Lok Sabha Question No. 23 (STARRED), answered on 2018-02-05
Subject: Promotion of Exports
Ministry: COMMERCE AND INDUSTRY
Asked by: R. VANAROJA, P. KUMAR

## GOVERNMENT OF INDIA MINISTRY OF COMMERCE & INDUSTRY (DEPARTMENT OF COMMERCE)

## LOK SABHA STARRED QUESTION NO. 23 TO BE ANSWERED ON 05 th  FEBRUARY,2018

## PROMOTION OF EXPORTS

## *23.   SHRIMATI VANAROJA R.: SHRI P. KUMAR:

Will the Minister of COMMERCE & INDUSTRY ( वा ͨणÏय एवं उɮयोग मंğी ) be pleased to state:

- (a) whether the  growth  in  exports  has  declined  during  the  last  three  years,  if  so,  the details thereof and the reasons therefor along with the plan to promote exports;
- (b) whether the Union Government has held a meeting with the State Governments and industry representatives to discuss ways to boost the country's exports;
- (c) if so, the deliberations made in the said meeting;
- (d) whether  the  small  and  medium  exporters  are  facing  several  issues  related  to  the Goods and Services Tax and if so, the steps taken by the Government to resolve the same; and
- (e) whether  the  exporters  have  sought  greater  support  to  improve  infrastructure  to increase competitiveness of their products  in  global markets and if so, the details thereof along with the response of the Government in this regard?

## ANSWER

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THE MINISTER OF  COMMERCE AND INDUSTRY (SHRI SURESH PRABHU)

- a) to  e):  A Statement is laid on the Table of the House.

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## STATEMENT REFERRED TO IN REPLY TO PARTS (a) TO (e) OF LOK SABHA STARRED  QUESTION  NO.  23 FOR  ANSWER  ON  05 th FEBRUARY,2018 REGARDING 'PROMOTION OF EXPORTS'.

- (a) The  details of merchandise and services exports during last three years are as below:

|                     | Exports ( in USD Billion)   | Exports ( in USD Billion)   | Total Exports   | %Change   |
|---------------------|-----------------------------|-----------------------------|-----------------|-----------|
|                     | Merchandise                 | Services                    |                 |           |
| 2013-14             | 314.41                      | 151.80                      | 466.21          | --        |
| 2014-15             | 310.34                      | 158.10                      | 468.44          | 0.48      |
| 2015-16             | 262.29                      | 155.14                      | 417.43          | -10.89    |
| 2016-17             | 275.85                      | 160.68                      | 436.53          | 4.58      |
| 2016-17 (Apr-Nov)   | 175.41                      | 106.07                      | 281.48          | --        |
| 2017-18 (Apr- Nov)* | 194.75                      | 109.88                      | 304.62          | 8.22      |

After reaching a peak in 2013-14, the exports continued to decline till 2015-16 following global trend of decline in growth of exports due to general economic slowdown  leading  to  lower  demand  in  international  markets  and  lower commodity prices. However, exports started increasing from the second half of 2016-17. In 2017-18 (April-December), the merchandise export growth has picked up further to 11.31%. Export Growth in 2016-17 was fairly broad based except textiles and allied  products and leather and leather manufactures. In 2017-18 too, among the major sectors, there has been good export growth in engineering  goods,  Petroleum  crude  and  products;  moderate  growth  in chemical and related products, and textiles and allied products; but negative growth in gems and jewellery. With world trade expected to grow at 4.2% and 4%  in  2017  and  2018  respectively,  the  prospects  for  exports  in  this  and coming year look bright.

Exports depend upon a multitude of global and domestic factors. In order to promote exports,  while on  one  hand  Government is improving trade  related infrastructure and ease of doing business in the country, it is also implementing a number of export promotion schemes including Merchandise Exports  From  India  Scheme  (MEIS),  Services  Exports  From  India  Scheme (SEIS),  Interest  Equalisation  Scheme,  Duty  Drawback  Scheme,  Market Access Initiatives Scheme (MAIS), etc. to mitigate the disadvantages faced by exporters  due  to  higher  cost  of  capital,  insufficient  infrastructure  and  high logistics costs.

