{"id":894,"date":"2023-06-28T10:19:55","date_gmt":"2023-06-28T10:19:55","guid":{"rendered":"https:\/\/lawentranceindia.com\/blogs\/?p=894"},"modified":"2023-07-05T10:23:20","modified_gmt":"2023-07-05T10:23:20","slug":"why-indian-export-is-losing-its-momentum","status":"publish","type":"post","link":"https:\/\/lawentranceindia.com\/blogs\/why-indian-export-is-losing-its-momentum\/","title":{"rendered":"Why Indian export is losing its momentum?"},"content":{"rendered":"<style>\n\t\t#table-of-contents {\n\t\t\tborder: 1px solid #ccc;\n\t\t\tpadding: 10px;\n\t\t\tmargin-bottom: 20px;\n\t\t}<\/p>\n<p>\t\t#table-of-contents ul {\n\t\t\tlist-style: none;\n\t\t\tmargin: 0;\n\t\t\tpadding: 0;\n\t\t}<\/p>\n<p>\t\t#table-of-contents li {\n\t\t\tmargin: 0;\n\t\t\tpadding: 0;\n\t\t}<\/p>\n<p>\t\t#table-of-contents a {\n\t\t\ttext-decoration: none;\n\t\t\tcolor: #333;\n\t\t}<\/p>\n<p>\t\t#table-of-contents a:hover {\n\t\t\tcolor: #666;\n\t\t}\n\t<\/style>\n<div id=\"table-of-contents\">\n<h2>Table of Contents<\/h2>\n<ul>\n<li><a href=\"#section1\">Introduction<\/a><\/li>\n<li><a href=\"#section2\">How global slowdown impacts trade?<\/a><\/li>\n<li><a href=\"#section3\">Foreign Trade Policy of India<\/a><\/li>\n<li><a href=\"#section4\">The focus area of FTP 2023<\/a><\/li>\n<li><a href=\"#section5\">One Time Amnesty Scheme<\/a><\/li>\n<\/ul>\n<\/div>\n<h2 id=\"section1\">Why Indian export is losing its momentum?<\/h2>\n<p><img decoding=\"async\" loading=\"lazy\" class=\"alignnone size-medium wp-image-896\" src=\"https:\/\/i0.wp.com\/blog.lawentranceindia.com\/wp-content\/uploads\/2023\/06\/indian-export-1-300x183.jpg?resize=689%2C421\" alt=\"Import and Export\" width=\"689\" height=\"421\" data-recalc-dims=\"1\" \/><\/p>\n<p>India\u2019s merchandise export shrunk 12.7% (year-on-year basis) in April 2023 to $34.66 billion, the lowest in past six months. The import shrunk more sharply by 14% to $49.90 billion. The fall in export and import is a global phenomenon which is an indicator of slowing global demand.<\/p>\n<p>The Russia-Ukraine crisis has disrupted the supply chain causing price rise among range of commodities such as food, energy and commodities. The prices have remained very high by the historical standards which continues to erode real incomes and demand for imported goods.<\/p>\n<p>The energy prices in Europe witnessed steep price rise due to sanction on energy supplies from Russia in the wake of the Russia\u2019s war on Ukraine. Meanwhile, European countries diversified their energy supply to other countries such as Algeria, Qatar, U.S.A and Norway. It had a negative consequence in countries like Japan, which witnessed rise in LNG prices by 200%<\/p>\n<p>Failure of financial institutions such as FTX crypto-exchange, loss of confidence in Credit Suisse Bank in Switzerland, and failure of three banks in USA (SVB, Signature Bank and First Republic Bank), led to financial contagion in an already slowing world economy.<\/p>\n<p>The European Economic Forecast predicted that the region narrowly escaped the recession which was building since September, 2022. The inflation in USA, though moderated a little, but it still run high. Also, the JP Morgan Global Manufacturing Purchasing Managers Index (PMI) indicated marginal deterioration of business conditions.<\/p>\n<p><em>Sri Santosh Kumar Sarangi<\/em>, the Director-General of Foreign Trade (DGFT), noted that demand for Indian exports is not optimistic in India\u2019s major export destination such as the United States of America, China and the European Union. The Government must initiate inter-ministerial dialogue to diversify export baskets and destination to sustain export momentum.<\/p>\n<h2 id=\"section2\">How global slowdown impacts trade?<\/h2>\n<p>The global economic slowdown has created the subdued demand for goods and services due to reduction in discretionary spending. This is reflected in the contraction of export-oriented goods in India such as engineering goods, chemicals, gems and jewellery, readymade garments, plastics and petroleum products.<\/p>\n<p>Similarly, inflation in essential items such as food and energy erode the purchasing power of an individual. It also affects the flow of capital to developing country.<\/p>\n<h2 id=\"section3\">Foreign Trade Policy of India<\/h2>\n<p>The Union Ministry of Commerce and Industry announced the Foreign Trade Policy 2023 which seeks to increase the export from India to $2 trillion by 2030. India\u2019s export has already crossed $750 billion and is expected to cross $760 billion by the end of this year.<\/p>\n<p><strong>The key approach of the policy is based on four pillars: &#8211;<\/strong><\/p>\n<ol>\n<li>Incentive to Remission<\/li>\n<li>Export promotion through collaboration of exporters, States, districts and Indian Missions abroad.