The new Commerce Minister, Suresh Prabhu on Wednesday said his ministry is looking at ways to quickly boost India’s exports which are currently facing “challenging times”, partly on account of the implementation of the Goods and Services Tax (GST) from July.
“Exports to GDP ratio has to rise…so we are at a crash intervention sort of a thing. We are trying to work out what is to be done to promote exports in a shortest possible time which includes issues coming up because of the GST,” Prabhu told reporters here.
The Minister, who took charge of the Commerce and Industry portfolio after cabinet reshuffle earlier this week, said exporters are facing certain issues in the GST regime, which the ministry is taking up with the concerned authorities.
After rising for 10 months in succession, Indian merchandise exports in July fell 6.84 per cent to $21.69 billion compared to $23.28 billion in the corresponding month of 2015. Exports in June at $23.56 billion had grown by 4.39 per cent over the same month of 2016.
Exporters have said that the GST regime would block working capital worth over Rs 1.85 lakh crore per year with the government as they now have to pay the tax first and then claim refund under a cumbersome process.
Prabhu also said the ministry is working on the support measures “which can facilitate quick increase in exports both in volume and value.”
He said the ministry will work on several fronts, including bringing in a new industrial policy, improving logistics for exporters, an agriculture export policy and integrating into the global supply chains.
“Global supply chains are now become a reality. India is part of that in auto components and generic formulations,” he said.
Prabhu also described the current times as “challenging” in view of more countries creating protectionist “walls”.
“Protectionist ideas are growing. They are stronger over a period time. So we will follow our trade policy in a manner that we will be able to work through these walls,” he said.
The Commerce Ministry is slated to announce the review of the foreign trade policy next month.