The Big Picture - Budget Expectations: Export Sector
The government is looking at the possibility of extending the popular Merchandise Export from India Scheme (MEIS) and other export incentives, challenged by the US at the World Trade Organization, beyond March 31 as it is worried that replacing the existing schemes could hurt exports. The Foreign Trade Policy 2020-25 to be announced in the new fiscal may continue many of the old schemes with some adjustment in rates, according to a BusinessLine report. With exports showing a decline so far this year, there is a growing feeling amongst policy makers that the boat should not be rocked further. India’s exports declined almost 2 per cent to $239.29 billion in April-December 2019 with most labour-intensive sectors contracting. Once growing at over 20%, powering India’s economic growth, India’s exports have been stuck at around $300 billion for the last one decade. Indian industry has often played safe, content with the domestic demand and unwilling to upgrade technology or standards to match global levels.