New Delhi: The Centre has urged businesses to make greater use of Free Trade Agreements (FTAs) and the broader benefits available under the Export Promotion Mission to accelerate India’s export growth, rather than relying primarily on interest subsidy schemes.
Commerce and Industry Minister Piyush Goyal recently met representatives of various Export Promotion Councils (EPCs) to review progress towards export targets and discuss medium-term strategies for strengthening sector-wise exports.
Focus on Maximising FTA Benefits
The government’s renewed emphasis on FTAs comes amid a series of new trade agreements, including the India–UK Comprehensive Economic and Trade Agreement (CETA), which is scheduled to come into force on July 15.
Officials are keen to ensure that Indian exporters fully utilise the tariff concessions and market access opportunities offered under these agreements. However, concerns remain that many domestic industries have not built sufficient production capacity to take full advantage of the new export opportunities.
The issue is particularly significant in labour-intensive sectors such as textiles and footwear. Under the India–UK agreement and the proposed India–European Union trade deal, expected to be implemented later this year, tariffs on several products in these sectors will be eliminated, improving India’s competitiveness against countries such as Bangladesh that already enjoy duty-free access.
Capacity Constraints Remain
Industry officials noted that India’s textile sector continues to face structural challenges despite its large size. Many manufacturing units remain fragmented, limiting their ability to meet large export orders, while production is still heavily concentrated in cotton-based products rather than a diversified range of textiles.
The government believes expanding manufacturing capacity and diversifying product offerings will be essential for businesses to fully benefit from future FTAs.
Better Use of Export Promotion Mission
Officials from Export Promotion Councils also pointed out that many exporters have largely utilised only the interest subsidy component of the Export Promotion Mission while overlooking other benefits available under the scheme.
According to industry representatives, some of the remaining provisions are viewed as cumbersome or not fully aligned with the operational needs of exporters. The Commerce Department is therefore encouraging greater utilisation of funds allocated for export promotion activities, infrastructure support, and other assistance available under the programme.
Targeting $1 Trillion in Exports
The government is aiming to raise India’s combined goods and services exports to $1 trillion during the current financial year, up from approximately $860 billion last year.
The target is supported by export growth of more than 15 per cent during the first 10 weeks of the fiscal year. While part of the increase has been driven by higher global commodity prices, particularly crude oil, policymakers expect newly signed FTAs to provide an additional boost by improving market access and enhancing the competitiveness of Indian exports.
