Lok Sabha Question No. 2664 (UNSTARRED), answered on 2021-08-04
Subject: Promotion of Exports
Ministry: COMMERCE AND INDUSTRY
Asked by: Sarmistha Sethi

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

## LOK SABHA UNSTARRED QUESTION NO. 2664 TO BE ANSWERED ON 04 th AUGUST, 2021 TO BE ANSWERED ON 04

## PROMOTION OF EXPORTS

## 2664.  SHRIMATI SARMISTHA SETHI:

Will the Minister of COMMERCE & INDUSTRY ( वािण�य एवं उ�ोग मं�ी ) be pleased to state:

- (a) the  details  of  all  schemes/  interventions  and  steps  taken  by  the  Government  for  the promotion of Indian exports in the global trade;
- (b) the details of  reforms  undertaken  in  the  industrial  policy for  improving  business environment and bringing foreign investments in India; and
- (c) the details of the steps being taken by the Government to strengthen India's manufacturing sector vis-a-vis other nations with regard to better performance in Free Trade Agreements?

## ANSWER

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## THE MINISTER OF STATE IN THE MINISTRY OF COMMERCE AND INDUSTRY (SMT. ANUPRIYA PATEL)

- (a) Government is committed for promoting Indian exports in international markets and suitable interventions are done from time to time. The key schemes/interventions taken are:
- i. The Foreign Trade Policy has been extended upto 30.09.2021 to provide a stable regime during the Covid-19 pandemic.
- ii. Schemes such as  the  Advance Authorization  Scheme and  the Export Promotion  Capital Goods (EPCG) Scheme are being implemented to enable duty free import of raw materials and capital goods for export production.
- iii. The  Interest  Equalization  Scheme,  which  provides  pre  and  post  shipment  Rupee  export credit has been extended upto 30.09.2021.
- iv. Remission  of  Duties  and  Taxes  on  Exported  Products  (RoDTEP)  scheme  has  been operationalized for exports with effect from 01.01.2021.
- v. It has been decided to extend the Rebate of State and Central Levies and Taxes (RoSCTL) Scheme for apparel and made-up exports till March 2024.
- vi. Transport  and  Marketing  Assistance  (TMA)  scheme  for  specified  agriculture  products provides assistance for the international component of freight and marketing of agricultural

produce and to promote brand recognition for Indian agricultural products in the specified overseas markets.

- vii. A common digital platform for Certificate of Origin (CoO) has been launched to increase Free Trade Agreement (FTA) utilization by exporters.
- viii. In  order  to  leverage  the  full  export  potential  of  our  vast  country,    Districts  are  being promoted as Exports Hubs by identifying products and services with export potential in each district, addressing bottlenecks for exporting these products/services and supporting such local  exporters/manufactures  through  institutional  and  strategic  interventions.  District specific export action plans for 478 districts have been prepared.
- ix. Exports  of  services  is being  supported  through  negotiating  meaningful  market  access through multilateral, regional and bilateral trade agreements, through participation in and organization of international  fairs/exhibitions  like the Global Exhibition on Services.  An 'Action Plan for Champion Sectors in Services' is being developed  to give focused attention to identified Champion Services Sectors through  identified nodal Ministries/Departments
- x. Assistance is being extended to exporters under the Market Access Initiative (MAI) scheme for  various  activities  such  as  export  market  research  &  product  development,  product registration, organizing / participating in fairs, exhibitions and Buyer Seller Meets (BSMs) abroad, Reverse Buyer Seller Meets etc.
- xi. In order to have a coordinated and focused attention on development of export infrastructure, a  working  group  on  infrastructure  up-gradation  has  been  constituted  under  National Committee on Trade Facilitation  (NCTF)  and  a National Trade  Facilitation Action  Plan (NTFAP)  has  been  formulated.  This  includes  measures  for  improving  road  and  rail connectivity to ports and smart gates at sea ports.
6. (b) Government is continuously engaged in strengthening Indian industry through 'ease of doing business' for improving the business environment and attracting foreign investments. Details on measures taken in the recent past are as in the Annexure .
7. (c) To make domestic manufacturing globally competitive and to create global champions  in manufacturing,  Production  Linked  Incentive  (PLI)  Schemes  in  13  sectors  are being implemented. The  Government  has  initiated  a  review  of  some  of  the  existing  Free  Trade Agreements (FTAs) to maximize its export potential to benefit domestic industry as well as to  make  them  more user friendly,  simple  and  trade  facilitative. In  addition,  bilateral  trade negotiations have been initiated with a number of countries.

