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Govt may cut export target of $900 billion in FTP review due to global factors: FIEO
May-26-2017

Indicating anxieties on India’s export scenario, exporters' body Federation of Indian Export Organisations or FIEO has said that the government may reduce the target of exporting $900 billion worth of goods and services by financial year 2020, when it unveils a mid-term review of India’s foreign trade policy later this year. It also pointed that the downward revision may be to the tune of around $700 billion as the country’s exports performance has been dismal in the last couple of years due to global factors.

FIEO Director General Ajay Sahai has said that exports would need to grow at a compound annual rate of 27 percent till 2020 for the existing target to be reached. He noted that a more achievable scenario of shipments growing at a compounded annual rate of 15 percent will lead to exports clocking $700-750 billion by 2020. He also said that the Commerce Ministry is expected to announce a review of the FTP 2015-2020 simultaneously with the implementation of GST from July 1 this year.

Sahai further said that they are concerned with the liquidity issue as the refund mechanism would require payment of GST first and its refund subsequently. He also said that the additional cost of credit to manage the liquidity should be borne by the government if present exemption is not brought forward in the GST. He noted that it was difficult to say whether India’s exports would suffer on account of the GST rollout, but asserted that it will take at least 5 to 6 months to adjust to the new regime as there would be teething problems initially.

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