The existing foreign trade policy is likely to continue till the end of this year as the Directorate General of Foreign Trade (DGFT) has floated an internal proposal for extending the current FTP provisions till December 31. Now, the Government is examining the option to address uncertainties faced by exporters due to delay in the new policy.
The FTP includes both an annual plan and a five-year long-term policy. Though FTPs are usually announced soon after the Union Budget is presented, the new Government, which came in power in May, has not yet been able to do so. Heavy work agenda of Commerce Ministry and elections in a number of States have resulted in the delay to present new FTP.
The delay in new FTP has started impacting domestic exports as exporters are unsure about the continuity of the existing export incentive schemes, like the focus product and focus market schemes, which give them a competitive edge in the global market. After recording a double-digit growth in May and June, export growth slowed down in subsequent months with a growth rate of just 2.73 percent in September.
Although most of the existing incentive schemes will continue till a new policy is announced. Therefore, a formal extension of the schemes is required to provide confidence to exporters that the schemes will not change before the given date.