ACMA, the apex body representing India's auto component manufacturing industry, welcomed the much needed boost provided by the Foreign Trade Policy (FTP) 2015-20 to promote exports of auto components. The FTP attempts to consolidate various exports schemes and simplifies procedures to help integrate India in the global value chain, improving ease of doing business index through online and e-governance interventions, and reducing the transaction cost in international trade. Clauses in the trade policy will also promote the domestic capital goods manufacturing industry.
The ACMA President, Ramesh Suri congratulated Nirmala Sitharaman, Minister of State for Commerce and Industry for devising a pragmatic and progressive FTP 2015-20 that gives a clear direction to the nation's export agenda. He explained,
"172 tariff-lines of auto components are benefitted under the new policy compared to the earlier 166. It is also heartening that the incentives provided encourage local sourcing and manufacturing as they are based on the amount of value-addition. Further, auto-component industry continues to be incentivised for exports to the traditional markets as well as the emerging markets."
"It also provides the much-needed framework to enhance export of goods and services as well as generate employment which is in line with ‘Make in India' vision of Prime Minister Narendra Modi", Suri added.
A few key provisions under the new policy are:
• Stable policy for five years with mid-term review
• Export incentives consolidated into two schemes - Merchandise Exports from India Scheme (MEIS) and Services Exports from India Scheme (SEIS). Duty credit scrips issued under MEIS and SEIS and the goods imported against these scrips are fully transferable which can be used to pay customs duty, excise duty and service tax.
• Under the export promotion capital goods scheme (EPCG), export obligation reduced from 90 per cent to 75 per cent in case of capital goods sourced locally. This will promote the domestic capital goods manufacturing industry.
• Indian Manufacturers who are status holders will be allowed to self-certify to qualify for preferential treatment under the various Preferential Trade Agreement (PTA), Free Trade Agreement (FTA), Comprehensive Economic Cooperation Agreement (CECAs), Comprehensive Economic Partnership Agreement (CEPAs). This ‘Approved Exporter System' will help exporters in getting fast access to international markets.
• Basic Customs Duty paid in cash or through debit under Duty Credit Scrips can be taken back as Duty Drawback.
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