The Foreign Trade Policy 2015-20 has been extended by six months, until September 30, 2022. The present Foreign Trade Policy 2015-20, which is effective through March 31, 2022, has been extended until September 30, 2022, according to a notification from the Directorate General of Foreign Trade. Following the Covid-19 outbreak, the policy was first extended for a year, until the end of March 2020, and subsequently for another year, until September 30.
- The strategy lays out recommendations for boosting exports to boost economic growth and create jobs, as well as incentives under various programmes like Duty-Free Import Authorisation (DFIA) and Export Promotion Capital Goods (EPCG) (EPCG).
- Tea, steel, chemical, and pharmaceutical exporters to Russia are pleading with the government and the Reserve Bank of India (RBI) to intervene, as millions of rupees are at stake.
- According to industry sources, tea, steel, chemical, and pharmaceutical exporters to Russia are seeking government and Reserve Bank of India (RBI) intervention because millions of dollars in payments are stuck due to sanctions imposed by the West, which have isolated Russian banks from the global financial system.
- According to them, the interruption in Indian companies’ cash flows might cause them to delay payments to workers and suppliers, as well as skip payments to lenders.
- As part of the restrictions, Russian firms have been barred from using the global Society for Worldwide Interbank Financial Telecommunication, or SWIFT, platform.
Effect of Russia Ukraine War:
- Many South Indian tea exporters have yet to receive payment from Russian purchasers.
- The rupee payment has arrived, but not the dollar payment.
- India exports the most tea to Russia, averaging 43-45 million kg per year. South Indian plantations export 20-25 million kg of this total.
- Companies have addressed inquiries to Russian banks with a presence in India, which have opened letters of credit (LCs) on behalf of Russian importers.
- Some steel producers are reportedly likely to write to the central bank over unpaid invoices.
- According to figures from the Bank of Baroda Economic Research, India’s exports to Russia totaled $2.85 billion in the first ten months of FY22, compared to $7.90 billion in imports.
- VTB, Sberbank, and Gazprombank are among the major Russian banks with operations in India. The VEB, Russia’s state-owned development bank, is likewise involved in such transactions.
- As a result of Russia’s invasion of Ukraine, freight charges have risen again, worsening container scarcity.
VEB and RBI:
- The VEB and the RBI have collaborated on a project.
- After Western sanctions blocked Moscow’s access to SWIFT, the VEB and the RBI are set to finalise an alternative transaction platform to facilitate bilateral trade, according to ET on March 30.
- “Delayed payments are affecting more than just tea,” said Ajay Sahai, director-general of the Federation of Indian Export Organizations (FIEO). “Engineering, chemicals, and plastics are all suffering as a result of payment delays.”
- According to FIEO, the penalties will have a particularly negative impact on low-value, high-volume cargo, which will affect various Indian exporters.