Covid impact: Government extends current foreign trade policy until September 30

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The Union Department of Commerce on Wednesday announced the extension of the existing foreign trade policy for another six months to support exporters in the face of uncertainties related to Covid-19. The policy was due to expire on March 31.

Last year, the government extended the 2015-20 foreign trade policy until March 31, 2021, to help exporters weather the covid-19 outbreak. Through the extension, it had then continued to offer existing incentives under various export promotion programs.

In the past, the government had said the new policy would come into effect from April 1, 2021 for a period of five years. It had also organized meetings with relevant stakeholders.

“In view of the unprecedented situation arising from the ongoing novel covid-19 pandemic, the government has decided to maintain the benefits of various export promotion programs by extending the existing foreign trade policy for another six months, c that is, until September 30, 2021. which will ensure the continuity of the political regime,” an official statement said.

Trade standard had reported the development on Wednesday.

The exemption from payment of the Integrated Goods and Services Tax (IGST) and compensation tax on imports made under prior authorizations and by export-oriented units (EOUs) has also been extended until to September 30. “Similarly, the validity period of status holder certificates is also extended. This will allow status holders to continue to enjoy the specified facilities/benefits,” an official statement read.

A delay in developing a new five-year international trade roadmap will give policymakers more time to make decisions on critical policy issues. It will also give exporters more time to prepare amid the ongoing uncertainty related to covid-19.

“It is now clear that the industry will have to wait another 6 months for the new policy. That said, the government may consider clarifying key areas of FTP that the industry is looking forward to, including RODTEP (Remission of Duties and Taxes on Export Commodities) rates, continuation of SEIS (Service Exports from India Scheme) and their rates. , etc said Abhishek Jain, partner at EY.

According to official data, in the first 11 months of the current fiscal year, merchandise exports contracted 12% year-on-year to $256.18 billion. Similarly, imports also fell by (-) 23.11% to $340.80 billion. As a result, a trade deficit stood at $84.6 billion from April to February.

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