Seven months of the current financial year are already over, but the government is yet to announce the Foreign Trade Policy. Usually, FTPs are announced soon after the Union Budget is presented, but this year, the matter is still up in the air. According to a media report last week, the announcement may be delayed further as the government is yet to take a final decision on granting tax incentives to export promotion schemes. Earlier this month, another report had even added that the existing policy might be extended till the end of the calendar year. This uncertainty is not welcome for the exporter community.

Recently, I have had some discussion with a number of exporters about this and most of them are of the opinion that the delay in announcement of the forthcoming FTP, which will include both an annual plan and a five-year long-term policy, is hurting their confidence. While pricing products, exporters take into account of the sops they get under export incentive schemes, but due to the ongoing uncertainties over the FTP, they are finding it difficult to do their costing while contracting for new orders. Though the general belief is that the current incentive schemes will continue till a new policy is in place, to be sure they want a formal extension of the schemes. More importantly, I think FTP is too important a matter to be left unattended for such a long time.

A recently released report shows that India's manufacturing exports have increased nearly 14 times from what they were in 1991-92 while during the same period services exports have witnessed nearly a 50-fold growth. In other words, we have not succeeded much — unlike China — to make our local industries competitive and shift from farms to factories, despite adopting free-market principles since 1991. Within the manufacturing sector, the report adds, exports from labor-intensive sectors have languished against a fast-paced growth in exports of capital-intensive goods, showing again our failure to materialize the transition. We have to reverse these trends to realize India's manufacturing dream, revived by our new political leadership.

Meanwhile, there are some positive development on GST. In a speech, the Finance Minister has said that the Centre is in the final stages of talks with the states on the issue. I think the earlier the two sides come to an agreement, the better it is for the Indian industry. The new tax regime will bring an end to dozens of taxes and, as a result, our businesses will get rid of the confusion created by the present tax regime with multiple authorities and different jurisdictions levying multiple taxes on different aspects of a business. They will also be able to reduce costs in many cases.

I invite your opinions.