Government Urges Exporters to Use FTAs and Export Schemes to Boost Shipments

Commerce Ministry reviews export targets and encourages wider use of Free Trade Agreements and Export Promotion Mission initiatives.

The Government has urged businesses to utilise Free Trade Agreements (FTAs) and schemes under the Export Promotion Mission to increase exports from the country. The emphasis extends beyond interest subsidy programmes and focuses on making greater use of available trade facilitation measures.

Commerce and Industry Minister Piyush Goyal met Export Promotion Councils (EPCs) this week to review the progress made toward export targets and assess the medium-term strategies being adopted across various sectors to support exports.

The renewed focus on FTAs comes amid a series of trade agreements, including the India-UK Comprehensive Economic and Trade Agreement, which is scheduled to be implemented from July 15.

According to officials, the government is placing significant emphasis on ensuring that industries fully utilise the benefits available under these trade agreements. One concern raised is that Indian industry, which has traditionally focused on the domestic market, may not have developed adequate production capacity in sectors such as textiles to fully benefit from duty concessions offered through FTAs.

The upcoming trade agreements with the United Kingdom and the European Union are expected to eliminate tariffs in several labour-intensive sectors, including textiles and footwear. This is expected to improve the competitiveness of Indian products against goods from countries such as Bangladesh and others that currently enjoy zero-tariff access.

However, officials noted that Indian textile manufacturers, including some of the largest companies, remain fragmented and are often viewed as lacking sufficient production capacity to meet rising demand. It was also observed that many textile companies continue to concentrate largely on cotton-based production.

During discussions on the Export Promotion Mission, Export Promotion Council (EPC) officials pointed out that domestic manufacturers have primarily used interest subsidy benefits while other components of the scheme remain underutilised because some are considered cumbersome or do not align with industry requirements.

The Commerce Department is working to ensure that the funds allocated under the scheme are fully utilised, including for promotional activities and other export facilitation initiatives.

The government is also aiming for Indian exports of goods and services to reach the $1 trillion mark this year, compared with $860 billion last year, supported by the 15%-plus growth recorded during the first 10 weeks of the current fiscal year. While part of this growth has been driven by higher commodity prices, particularly crude oil, the Centre expects FTAs to provide additional support to export growth.