New Delhi: India is planning to move beyond the traditional subsidy model to boost exports, as it looks to evaluate exporters based on their consistency, compliance and overall growth to India’s export ecosystem.
Under the Goverment’s New Trade Policy, the Director General of Foreign Trade (DGFT) is looking to evaluate exporters as per their Importer Exporter Code (IEC). The IEC, a unique 10 digit code issued to exporters will be evaluated over a five year period to create an index that could judge their performance. The data is expected to be complied over the next year to support the “acceleration of new market for diversification, bring more exporters.”, DGFT chief Ajay Bhadoo told ANI.
This index is expected to address the accusations of subsidizing exports, but rather promote them based on the company’s export volumes.
Under the New Trade Policy, the government is looking at addressing various long-standing reforms, including those for Special Economic Zones.
The Union cabinet has also approved the Export Promotion Mission (EPM) a new structural reform with an outlay of ₹25,060 crore to support exporters using a single, outcome-based, and digital-driven framework. This is aimed at supporting MSMEs, first-time exporters and labour-intensive sectors to boost their competitiveness in the global markets,
For boosting MSME exports, the government is also looking to enhance the Mutual Credit Guarantee Scheme for MSMEs (MCGS-MSME), providing up to ₹ 100 crore for equipment and machinery with collateral-free loans up to ₹10 lakh also available for micro and small enterprises (MSEs).
Though these reforms could take time, the effectiveness of these reforms will depend on how seriously the DGFT aims to implement the reforms. Creating a formula for the index that is agreeable to everyone could be a tough challenge, as the DGFT is expected to balance the needs of MSMEs, the government’s policies and international trade obligations.
