In a significant move to reshape its export promotion strategy, the Indian government has announced plans to develop a new Exporter Performance Index. The initiative, led by the Directorate General of Foreign Trade (DGFT), aims to systematically rank and recognize the country's top exporting firms. Simultaneously, senior officials have clearly stated that the government is not considering the introduction of any new export subsidy schemes, marking a strategic pivot in its approach to boosting outbound shipments.
A New Framework for Recognizing Export Excellence
Santosh Kumar Sarangi, the Director General of Foreign Trade, revealed the plan for the index during an interactive session organized by the Confederation of Indian Industry (CII). The proposed Exporter Performance Index is designed to be a comprehensive ranking system that will evaluate exporters based on a set of defined parameters. While the full list of metrics is still being finalized, it is expected to include factors such as export volume, growth consistency, market diversification, and product innovation.
The primary objective behind this index is to move beyond a one-dimensional view of export success based solely on turnover. "We are working on an exporter performance index... to rank our exporters," Sarangi confirmed. This formalized ranking mechanism is intended to foster healthy competition among businesses, provide recognition to high performers, and help the government tailor its support more effectively to different segments of the exporter community.
Clarity on Subsidies: Reliance on Existing Schemes
In a statement that sets clear expectations for the trading community, the DGFT chief ruled out the possibility of new fiscal subsidies for exporters. This decision aligns with global trade rules and India's own policy direction. Sarangi emphasized that the government's focus will remain on enhancing the ease of doing business and providing robust support through mechanisms already in place.
He specifically highlighted the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme as a key pillar of support. The RoDTEP scheme is designed to refund various central, state, and local duties and taxes incurred on exported products that are not otherwise rebated, ensuring Indian goods remain competitive in the global market. The message is clear: while direct subsidies are off the table, the government is committed to ensuring exporters are not disadvantaged by domestic tax structures.
Broader Strategy: Ease of Doing Business and Trade Agreements
The announcement underscores a broader strategic shift in India's foreign trade policy. The government is increasingly focusing on creating a conducive regulatory and logistical environment rather than relying on direct financial incentives. This includes streamlining processes, reducing documentation, and leveraging technology through platforms like the DGFT's digital portal.
Furthermore, India is actively pursuing new and upgraded trade agreements to secure better market access for its goods. Sarangi pointed to the recently concluded Trade and Economic Partnership Agreement (TEPA) with the European Free Trade Association (EFTA), which includes Iceland, Liechtenstein, Norway, and Switzerland, as a prime example of this strategy. Such agreements are seen as long-term enablers for sustainable export growth, providing a stable and preferential framework for Indian businesses.
The DGFT also addressed the performance of key sectors, noting that while electronics exports have shown remarkable growth, sectors like pharmaceuticals and textiles have faced challenges. The new performance index could help identify such sector-specific trends and success stories more granularly.
In conclusion, India's trade promotion machinery is adopting a more nuanced and data-driven approach. The proposed Exporter Performance Index aims to bring transparency and recognition to export achievements. Coupled with a firm stance against new subsidies and a reinforced commitment to schemes like RoDTEP and strategic trade pacts, the government is signaling a move towards building foundational competitiveness for Indian exporters in the global arena.
