Rajeev Kher in Calcutta on Friday. Picture by Kishor Roy Chowdhury
Calcutta, March 21: The new foreign trade policy, which will be announced after the general election, is likely to prioritise sectors to offer export sops.
Commerce secretary Rajeev Kher, who was here today to meet exporters and industry associations, said the department was planning to reorient support schemes for various export sectors under the foreign trade policy.
The existing policy will expire at the end of this month.
“The incentivisation process has become secular. An economy, which is short on resources, must have a policy framework where there is a difference between potential winners and not winners,” Kher, who assumed office last month, said.
“My impression of the manner in which the foreign trade policy has been prepared is essentially an agglomeration of some incentive instruments. This does not contextualise the ecosystem within which these instruments are operating,” he said.
Kher added that the new policy would identify sectors where resources in the form of incentives would be offered so that the policy benefits were effectively utilised.
He said India had to conform to the rules on export subsidy laid down by the WTO.
“Under the agreement on subsidies and countervailing measures, if the market share of a product has reached at least 3.25 per cent in global trade (for two consecutive calendar years), that sector is not entitled to export subsidies,” Kher said.
He added that sectors such as textiles and gems and jewellery had either reached or were nearing the stipulated market share.
According to Kher, Indian exporters need to consider newer trade territories to lower their dependence on the traditional markets of the US and Europe. He said emerging South American markets such as Peru, Chile and Colombia, which had trade pacts with the US, could offer an indirect trade route to America.
“We are now doing the necessary preparatory work. Whenever a new government comes, we can have the stamp of the government.”
He said the quality of exports would have to improve with the diversification into developing markets.