On India’s New Foreign Trade Policy 2015- 2020 : Is it old wine in a new bottle?

Opinion: Our World Our Times

Anoop Swarup

Anoop_Swarup
Anoop Swarup

Though, observed by some trade analysts as an ‘old wine in a new bottle’ and even as ‘less wine in the new bottle’ the market reacted favorably to a brand new Foreign Trade Policy 2015 to 2020 where an ambitious export target of 900 billion dollars highlights a visible ‘Make in India‘ push after almost a year’s delay in bringing out the Export Policy.

The vision of Prime Minister Narendra Modi does find a place as the stress on improved and better quality exports push through systemic and systematic reforms so as to be globally competitive, sustainable and environment friendly processes, promoting of defence exports, delisting and delicensing of many items, joint venture approach to many of the products can be seen as a boost to manufacturers whence new production lines, expanded negative list, inclusion of a a whole lot of service exports such as hospitality, medical tourism, wellness and related domains may broaden our approach from the traditional IT and Software related exports.

It is also worth a mention that it is merchandise exports that account for about one fifth of our 2 trillion dollar economy as of now and the Merchandise Export from India Scheme (MEIS) incentives for export to specific goods for specific markets may appear to be a more focused attempt at gaining the global export market share. Similarly the Services Export from India Scheme (SEIS) to replace the erstwhile Serve from India Scheme attempts a push at sectors such as medical tourism, accountancy and architecture.

The incentives under MEIS and SEIS will be in the form of fully transferable duty credit scrips and the Exporters will be able to use these scrips to offset service tax, excise duty or customs duty as was the case in the past.

Incidentally India’s service sector had voiced its demand for parity with the merchandise sector as many sectors do not import and were not able to use the incentives. The e-commerce-enabled exports of handloom products, books, leather footwear, toys and fashion garments through couriers or foreign post offices will also get the benefit of MEIS. Though the Policy makes a spirited effort to revive the special economic zones and the government’s extended export incentive schemes for both goods and services to units in SEZs, it may well be left to posterity for any productive results as all measures in the past have been inconsequential.

The export-obligation period for items related to defence, military stores, aerospace and nuclear energy will be 24 months instead of 18 and the reduced export obligation for those procuring capital goods domestically to 4.5 times imports as against six times under the export promotion of capital goods scheme (EPCG), may well encourage the ailing domestic capital goods industry. It is hoped that the Policy will help exporters develop productive capacities for both local and global consumption and concerning the rules of origin it is a hallmark decision to allow manufacturers who are also status holders to self-certify their manufactured goods as originating from India.

One may mention that a broad outlook on the policy front may turn into a great foresight for reforms that may result in transformational bonanza for the country. While working for the Ministry of Finance in North Block one was asked by the then Finance Minister in 2003 for a transformational idea just a couple of days before the Budget Day and as a brainwave at the spur of the moment a quick cabinet note was prduced on exemption to the laptops that bought a mere 90 crore worth of revenue through their baggage by any number of Indians travelling abroad in larger interest of facilitating our software exports. Yes that idea was an instant hit with a far-sighted Minister and we had a policy that was emulated by many countries in the days to come and the result was there before us in the form of billions of dollars generated by our software exports a decade thereafter. As a passing I may mention that all the noise we have on the Land Bill that ushers in the much touted land reforms are not a new invention of a new government but has been in vogue in many of the States already, as they have plenty of waste land identified by the respective infrastructural corporations and being allocated to the investing industries by the various Industry Centres and clusters where the only issue of caution for the concerned States is that these allocations should neither be at the cost of fertile agricultural land nor the ecology or the degraded forests awaiting afforestation.

It is pertinent to briefly mention here that though we promote in our country labour intensive manufacturing policies, we should not undermine new automation for improved quality products, simplifying of transactions and ease of doing business should not be in lieu of better compliance, more time to exporters though welcome should not be underplaying export deadlines, though multiplicity of schemes are being done away with we should not be sacrificing special treatment for the promotion of certain indigenous industries, the inclusion of interest subvention for 2015-16 already on board should not be at the cost of bad debts liability on the nation, new products and lines introduced based on research and data should be only on merits and not dubious considerations to serve vested interests as is the case more often than not.