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## ANNEXURE

## REFERRED TO IN REPLY OF PART (B) OF THE LOK SABHA UNSTARRED QUESTION NO. 2664 FOR ANSWER ON 04.08.2021

It has been the continuous endeavor of the Government of India to put in place an enabling and investor friendly Policy. In the  last two years alone, the  following reforms  in the  Foreign Direct Investment  (FDI)  policy  have  been  undertaken  across  sectors  such  as  Coal  Mining,  Contract Manufacturing, Digital Media, Single Brand Retail Trading, Intermediaries or Insurance Intermediaries, Civil Aviation, Defence and Insurance:

(i) To  liberalize  and  simplify  FDI  policy  for  providing  Ease  of  doing  business  and  attract investments, vide Press Note 4 (2019) dated 18.09.2019, following FDI Policy reforms have been undertaken:

- a) 100%  FDI  under  automatic  route  have  been  permitted for  coal  mining  activities including associated  processing  infrastructure  that includes  coal  washery,  crushing,  coal  handling, separation  (magnetic  and  non-magnetic).  Earlier,  100%  FDI  under  automatic  route  was permitted in coal mining for captive consumption only.
- b) Under the Manufacturing sector, in order to provide clarity on contract manufacturing, it has been decided to allow 100% FDI under automatic route in contract manufacturing and FDI is now  permitted  under  automatic  route  in  contract  manufacturing  through  a  legally  tenable contract.
- c) Local sourcing norms have been eased for FDI in Single Brand Retail Trading (SBRT) and all procurements  made  from  India  by  SBRT  entity  shall  be  counted  towards  local  sourcing, irrespective of whether goods procured are sold in India or exported. Further, sourcing of goods from India  for  global  operations  can  now  be  done  directly  by  the  SBRT  entity  or  its  group companies or indirectly through third party. As per the new policy, entire sourcing from India for  global  operations  shall  be  considered  towards  local  sourcing  requirement  as  opposed  to incremental sourcing previously. Now, retail trading through e-commerce can be undertaken prior to opening of brick and mortar stores, provided the entity opens brick and mortar stores within 2 years from date of start of online retail.
- d) As per the FDI policy,  for 'News  &  Current Affairs', 49% FDI under Government route is permitted  in  case  of  TV  channels,  and  26%  FDI  is  permitted  in  case  of  print  media  with government approval. However, there was no specific provision pertaining to digital media. In order to address this gap, 26% FDI has been permitted under government route for uploading/ streaming of News & Current Affairs through Digital Media.

(ii ) Insurance Sector: Vide Press Note 1(2020) dated 21.02.2020, 100% FDI has been permitted in Intermediaries  or  Insurance  Intermediaries  including  insurance  brokers,  re-insurance  brokers, insurance consultants, corporate agents, third party administrator, Surveyors and Loss Assessors and such other entities, as may be notified by the Insurance Regulatory and Development Authority from time to time. Vide Press Note 2(2021) dated 14.06.2021 the permissible FDI limit was raised from 49% to 74% in Insurance Companies under the automatic route and allow foreign ownership and control with safeguards.

(iii) Civil Aviation : Vide Press Note 2 (2020) dated 19.03.2020, Foreign Investment(s) in M/s Air India Ltd. has been permitted up to 100% under automatic route by NRIs, who are Indian Nationals

(iv) Curbing  opportunistic  takeovers/acquisitions  of  Indian  companies  due  to  the  COVID-19 pandemic:  In  order  to  curb  opportunistic  takeovers/acquisitions  of  Indian  companies  due  to  the COVID-19 pandemic, vide Press Note 3(2020) dt. 17.04.2020, Government amended the FDI policy according to which an entity of a country, which shares land border with India or where the beneficial owner of an investment into India is situated in or is a citizen of any such country, can invest only under the Government route. Further, in the event of the transfer of ownership of any existing or future FDI in an entity in India, directly or indirectly, resulting in the beneficial ownership falling within the restriction/purview of the said policy amendment, such subsequent change in beneficial ownership will also require Government approval.

(v) Defence Sector: The FDI policy amendments, notified vide Press Note 4 (2020 series) dated 17.09.2020, have been carried out to realize the vision of an Aatmanirbhar Bharat. Now, FDI in defense  sector  is  allowed  up  to  74%  through  automatic  route  (from  earlier  49%)  for  companies seeking  new  industrial  licenses.  FDI  beyond  74%  and  up  to  100%  will  be  permitted  under Government route. For existing FDI approved holders/defense licensees, infusion of fresh foreign investment up to 49% resulting in change in equity/ shareholding pattern can be done by making declaration within 30 days (earlier Government approval was required). Now, foreign investments in the defense sector shall be subject to scrutiny on grounds of National Security.

(vi) Vide  Press  Note  1(2021)  dated  19.03.2021,  clarity  has  been  provided  on  downstream investments made by Non-Resident Indians (NRIs) according to which Investments by NRI(s) on a non-repatriation basis as stipulated under Schedule IV of FEM (Non Debt Instrument) Rules 2019 are deemed to be domestic investments at par with the investments made by residents.

2. States have been encouraged to carry out reforms in ease of doing business and reducing compliance burden.  Based on a detailed analysis of 5 states i.e. Gujarat, Uttar Pradesh, Karnataka, Tamil Nadu and Maharashtra, seven parameters have  been  identified  i.e. single window system, Land/property, tax compliance, labor compliance, rationalizing inspection mechanism, logistic cost, dispute resolution mechanism for further reform.

3. Measures taken by the Government on FDI policy reforms have resulted in increased FDI inflows  in  the  country.  FDI  inflow  in  India  stood  at  US$  45.15  billion  in  2014-15  and  has continuously increased since then. FDI inflows increased to US$ 55.56 billion in 2015-16, US$ 60.22 billion in 2016-17, US$ 60.97 billion in 2017-18, US$ 62.00 billion in 2018-19, US$ 74.39 billion in the year 2019-20 and India registered its highest ever annual FDI inflow of US$ 81.72 billion (provisional figures) in the financial year 2020-21.