States to develop independent export policy: A step in the right direction?

By Aman Bagaria 

By the end of the third meeting of the Council for Trade Development and Promotion, India had decided to come up with a new approach in the country’s export policy. The change in export policy as has been proposed entails each of the states developing their own export policies with the Centre analysing the said policies and then sharing data on the strengths and weaknesses of them. The Centre could then make recommendations so as to enable the states to take measures to meet these challenges. This is a step towards encouraging cooperative federalism as the Centre works with the States to promote exports.

Progress of states

This being a new and innovative method to promote export in India, the states have not yet taken it up as a viable tool for development. Export policies till date had been within the domain of the Central Government and hence there is a delay in the implementation of the new program. However, almost all states have already submitted their export policies to the Centre for consideration and deliberations, with the exception of states like Goa, Delhi and Sikkim who are starting work on their policies soon. From among the policies that have already been submitted, there exist certain deficiencies which shall soon be corrected. About twelve states have not discussed specifics on the potential growth sectors for the export of services. Uttarakhand and Uttar Pradesh have submitted detailed export policies with emphasis on relevant matters like last-mile connectivity and education for the producers.

Directions to the states

The Centre has come up with this state-centered export policy so as to better achieve its target of obtaining at least 40% of the Gross Domestic Product (GDP) through global trade and half of that from exports. The Union Commerce Ministry has decided that the districts shall be made the operative units for boosting exports and nodal officers would be appointed for each district towards this end. An increase in the exports for individual districts would result in an increase in the total export for each state which would result in an increase in the export of the nation. In pursuance of the new export policies that have been developed by the States, they have identified their champion goods and new products with a high potential. The States were also asked to address five components while drawing up the strategies, which included promotion of services, value addition in goods, promoting organic cultivation, logistics and improved standards and certification and trace-backs.

Support from the centre

The states are now required to improve their export logistics and infrastructure facilities to provide a stimulus to the recognized products. The states have been encouraged to make use of the Ministry’s Trade Infrastructure for Export Scheme (TIES) to fortify their individual export infrastructures. Through the aforementioned scheme, the Centre intends to provide assistance to states for the setting up and upgradation of infrastructure projects to promote export in the long run. To encourage the investment of capital by state utilities, the Ministry has declared that it would make an equal contribution to the export developmental programs. For this purpose, the outlay of the TIES should be increased to 300 crore rupees from the 100 crore that is currently available.

In conclusion, the objective of the new policy is to ensure a continuous dialogue with the States and the Union Territories on measures to provide an international trade-enabling environment in the States and to create a framework to make the states active partners in boosting India’s exports. India’s exports have grown over the last year but the imports have grown at a faster rate causing a spike in the trade deficit and hence a boost to the export trade in India is the need of the hour and this is a positive step towards achieving it.

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