India’s export of services to the world stands at US $ 145 billion, compared to the merchandise exports of over US$ 300 billion and the Policy claims to increase the share from a mere 2% to 3.5% by 2020, a significant move to be a global player. New FTP has a clause for its review in two-and-half years, then perhaps the doubling of overseas sales through exports may be reviewed. It may be seen that the simplified policy collapses five earlier schemes for promotion of merchandise goods in one single program. It also revamps promotion of services through reduced transaction costs for exports. The incentives to special economic zones as also e commerce do get a boost but it is to been as to how much really translates into actual output in real rupee terms for our exports. The Commerce and Industry Minister Nirmala Sitharaman may have done well when it comes to ensuring ease of doing business but the real measure of success will only be judged through a boost in exports and the creation of new jobs as claimed by her. Though hailed as pathbreaking and visionary in a globally competitive world it is to be seen as to how the promotion of country’s value added products and services would really translate into actionable reforms in the backdrop of a further contraction of almost 15% in our exports in the last few months. Nirmala Sitharaman unfortunately has no control on the macroeconomic factors such as global slowdown and appreciation of the rupee against a basket of currencies that ironically would make a real impact on the “Make in India” story rather than just a well intended Export Policy document brought out by her as we have seen in the past with many such Export Policies.

Smriti Irani filmed trying clothes at a popular clothing store in Goa?

Newsroom24x7 Desk

smriti iraniPanjim (Goa): India’s high profile HRD Minister Smriti Irani was in for a rude shock at Fabindia, the popular clothing brand store, at Candolim, 20 kms from Panjim in Goa on Friday when she spotted a CCTV camera placed at a mischievous angle pointing towards the trial room.

BJP MLA from Calangute Michael Lobo, who has filed an FIR with the police in this matter, told media persons that along with the police, he was involved in scanning the computer hard-disc linked with the CCTV footage. He said there is footage of women changing clothes in the trial room.

BJP National Executive Meet: Find your leader, Amit Shah tells Congress

Newsroom24x7 Desk

Prime Minister Narendra Modi ruling party president Amit Shah at the Inauguration of the BJP National Executive Meeting at Hotel Ashoka, Bengaluru April 03, 2015
Prime Minister Narendra Modi ruling party president Amit Shah at the Inauguration of the BJP National Executive Meeting at Hotel Ashoka, Bengaluru April 03, 2015

Bengaluru: Ruling Bharatiya Janata party President Amit Shah today launched a blistering attack on Congress party saying that it is bent upon spreading confusion about the Land Acquisition Bill. Goading those in the Congress, the BJP president said that they should be more concerned about their own leader (Congress vice president Rahula Gandhi) and his prolonged absence from the scene instead of constantly being on a fault finding mission against the central Government.

Mr. Shah was inaugurating the two-day National Executive Meet of the BJP at Hotel Ashoka here. Mr. Shah reietrated his party’s commitment to the cause of the farmers and told party workes to rally support for the land acquisition Bill. He said that the party rank and file should play an active role in setting right the public perception when the opposition is going about telling people that the Bill is anti-farmer. To meet this objective, the BJP has decided to hold nationwide rallies and the take-off rally will be in Ranchi on May 6.

Talking to journalists, Union Minister Prakash Javadekar, quoted the party president and said that the the Congress has “looted” the farmers all these years since Independence and now the party is talking of farmers’ interests. He also said that Prime Minister Modi wants BJP leaders to engage in non-political activities. The Modi government will remain in power for the next 20 years and the government will be focusing on the “clean India Campaign”, he added.

Besides Prime Minister Narendra Modi, senior party leader LK Advani and Finance Minister Arun Jaitley were seated on the dais during the inaugural session.

Iran’s Nuclear Programme and the Joint Comprehensive Plan of Action (JCPOA)

Newsroom24x7 Desk

Iran nuclear programWashington DC: The US has made major headway in its efforts to contain Iran and prevent it from building or acquiring nuclear weapons through a proposed Nuclear Agreement and this is amply reflected by a joint comprehensive Plan of Action regarding the Iran’s Nuclear Program that has just been released by the US State Department

The key parameters of a Joint Comprehensive Plan of Action (JCPOA) regarding the Islamic Republic of Iran’s nuclear program that were decided in Lausanne, Switzerland are now on the table and in the public domain. These would form the foundation upon which the final text of the JCPOA will be written between now and June 30, and reflect the significant progress that has been made in discussions between the P5+1, the European Union, and Iran.

