Par panel expresses concern over contraction in exports, suggest steps to increase growth
Department Related Parliamentary Standing Committee on Commerce said the volatility in growth of exports is still notable despite reaching the half trillion mark (USD 538.08 billion in 2018-19).
It said that downslide in major exportable commodities and labour-intensive sectors depicts a "doom and gloom" scenario for India's trade in the long run.
"The committee expresses its concern on the contraction of exports in the year 2019-20 as compared to the previous year. The committee is of the opinion that the (commerce) department should take all out measures for bringing a desired momentum on trade front," the report said.
It stressed on the need for a calibrated approach, concerted efforts, diversification of export basket, removal of supply chain bottlenecks and simplification of export procedures, among others, to achieve the goal of making India a significant global player in goods and services trade with USD 1 trillion export volume by 2024-25.
The committee recommended a detailed analysis of the performance and policy issues in exports before initiating new programmes, policy and schemes in the current year.
It also asked for close monitoring of the existing schemes/policies to be taken up rigorously.
The report urged the department to make vigorous efforts for market expansion and establish trade synergies with new emerging trade destinations in Africa, Latin America and West Asia to reduce overdependence on developed countries, especially the US and EU for exports, and to minimize uncertainties due to adverse global event/scenario.
It recommended the government to be vigilant in checking fluctuations in exchange rate of rupee and unfair trade practices adopted by the trading partners.
Besides, the committee pitched for setting up a monitoring committee to address key issues related to Free Trade Agreements.
It also expressed concern on discriminating measures such as delisting India from 'Developing Beneficiary Country' under the 'Generalised System of Preferences (GSP)', inclusion of the country in 'Priority Watch List' by the United States Trade Representative (USTR) and increase in disputes against India in the WTO.
Further, the report said the government should formulate a global value chain (GVC) integration policy to facilitate Indian industries' participation in GVCs.
It added that merely discontinuing the MEIS (Merchandise Exports from India Scheme) before putting in place any suitable substitutive mechanism will impact the sectors which at present are under the garb of inverted duty structure.
"The Committee recommended to make a careful evaluation and analysis of new scheme viz. Remission of Duties or Taxes on Export Products (RoDTEP) Scheme before its implementation for its compliance with global trade norms," it said.
The report also expressed its "deep concerns" on the substantial reduction of the budgetary allocation made to agencies/commodity boards.
"The curtailing of funds will impact the functioning of the schemes and programmes of the agencies and boards and the shortfall may lead to upsurge in liabilities in the coming years," it said.