FTAs with key nations will boost exports, attract more investments: FIEO
Inking free trade agreements (FTAs) will India’s major trading partners such as the United States, United Kingdom, European Union, Australia, New Zealand, Canada, Israel, among others, will boost exports help in attracting more foreign investments into the country, Federation of Indian Exports Organisation (FIEO) said on Monday.
“One of the reasons for the success of Vietnam, in attracting investment relocating units, is its effective FTAs with the rest of the World. It is extremely encouraging that the government is moving simultaneously with many trade partners in this direction. We are confident that the Industry will play a proactive role in such negotiations will give required elbow room to our negotiators,” FIEO’s new President A Sakthivel said in a virtual briefing.
India is likely to kick start formal negotiations for FTAs with the UK EU by the end of 2021, soon after the preparatory work is completed. India is also focusing on resuming trade talks with Canada, Australia. Negotiations with new countries such as Israel are also being considered.
While the Centre’s $400 billion target for exports for 2020-2021 looks ‘little ambitious’, Sakthivel said that in order to achieve this, it would require aggressive marketing strategy venturing into new markets. According to official data, merchandise exports in the first two months of the fiscal year was $62.9 billion, up 12 per cent as compared to April-May 2019.
FIEO has urged the government to look into increasing market access initiative funds formulate a scheme for marketing with a minimum corpus of Rs 1,000 crore annually, to take exports to $1 trillion in the next five years.
Since traditional export sectors have not been losing their share in the global market amid stiff competition from other nations, there is also a need to push growth in sunrise sectors such as electronics, machinery, pharma, networking products, among others, according to the apex trade promotion organisation.
Sakthivel further said that delay in issuing refunds on exports has resulted in limiting liquidity for exporters.
For instance, as far as the Remission of Duties Taxes on Exported Products (RoDTEP) scheme is concerned, in the absence of the rates, exporters are perplexed as to how they compute the benefit in the scheme for quoting for new orders. The liquidity of exporters have also been affected as they could not get refunds for exports made from 1st January, 2021 onwards, FIEO said, adding that there is also a need to release the benefits under Merchandise Exports from India scheme (MEIS) scheme for April-December 2020.