The Directorate General of Foreign Trade (DGFT) has been instrumental in improving India’s trade capabilities through focused initiatives that not only boost exports but also streamline imports for value addition, as mentioned by Deputy DGFT Vishwajeet G. Chimankar during the recently held Federation of Pharmaceutical and Allied Products Merchant Exporters (FPME) Annual Conclave 2024.
The conference was officially opened by Chief Guest, Dr. Vinay Sahasrabuddhe, former Rajya Sabha MP and BJP vice president, under the theme ‘Recognize Your Value’. Among the attending dignitaries were Arun Sehgal, managing director at Chempro Group, Harish Jain, director of Embiotic Laboratories Pvt. Ltd, Dr. Ramaswamy Lakshmanan, chairman of Sotax India Pvt. Ltd, Ramesh Rughani, chairman & MD of Khyati Global Ventures Ltd, and Ashish Vora, founder & chairman of Prime Pharma Pvt. Ltd., along with other notable figures. FPME’s operational proceedings were managed by Sandeep Modi, secretary, and Dharmesh Kharwar, joint secretary.
Jayant Kumar, Deputy Drugs Controller (West Zone 2), presented his insights on the evolving trade landscape for merchant exporters, influenced by regulatory shifts, market dynamics, and technological progress.
He emphasized the noteworthy advantages for merchant exporters such as increased profits through a widened customer base, operational efficiencies, and heightened competitiveness through innovation. Venturing into new markets diversifies risks and reveals new growth possibilities.
However, notable challenges persist, involving complex regulatory frameworks, supply chain vulnerabilities, currency volatility, and data security concerns. “Addressing these challenges demands innovation, adaptability, and industry-wide cooperation,” Kumar stressed.
Chimankar highlighted that given today’s global competition, no nation can be self-reliant in every sector. Trade success hinges on maximizing national strengths while offsetting deficiencies with imports.
For example, China, a leading exporter globally, marked exports worth about $2,500 million in a recent period while also importing goods worth $2,100 million, underscoring the role of interdependencies in global trade. To remain competitive, countries often import essential raw materials for added value before exporting finished goods.
In India, mechanisms like the Advance Authorisation Scheme (AAS) support this process by allowing duty-free import of inputs as per Standard Input-Output Norms (SION) for value-adding exports. By waiving customs duties, it bolsters pivotal sectors like pharmaceuticals, where India is a frontrunner. Known as the “world’s pharmacy,” India depends on importing active pharmaceutical ingredients (APIs) to formulate life-saving drugs for global distribution.
The Export Promotion Capital Goods (EPCG) Scheme is another key intervention that empowers companies to import machinery duty-free, augmenting production capacity and enhancing competitiveness. Exporters are granted a generous six years to meet export obligations, fostering stable growth.
In international trade, the guiding principle is clear: duties and taxes should not burden exports. Accordingly, schemes like Remission of Duties and Taxes on Exported Products (RoDTEP) provide refunds for duties accrued during manufacturing, such as electricity or embedded levies. This ensures competitive pricing for Indian goods in international markets.
E-commerce is redefining global trade patterns, and the DGFT has simplified procedures for smaller exporters. Previously, the high costs associated with obtaining a Bank Realisation Certificate (BRC) burdened small exporters. By revamping the BRC system and enabling bulk uploads, DGFT is facilitating e-commerce growth. Moreover, through outreach and consultations, awareness concerning these opportunities is being raised, with specific regard to health, wellness, and Ayurvedic product sectors.
For specialized items like clinical materials under the Special Chemicals, Organisms, Materials, Equipment, and Technologies (SCOMET) framework, DGFT has significantly reduced authorization times—from 30 to 60 days, with goals to minimize it further to 15 days. This mirrors the agency’s dedication to optimizing export processes.
SCOMET signifies India’s national export control list for dual-use items, nuclear-related commodities, software, and technology, with exports being regulated under the Foreign Trade Policy (FTP) of India, either prohibited or permitted through licensing.
Chimankar underscored the vast potential of the health and wellness industry, notably in Ayurvedic products, which enjoy significant international demand. He noted the transformative role of e-commerce in unlocking this potential.
Moreover, Chimankar invited feedback on HS code-related barriers and compliance hurdles in import/export, suggesting better collaboration with regulatory authorities to effectively address these issues.