<\/li>\n<li>Ease of doing business, reduction in transaction cost and e-initiatives<\/li>\n<li>Emerging Areas: E-Commerce, Developing Districts as Export Hubs, and streamlining SCOMET policy.<\/li>\n<\/ol>\n<h2 id=\"section4\">The focus area of FTP 2023<\/h2>\n<p><strong>Process re-engineering and automation<\/strong> to facilitate ease of doing business for exporters through paperless implementation mechanism. IT-based schemes for MSMEs and others to access export benefits easily.<\/p>\n<p>Focus on emerging areas like dual use high end technology items under <strong>SCOMET<\/strong>, facilitating e-commerce export, collaborating with States and Districts for export promotion.<\/p>\n<p>Encourages recognition of new towns through <strong><em>\u201cTowns of Export Excellence Scheme\u201d<\/em><\/strong> and exporters through <strong><em>\u201cStatus Holder Scheme\u201d<\/em><\/strong>. Faridabad, Mirzapur, Moradabad and Varanasi have been designated as <em>Towns of Export Excellence <\/em>(TEE) in addition to existing 39 towns.<\/p>\n<table>\n<tbody>\n<tr>\n<td width=\"301\"><strong>Features of Towns of Export Excellence <\/strong><\/td>\n<td width=\"301\"><strong>Features of Status Holder Scheme<\/strong><\/td>\n<\/tr>\n<tr>\n<td width=\"301\">\u00d8\u00a0 Priority access to export promotion funds under the Market Access Initiative (MAI) scheme.<\/p>\n<p>\u00d8\u00a0 Entitled to avail Common Service Provider (CSP) benefits for export fulfilment under the EPCG Scheme.<\/p>\n<p>\u00d8\u00a0 It will boost the exports of handlooms, handicrafts, and carpets.<\/td>\n<td width=\"301\">\u00d8\u00a0 It is based on <strong><em>\u2018each one teach one\u2019<\/em><\/strong> initiative, where 2-star and above status holders will provide trade-related training based on a model curriculum to interested individuals.<\/p>\n<p>\u00d8\u00a0 This will help India build a skilled manpower pool capable of servicing a $5 Trillion economy before 2030.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h2 id=\"section5\">One Time Amnesty Scheme<\/h2>\n<p><strong><em>One Time Amnesty Scheme<\/em><\/strong>, under <em>Vivaad se Vishwaas<\/em> initiative, for providing relief to exporters who have been unable to meet their obligations under EPCG and Advance Authorizations, and burdened with high duty and interest costs associated with pending cases.<\/p>\n<p><strong>Districts as Export Hubs Initiative<\/strong> <strong>(DEHI)<\/strong> aims to promote trade ecosystem at grassroot level by identifying and promoting exports of goods at district level in coordination with State Export Promotion Committee and District Export Promotion Committee.<\/p>\n<p><strong>Merchanting Trade Hub: <\/strong>Merchanting trade involves shipment of goods from one foreign country to another foreign country without touching Indian ports, involving an Indian intermediary. The FTP 2023 has introduced provisions for merchanting trade of restricted and prohibited items under export policy.<\/p>\n<p><strong>PM MITRA<\/strong> scheme is eligible to claim benefits under Export Promotion Capital Goods Scheme (EPCG), which allows import of capital goods at zero Customs duty for export production.<\/p>\n<p>Dairy sector has been exempted from maintaining <strong>Average Export Obligation<\/strong> to support technology upgradation.<\/p>\n<p>Green Technology products such as Vertical Farming Equipment, Wastewater treatment and recycling, rainwater harvesting system, Battery Electric vehicles, etc. are eligible for reduced export obligation under EPCG scheme.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Table of Contents Introduction How global slowdown impacts trade? Foreign Trade Policy of India The focus area of FTP 2023 One Time Amnesty Scheme Why Indian export is losing its momentum? India\u2019s merchandise export shrunk 12.7% (year-on-year basis) in April 2023 to $34.66 billion, the lowest in past six months. The import shrunk more sharply&#46;&#46;&#46;<\/p>\n","protected":false},"author":1,"featured_media":895,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false},"categories":[40],"tags":[313,314,315,316,317,318],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.9 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Why Indian export is losing its momentum? - World of Law brought to you by Manu Law Classes Pvt. Ltd. - Most read content written by NLU Alumni<\/title>\n<meta name=\"description\" content=\"India\u2019s merchandise export shrunk 12.7% (year-on-year basis) in April 2023 to $34.66 billion, the lowest in past six months. The import shrunk more sharply by 14% to $49.90 billion. 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