Moving from ‘Make in India’ to ‘Made in India’ : Mr. Rizwan Soomar

MUMBAI: It is heartening to note that India’s cumulative services and merchandise exports are expected to cross $760 billion this year. It will be to the significant credit of the Government’s integrated efforts to incentivise domestic manufacturing, build capacity for small and medium businesses and create the logistics infrastructurerequiredtoenhanceconnectivity.Asthe Government gears up to actualize its $2 trillion export target for 2030, the new Foreign Trade Policy (FTP) aptly encompasses a futuristic and transformative ecosystem that will propel export volumes of domestic goodsfromthecountrytotheworldeffectively. Reducing friction, improving efficiency

ForeignTradePolicy2023capturesabroadrangeof trade facilitation measures that will benefit the entire export ecosystem. Procedural reforms that integrate technology to simplify compliances are being implemented by the Government across sectors in the foreign policy, including logistics and infrastructure, through platforms like Gati Shakti National Master Plan Portal and Unified Logistics Interface Platform (ULIP). Additionally, the push for creating seamless, unified, rule-based IT systems to accelerate clearances under the automatic route will facilitate automaticapprovalsforvariouspermissions.

Introduction of online approvals for multiple processes under the FTP, including e-Certificate of Origin and issuance of Electronic-Importer Exporter Code,willnotonlystreamlinethecompliancechainbut will also reduce the processing time for authorizations. To add to that, the extension of the export obligation period will contribute significantly to the ease of doing business in the country and greatly simplify the compliance ecosystem. Such enabling measures will naturally harmonise the integration of Indian businesses and MSMEs in domestic and global valuechains.

India has signed several key Foreign Trade Agreements (FTAs) over the past couple of years, and some more are in the offing. Combining competitive trade agreements with the establishment of a robust network of export promotion institutions all the way down to the district level is a welcome development that will help India-made products reach international markets.

The decentralized approach suggested in the policy focuses on providing global platforms to products and services at the domestic district level. This, together with the establishment of a District Export Promotion Committee to design and implement district-specific ‘export action plans’, will provide critical touch points for local businesses who are looking at exports as the panaceaforbusinessgrowth.

Merchanting Trade

The introduction of merchanting trade –themovementofgoodsbyseafromoneforeigncountry to another with the help of India based intermediaries but without berthing at ports in India – in the policy, and its eligibility for certain remission schemes, is yet another strategic move to provide fillip to and strengthen India’s establishment as a global trade hub, with linkages to maintain market continuityincaseof domestic supply shortages. It will also allow entrepreneurs and businesses in India to use locations like GIFT city in Gandhinagar as major merchanting hubs and help India emerge as a preferred merchanting trade hub in South Asia in the medium-to-long term, comparable to Dubai,Singapore,andHongKong.

Recognition of eCommerce Exports

The inclusion of provisions for cross-border trade of goods and services from India and the promotion of ecommerce will create a host of opportunities for small businesses looking to sell in global markets. The policy extends all the benefits that were earlier limited to conventionalofflineexports,toe-commerceexportstoo. The establishment of e-commerce export hubs (ECEHs), as proposed in the policy, will stand to benefit fromindustryparticipationfrommajore-commerceand logistics players, with the active involvement of the CentralorStateGovernments.

These developments, together with the sharpened focus in the policy on sustainability, compliance, and ease of doing business, will give a significant boost to India’sexports.

Rupee Trade and Amnesty Scheme

Additionally, FTP commendably concretizes the Government’s vision of establishing the rupee as a medium of exchange in cross-border trade through provisions enabling export incentives and obligations to be realized in the rupee. Such provisions will prompt India’seconomicdevelopmentasitwillprimarilylower transaction costs and increase price transparency, further allowing exporters, opting for local currency settlement, to be at par with those choosing US Dollar as the preferred currency of trade. It will also catalyse the integration of small businesses in global value chainsandfurtherExport-ImportfromIndia.

Separately, the special one-time Amnesty Scheme is a pragmatic step towards closing authorization of exporters, who have been unable to meet their export obligations under the Export Promotion Credit Guarantee(EPCG)andAdvanceAuthorisations.

Ultimately, as India continues to witness strong export growth amidst global headwinds, FTP 2023 in conjunction with the National Logistics Policy announced last year, will be transformational in not only sustaining the current growth momentum but also in establishing an export oriented robust regulatory framework to help India exceed its export targets.

Author : Mr. Rizwan Soomar, CEO & MD India Subcontinent & Sub-Saharan Africa, DP World.