Services lobby chief flays FTP deferment

How do you see the deferment of the foreign trade policy by another six months?

It is highly unfair as just a few days before the policy announcement the government says that they are postponing it by six months. It is something quite alarming. To delay by more than one month is a matter of concern. We thought they would delay it by one month. According to some guesses, there must have been some inter-ministerial difference of opinion, which may have been a big reason. We don’t know but there could be many internal or external reasons due to which the policy was deferred.

 Government officials said export promotion councils suggested deferring it by six months. Is that correct?

As far as the services export promotion council is concerned, we did not demand deferment of the FTP. On the contrary, we have been asking the government to come out with it at the earliest. Not even once have we suggested this (deferment) to the government.

The government is leaning on  services for exports growth this year. How important was FTP for the sector?

That’s right. The government has been asking us to increase our share from 50% to 60% within two years in India’s total exports. So the government is giving that much importance to services exports. But, much to our surprise, we were not consulted at all about this. We got to know about the postponement only after it was announced.

 What support do you expect from the government now?

We have identified 12 champion sectors. In the case of hotels, we have asked for the waiver of 18% GST, and allow GST refund to tourists for local purchases. For medical tourism we have sought relaxation of visa norms and faster visa processing. A (patient) cannot wait so long for a visa. Most importantly, for incentives, we have told them that although exports are growing it doesn’t mean that they don’t need incentives. Incentives will really help further our exports. The commerce minister’s view is that the sector is growing without any incentives, so they don’t need support. But, we have been asking the government to give incentives, even for a few sectors, as it will help.

What’s the outlook for services exports this year?

The commerce minister has given the services sector an export target of $350bn for the current fiscal. But, we should be able to reach $300bn plus, up from $254 bn last year… It will become challenging to reach the $350 bn export target this year, in the absence of support.