According to the US State department, important implementation details are still subject to negotiation, and nothing is agreed until everything is agreed.

Iran has agreed to implement the Additional Protocol of the IAEA, providing the IAEA much greater access and information regarding Iran’s nuclear program, including both declared and undeclared facilities.

The IAEA will have regular access to all of Iran’s nuclear facilities, including to Iran’s enrichment facility at Natanz and its former enrichment facility at Fordow, and including the use of the most up-to-date, modern monitoring technologies.

Inspectors will have access to the supply chain that supports Iran’s nuclear program. The new transparency and inspections mechanisms will closely monitor materials and/or components to prevent diversion to a secret program.

Inspectors will have access to uranium mines and continuous surveillance at uranium mills, where Iran produces yellowcake, for 25 years.

Inspectors will have continuous surveillance of Iran’s centrifuge rotors and bellows production and storage facilities for 20 years. Iran’s centrifuge manufacturing base will be frozen and under continuous surveillance.

All centrifuges and enrichment infrastructure removed from Fordow and Natanz will be placed under continuous monitoring by the IAEA.

A dedicated procurement channel for Iran’s nuclear program will be established to monitor and approve, on a case by case basis, the supply, sale, or transfer to Iran of certain nuclear-related and dual use materials and technology – an additional transparency measure.

Enrichment

Iran has agreed to reduce by approximately two-thirds its installed centrifuges. Iran will go from having about 19,000 installed today to 6,104 installed under the deal, with only 5,060 of these enriching uranium for 10 years. All 6,104 centrifuges will be IR-1s, Iran’s first-generation centrifuge.

Iran has agreed to not enrich uranium over 3.67 percent for at least 15 years.

Iran has agreed to reduce its current stockpile of about 10,000 kg of low-enriched uranium (LEU) to 300 kg of 3.67 percent LEU for 15 years.

All excess centrifuges and enrichment infrastructure will be placed in IAEA monitored storage and will be used only as replacements for operating centrifuges and equipment.

Iran has agreed to not build any new facilities for the purpose of enriching uranium for 15 years.

Iran’s breakout timeline – the time that it would take for Iran to acquire enough fissile material for one weapon – is currently assessed to be 2 to 3 months. That timeline will be extended to at least one year, for a duration of at least ten years, under this framework.
Iran will convert its facility at Fordow so that it is no longer used to enrich uranium

Iran has agreed to not enrich uranium at its Fordow facility for at least 15 years.

Iran has agreed to convert its Fordow facility so that it is used for peaceful purposes only – into a nuclear, physics, technology, research center.

Iran has agreed to not conduct research and development associated with uranium enrichment at Fordow for 15 years.

Iran will not have any fissile material at Fordow for 15 years.

Almost two-thirds of Fordow’s centrifuges and infrastructure will be removed. The remaining centrifuges will not enrich uranium. All centrifuges and related infrastructure will be placed under IAEA monitoring.

Iran will only enrich uranium at the Natanz facility, with only 5,060 IR-1 first-generation centrifuges for ten years.

Iran has agreed to only enrich uranium using its first generation (IR-1 models) centrifuges at Natanz for ten years, removing its more advanced centrifuges.

Iran will remove the 1,000 IR-2M centrifuges currently installed at Natanz and place them in IAEA monitored storage for ten years.

Iran will not use its IR-2, IR-4, IR-5, IR-6, or IR-8 models to produce enriched uranium for at least ten years. Iran will engage in limited research and development with its advanced centrifuges, according to a schedule and parameters which have been agreed to by the P5+1.

For ten years, enrichment and enrichment research and development will be limited to ensure a breakout timeline of at least 1 year. Beyond 10 years, Iran will abide by its enrichment and enrichment R&D plan submitted to the IAEA, and pursuant to the JCPOA, under the Additional Protocol resulting in certain limitations on enrichment capacity.
Inspections and Transparency

Iran will be required to grant access to the IAEA to investigate suspicious sites or allegations of a covert enrichment facility, conversion facility, centrifuge production facility, or yellowcake production facility anywhere in the country.

Iran has agreed to implement Modified Code 3.1 requiring early notification of construction of new facilities.

Iran will implement an agreed set of measures to address the IAEA’s concerns regarding the Possible Military Dimensions (PMD) of its program.
Reactors and Reprocessing