India's Export Strategy and the Scrutiny of Promotion Schemes
UPSC Relevance
Prelims: Indian Polity and Governance (Parliamentary Committees - Public Accounts Committee (PAC), Comptroller and Auditor General of India - CAG); Indian Economy (Foreign Trade, Tariffs, Free Trade Agreements - FTAs, European Free Trade Association - EFTA, Export Promotion Capital Goods - EPCG Scheme), Marine Products.
Mains:
General Studies Paper 2 (Polity & International Relations): Parliament and State legislatures—structure, functioning, conduct of business, powers & privileges and issues arising out of these (Parliamentary Committees); Bilateral, regional and global groupings and agreements involving India.
General Studies Paper 3 (Economy): Indian Economy and issues relating to growth, development and employment; Effects of liberalization on the economy, changes in industrial policy and their effects on industrial growth.
Key Highlights from the News
The Ministry of Commerce informed the Public Accounts Committee (PAC) that high U.S. tariffs imposed on India would adversely affect the country's marine exports, especially shrimp exports, in the long run.
To overcome this crisis, India is adopting a two-pronged strategy:
Market Diversification: Explore new markets like the European Union and Russia.
Free Trade Agreements (FTAs): Enter into new trade agreements with entities like the European Free Trade Association (EFTA) and the UK to eliminate existing tariffs.
Meanwhile, the PAC expressed strong dissatisfaction with the performance of the Export Promotion Capital Goods (EPCG) Scheme, a key government initiative to promote exports.
The committee pointed out that despite significant tax exemptions provided under this scheme, there are no clear figures on how much it has contributed to the growth of the manufacturing sector.
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