New Delhi, Apr 18 (IBNS) Apex industry body ASSOCHAM on Thursday described the new Foreign Trade Policy (FTP) as a baby step to push merchandise exports in a global market marked by recession, slowdown and tentative revival.
In a statement, Rajkumar Dhoot, president of The Associated Chambers of Commerce and Industry of India (ASSOCHAM), welcomed the extension of interest subvention of two per cent to engineering and textiles and the promise to cut the transactions costs
However, the ASSOCHAM chief said these steps are not enough to turn exports completely around.
"It is tough out there in the world market. Most of the import export destinations like Europe are battling recession. Even in the US the revival signals are tentative despite the stock markets there reaching new highs driven by artificial infusion of liquidity," said Dhoot.
"We expected some bold measures like fiscal incentives on export income. At the end of the day, entrepreneurs should find the export markets more attractive than the domestic market. Otherwise, where is the incentive to fight in the global turf."
"While relaxation of SEZ norms are welcome and bring in some life into the slackening area, the Minimum Alternate Tax (MAT) should have been removed. After all, promises of tax free enclaves should have been honoured. Besides, these special economic zones can become a vehicle for reviving the country's manufacturing sector, which is struggling," said Mr Dhoot.
However, permission to transfer ownership will allow those stuck in the SEZs make an exit, but the concept has lost its charm.
The ASSOCHAM president also expressed concern over exports showing an overall negative trend and declining by close to two per cent at $300 billion leaving a huge trade deficit of over $190 billion. "Hopefully, in the current financial thanks to gold melting down in prices and crude oil slipping, the trade gap will be reduced."