Hospitality and Tourism Sector to get Trade incentives
Before the pandemic nearly stopped travel and transportation services, the two services made up nearly 23% of all service exports in FY20, totaling $ 213 billion.
For the current fiscal year, the Department of Commerce has set a $350 billion services export target, a 37% increase over FY22.
Due to the pandemic, the trade policy was initially slated to go into effect on April 1st, 2020. Still, it was delayed by a year to March 31st, 2021, then again to April 1st, 2021, due to additional delays until September 30th and April 1st. Finally, on September 30th, the government is anticipated to release the proposed policy.
In spite of the pandemic, which had a negative impact on the travel, tourism, aviation, and hospitality sectors, India's service exports in FY22 reached an all-time high.
According to estimates, travel and transportation services will make up 21% of all services exported in FY23, compared to 15% in the first half of the previous fiscal year and 14.7% in FY21, the year the pandemic hit.
The Directorate General of Foreign Trade (DGFT) has created a set of rules and regulations known as the trade policy that apply to both importing and exporting goods.
The industry is pushing for the reinstatement of the Services Exports from India Scheme (SEIS), which was terminated in FY21 due to a WTO ruling prohibiting subsidy programs.
Exporters received freely transferable duty credit certificates under the scheme at a cost of 5% or 7% of their net foreign exchange earnings. The scrips could be used to pay the basic customs duty imposed on the import of input goods, excise, and a number of other central taxes. They are intended to offset infrastructural inefficiencies and associated costs faced by exporters.
To discuss obstacles, opportunities, and strategies for boosting service exports, Piyush Goyal, minister of commerce, convened a brainstorming session last week.
Businesses pushed for incentive programs for particular industries to increase exports. Other sessions covered branding services, establishing standards, addressing regulatory bottlenecks, and using the ongoing free trade agreement negotiations to seek better market access.
Trade, hotels, transportation, communication, and services associated with broadcasting all experienced a 34.3% increase in the quarter thanks to a rebound in contact-intensive services following the end of lockdowns. Businesses in the service sector have been pleading with the government to support a quicker recovery so they can hit the export goal set for this fiscal year.
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