, giving employment to 50 million people.     After recording an impressive growth of over 30 per cent for the April-September period of 2008-09, exports showed a negative trend since October last fiscal.

The country managed to post exports worth $168 billion in 2008-09, a growth of just 3.4 per cent from the previous fiscal.