With the new Foreign Trade Policy (FTP) to be rolled out soon by the government, certain changes are sure to be on the cards - giving a boost to the export of research and development (R&D) services. In addition, the single export benefit scheme - Remission of Duties and Taxes on Exported Products (RoDTEP), which was launched by the government two months ago that promised to change the trade battle, had initially left the exporters hopeful. Unfortunately, the government has failed to console the exporters by further delaying the declaration of the subsidy rates, causing a stir in the community. We are hopeful that the government will soon come out with the rates extending the much-needed support to the exporters.
The 2021 Union Budget laid down certain provisions for the upliftment of MSMEs to help them become one of the growth engines of our economy. Digitization of these MSMEs is one key challenge that is being faced by the government. Experts believe that in the near future, digitized MSMEs will emerge who will, in turn, churn greater productivity and deliver utmost efficiency.
Trade Update
14TH MARCH
# 106
The soon-to-be-announced New Foreign Trade Policy 2021-26 may give a special emphasis to export of research and development (R&D) services. A separate section focusing on R&D services exports is being planned, a government official said.
Since 1990, on an average, India has had an overall trade deficit. Even so, for the period April–September 2020, India witnessed a trade surplus and is likely to post a current account surplus of 2% of GDP for 2020-21. However, this might not be a reason to rejoice.
Import, Export, Trade for MSMEs: The non-implementation of the new export benefit scheme Remission of Duties and Taxes on Export Products (RoDTEP) is hurting exporters making them uncompetitive in the international market. Earlier exporters were given a wide array of input tax benefits such as Merchandise Exports from India Scheme (MEIS) and others. These were all withdrawn by the government last year, and a single export benefit scheme RoDTEP that was applicable on all export goods was introduced, effective from January 1st, 2021.
Credited with taking industrialisation to the rural parts of the country, micro, small and medium enterprises (MSMEs) are one of the major growth engines of the Indian economy. The 2021 Union Budget too laid down several provisions for such enterprises to boost their capabilities and increase ease of business. Given that they contribute roughly 30 percent to the country’s GDP, the government has been vocal about the support it is extending to help MSMEs scale ahead. This is especially in the case of digitisation as it has helped companies strengthen their organisational efficiency and avoid delays in compliance protocols such as paying taxes. However, several enterprises are yet to join the digital bandwagon, raising questions about their reluctance around digital adoption and compliance.
The government is working on formulation of standards for AYUSH (Ayurveda, Yoga, Unani, Siddha and Homoeopathy) products with an aim to augment its international trade by ensuring quality of goods and services, an official said.
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