Lok Sabha Question No. 802 (UNSTARRED), answered on 2019-06-26
Subject: Merchandise Export
Ministry: COMMERCE AND INDUSTRY
Asked by: Sudheer Gupta

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

## LOK SABHA UNSTARRED QUESTION NO. 802 TO BE ANSWERED ON  26 th  JUNE, 2019

## MERCHANDISE EXPORT

802.   SHRI SUDHEER GUPTA be

Will  the  Minister  of COMMERCE & INDUSTRY ( वािण᭔य एवं  उ᳒ोग मंᮢी ) pleased to state:

- (a) whether  it  is  true  that  despite  achieving  a  record  high  of  $321.02  billion  in  merchandise exports, the country missed its own target of $330 billion, if so, the details thereof and the reasons therefor;
- (b) the details of the steps being taken by the Government to increase merchandise exports;
- (c) whether the country has experienced a high trade deficit for merchandise goods for the year 2018-19;
- (d) if so, the details thereof and the reasons therefor; and
- (e) whether the  Government has  any  proposal  to increase FDI  through  schemes like  'Make  in India' by relaxing rules in FDI in several sectors and if so, the details thereof?

## ANWSER

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## THE MINISTER OF  COMMERCE AND INDUSTRY (SHRI PIYUSH GOYAL)

- (a): India has achieved a record high of 330. 07 US$ billion of merchandise exports in the year 2018-19, registering a positive growth of 8.75% as compared to the previous year.
- (b): Government has taken following steps to increase exports:
- i A  new  Foreign  Trade  Policy  (FTP)  2015-20  was  launched  on  1 st April  2015.  The policy,  inter  alia,  rationalised  the  earlier  export  promotion  schemes  and  introduced two  new  schemes,  namely  Merchandise  Exports  from  India  Scheme  (MEIS)  for improving export of  goods     and  'Services  Exports  from  India Scheme  (SEIS)' for increasing  exports  of  services.  Duty  credit  scrips  issued  under  these  schemes  were made fully transferable.

- ii The Mid-term Review of the FTP 2015-20 was undertaken on 5th December, 2017. Incentive  rates  for  labour  intensive  /  MSME  sectors  were  increased  by  2%  with  a financial implication of Rs 8,450 cr per year.
- iii A new Logistics Division was created in the Department of Commerce to coordinate integrated development of the logistics sector.  India's rank in World Bank's Logistics Performance Index moved up from 54 in 2014 to 44 in 2018.
- iv Interest  Equalization  Scheme  on  pre  and  post  shipment  rupee  export  credit  was introduced from 1.4.2015 providing interest equalisation at 3% for labour intensive / MSME sectors. The rate was increased  to 5%  for MSME  sectors  with  effect  from 2.11.2018 and merchant exporters were covered under the scheme with effect from 2.1.2019.
- v Various measures for improving ease of doing business were taken. India's rank in World Bank 'Ease of doing business' ranking improved from 142 in 2014 to 77 in 2018 with the rank in 'trading across borders' moving up from 122 to 80.
- vi A new scheme called 'Trade Infrastructure for Export Scheme (TIES)' was launched with  effect  from  1 st April  2017  to  address  the  export  infrastructure  gaps  in  the country.
- vii A comprehensive 'Agriculture Export Policy' was launched on 6th December, 2018 with an aim to double farmers' income by 2022 and provide an impetus to agricultural exports.
- viii A new scheme called 'Transport and Marketing Assistance' (TMA) scheme has been launched  for  mitigating  disadvantage  of  higher  cost  of  transportation  for  export  of specified agriculture products.
- ix A  new  scheme  called  Scheme  for  Rebate  of  State  and  Central  Taxes  and  Levies (RoSCTL)  covering  export  of  garments  and  made-ups  was  notified  on  7.3.2019 providing refund of duties/taxes at higher rates.

(c)  &  (d): The  trade  deficit  of  merchandise  goods  increased  from  162.05  US$  billions  in 2017-18  to  183.96  US$  billions  in  2018-19.  The  trade  deficit  depends  upon  relative fluctuations  in  the  import  and  export  of  different  commodities  due  to  various  global  and domestic factors such as demand and supply in domestic and international markets, currency fluctuations, trade agreements between competing exporting countries with export destination countries,  non-tariff  barriers  by  export  destination  countries,  cost  of  credit,  logistics  costs, etc. Trade deficit during 2018-19 has increased primarily due to higher imports of petroleum

crude  and  products,  electronic  goods  and  machinery  items  and  less  export  of  gems  and jewellery, textiles items and marine products.

(e): Government has put in place a liberal and transparent policy for FDI, wherein most of the  sectors  are  open  to  FDI  under  the  automatic  route.  The  Government  reviews  the  FDI policy on an ongoing basis and makes necessary changes from time to time to ensure that India remains attractive and investor friendly destination. FDI in various sectors is allowed in a  calibrated  manner  after  having  consultations  with  stakeholders,  including  concerned Ministries/ Departments, State Governments, apex industry chambers, Associations and other organizations, and taking into consideration their views/comments.

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