## (b) & (c):

- i. Yes Madam. Apart from regular interaction with the State Governments and Trade  associations,  there  are  institutional  mechanisms  in  the  form  of  a Council  of  Trade  Development  and  Promotion  comprising  Ministers  of  the State Governments and representatives of Industry associations and a Board of  Trade  comprising  representatives  of  export  promotion  councils  and  trade associations to discuss export strategies for promotion of exports.
- ii. The 3rd meeting of the Council for Trade Development  and Promotion was held on 08th January, 2018 in New  Delhi with the participation of Industry/Trade Ministers from   states. The members of the Council from the States  placed  their  perspective  of  the  Trade  Policy  and  resolved  to  jointly address impediments which affect India's exports.
- iii.  Last  meeting  of  the  Board  of  Trade  was  held  on  20.6.2017  to  discuss  mid term review of Foreign Trade Policy.
- iv.  Besides,  another  meeting  of  the  States/UT  Governments  was  held  on 22.12.2017 in New Delhi with the Industry Secretary and Export Commissioners  of  States/UTs  to  sensitize  the  State  Governments  on  the formulation  of  State  export  strategies,  Agriculture  Exports  and  SEZ  related issues.
- v. A meeting  with  Stakeholders  and  Industry  representatives  was  also  held  in October 2017, where in measures to boost exports were discussed. All sector specific  export  promotion  councils  participated  in  the  meeting.  The  major suggestions  were  regarding  early  refund  of  GST  to  address  the  issue  of blockage of working capital, reduction of  GST  on job work and other items, addressing inverted customs duties and increase in rates of incentives under MEIS.
6. (d) Yes  Madam.  The  Government  has received  many  representations  from  the industry  including  from  the  Small  and  Medium  enterprises  regarding  the difficulties  being  faced  in  the  implementation  of  GST.  The  major  issue  was related to working capital blockage due to the process of upfront payment of GST, filing of returns,  GST rates on job work and refund of Integrated GST and Input Tax Credit (ITC). The Government addressed these issues through announcement  of  a  relief  package  for  exporters  in  October  2017.  Benefits under the Advance Authorization  Scheme, Export Promotion Capital Goods Scheme  and  100%  Export  Oriented  Unit    Scheme    were  extended  for sourcing inputs from abroad as well as domestic suppliers without payment of GST  and  Customs  Duty.    Exports  were  allowed  on  furnishing  of  Legal Undertaking (LUT), without the requirement of Bond/bank guarantee.  Further, GST on sale of scrips has been reduced to Zero from the earlier rate of 12%. In  addition,  merchant  exporters  have  been  allowed  to  pay  a  nominal  0.1% GST for procurement of goods from domestic suppliers for exports. GST on

job work in textiles sector, diamond processing in Jewellery sector and leather and  footwear  sectors  has  been  brought  down  to  5%.  The  Government  has also  taken  measures  and  issued  instructions  to  expeditiously  disburse  the refund of IGST paid on goods exported. Besides, GST council is meeting at regular  interval  to  address  concerns  of  industry  regarding  various  issues related to GST including rationalisation of GST rates, simplification in filing of GST returns, expediting the process of refunds of Integrated GST and Input Tax Credit for exporters.

(e)

- i. Yes  Madam.  The  Government  has  received  multiple  representations  from different sectors and members of industry to increase the support for specific products  to  offset  infrastructural  inefficiencies  and  other  factors  impeding exports.  Consequently,  at  the  time  of  Mid  Term  Review  of  Foreign  Trade Policy (FTP) 2015-20 in December 2017, additional annual incentives of Rs 2,743  Cr  for  Ready-made  garments  and  made-up  sector,  Rs  4,567  Cr  for other  labour  intensive  and  MSME  sectors  have  been  provided  under  the Merchandise  Exports  from  India  Scheme  (MEIS).  Further,  Government  has released a study 'LEADS-Logistics Ease Across Different States' which is a first  ever  sub-national  logistics  performance  index  focussing  on  perceptions about logistics and infrastructural gaps in different states so that Ministries of the Central and State Governments concerned can take actions for addressing these gaps.
- ii. Further,  a  new  Scheme  Trade  Infrastructure  for  Export  Scheme  (TIES)  has been launched w.e.f 01.04.2017 to address the export infrastructure gaps in the country. 10 proposals have been approved with total project cost of  Rs 135.3 Cr and an amount of Rs 47.2 Cr has been released.

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