The authorities under the brand new Foreign Trade Policy will expand the definition of “political risk” under the export guarantee scheme to cowl any recent imposition of non-tariff boundaries by importing nations. Image for representational function solely.
| Photo Credit: The Hindu
Exporters might quickly find a way to get insurance coverage cowl for some losses suffered on account of nations’ sudden imposition of boundaries to commerce, under the new Foreign Trade Policy (FTP), which additionally envisages the formation of a “whole of government” ministerial panel to tackle the grievances of small exporters.
The authorities will expand the definition of “political risk” under the export guarantee scheme to cowl any recent imposition of non-tariff boundaries by importing nations after a cargo has left Indian shores.
Typically, the Export Credit Guarantee Corporation (ECGC) indemnifies exporters for losses when patrons flip bancrupt or default on funds, in addition to political dangers like conflict and sudden import restrictions or promulgations of legal guidelines or decrees, however doesn’t cowl anti-dumping steps or non-tariff boundaries.
“Some of the anti-dumping measures or non-tariff barriers introduced after a shipment has been made, will come under the purview of the political risk,” the brand new FTP states.
MSME grievances
The coverage additionally guarantees to arrange an inter-ministerial committee to study micro, small and medium enterprises’ (MSME) trade-related grievances, which have coverage ramifications. “This will expedite decision making with a ‘whole of government’ approach,” it stated.
The FTP additionally does away an earlier requirement for importers who retailer their merchandise in bonded warehouses, which mandated them to re-export such items in the event that they weren’t cleared for home consumption inside one 12 months or “such extended period as the customs authorities may permit”.
“The clearance of the warehoused goods shall be as per the provisions of the Customs Act, 1962,” states the brand new coverage, which doesn’t have an expiry date and can be tweaked on an ongoing foundation, in contrast to previous insurance policies that had a tenure of 5 years. The 2015-20 coverage was prolonged for 3 years within the wake of the COVID-19 pandemic adopted by the battle in Europe.
