Renewed momentum for India to create, export, ease of doing business – Industry News

Apart from the 100-day scorecard of the Ministry of Commerce and Industry, there is a new set of initiatives aimed at establishing a world-class manufacturing ecosystem in the country. Several steps have also been taken to boost export opportunities through non-conventional means, including e-commerce, and promote ease of doing business.

During this period, the government, which took office on June 9, also focused on stabilising trade amid global disruptions, announcing continued key export schemes and critical reductions in import tariffs on precious metals to control concessional imports. The trend of tariff escalation witnessed since FY18 was halted in the Union Budget of FY25.

However, sluggish exports, partly due to the collapse in global trade, geopolitical tensions and ongoing protectionist tendencies, remain a concern. While labour-intensive sectors are the hardest hit, newer areas such as electronics are seeing smart gains. In low-value-added sectors, including oil products, export performance remains volatile.

In Q1 FY25, India’s merchandise exports rose 6%, but this was largely supported by a favourable base, while in Q2 July-August, further shipments fell 5.7%. The country’s exports also fell in FY24. There have been fresh concerns about the current account deficit, with the merchandise trade deficit approaching $30 billion in August, the highest level since October last year. While CAD in Q1 FY25 is expected to be less than 1.5% of gross domestic product, this deficit could even widen to 2% if September also sees a high trade deficit.

For exports, the RODTEP (Rebate of Duties and Taxes on Exported Products) scheme has been extended till December 31, 2024. This scheme helps reduce the cost of exports by refunding taxes on inputs used to produce exported goods. Ajay Srivastava of research unit GTRI noted that the five-year extension would allow exporters to better plan and calculate the cost of exports.

The union council approved 12 new industrial cities at once at its meeting last month under the National Industrial Corridor Development Programme (NIDCP), taking the total number of such industrial cities to 20. Four such cities are already operational and four are under construction. All these cities are located along industrial corridors across the country.

On the export front, the initial focus has been on e-commerce exports, which is expected to explode in the coming years. Currently, India’s e-commerce exports stand at close to $5 billion and have the potential to reach $200-300 billion by 2030. The government has extended incentives available to other exporters to those who place orders through online platforms and ship products via courier.

Rumki Majumdar, an economist at Deloitte India, noted that Tier 2 and 3 cities account for about 88% of new online shoppers. “This success can be replicated if retailers can go beyond borders. Access to a global market, better networks and connections, and information can increase competitiveness and revenue opportunities,” Majumdar said.

On the import side, to curb preferential imports of gold and silver from Dubai under the India-UAE CEPA, the government has reduced the Basic Customs Duty (BCD) on these metals from 15% to 6%. India has also requested a review of the preferential provisions on gold bars under CEPA to manage the surge in imports.

In the electronics sector, the price of mobile phones was reduced from 20% to 15%, and price cuts were also introduced on selected electronic components to stimulate domestic production.

A framework for e-commerce export centres (ECEH) has been prepared and interested companies have been invited to submit applications for the establishment of these centres.

ECEH will aim to achieve agglomeration benefits for e-commerce exporters, in the form of warehousing, packaging, labelling, certification and testing and other shared facilities for export purposes.

The Foreign Trade Policy 2023 outlined the intention and roadmap for setting up e-commerce export hubs. These were proposed as designated areas that would act as a hub of favourable business infrastructure and facilities for cross-border e-commerce activities.

Global e-commerce exports are expected to reach $2 trillion in 2030, up from $800 billion today.

China, a leader in e-commerce exports, is also a pioneer in e-commerce export hubs. China’s e-commerce exports account for 6.4% of its total merchandise exports in 2023, compared with 1.14% for India.

To facilitate ease of doing business, the government has launched Trade Connect e-Platform, which is intended to serve as a single point of contact for existing and prospective exporters. It will connect exporters with all relevant government departments, Indian missions abroad, provide information on market opportunities,

Queries regarding export-import regulations, trade finance and insurance, incentive programs, trade disputes, logistics, export support to foreign markets, government procurement opportunities and investment opportunities can be submitted for resolution through this platform.

The Jan Sunwai portal was launched at the first meeting of the Trade Council after the government took over. It will be managed by the Directorate General of Foreign Trade (DGFT) as a virtual interface based on video conferencing to facilitate communication between the concerned authorities dealing with trade