• India forms a high-level committee to address tax and export clearance challenges faced by manufacturing industries.
• Panel includes Finance Ministry, DPIIT, Commerce, DGFT, RBI, industry bodies, and consultants to identify bottlenecks and streamline processes.
• Committee to study sector-specific hurdles in pharma, textiles, engineering, electronics, food, leather, and gems to boost global competitiveness.

The government of India has formed a high-level committee to examine the difficulties that manufacturing plants encounter in terms of taxes and export clearances. The action is being taken at a time when exporters are under pressure from high tariffs in foreign markets, especially from the United States, and increasing competition that has been weighing on India's trade performance. The committee will be a forum where the prevailing tax structures on exports, including customs duty and export incentives, and also clearance systems that contribute significantly to the competitiveness of the country's manufacturing industry will be evaluated, an official said.

The committee consists of members from some of the most important government and regulatory agencies such as the Finance Ministry, Department for Promotion of Industry and Internal Trade (DPIIT), Department of Commerce, Directorate General of Foreign Trade (DGFT), and the Reserve Bank of India. Together with them, industry associations, export promotion councils, and consultancy agencies will also be included in the process to ensure policymakers' and industry voices are heard while making recommendations. Together, this mix is likely to collate policymaking, financial regulatory, trade facilitation, and ground-level industrial operations expertise.

The main mandate of the committee is to evaluate the challenges exporters are facing in dealing with the existing tax and clearance regimes. Businesses have, over the years, noted that observance of customs procedures and duties requires time and increases costs, hence compromising their competitiveness globally. Export incentives, also, have witnessed various changes and updates, leaving some industries in the dark about their future strategies. By scrutinizing these facets thoroughly, the committee hopes to determine bottlenecks and rationalize processes in a manner that supports export growth.

Also Read: India-US Trade Talks Stall Over Agricultural Import Demands

Another significant challenge for the committee will be to analyze industry-wise problems in major industries that form a valuable part of India's export basket. All these sectors involve engineering products, pharma, electronics, chemicals, agro and processed foods, textiles, leather, and the gems and jewellery industry. Each sector has its own peculiar challenges in terms of international demand, foreign market tariff structures, and domestic regulation.

For instance, pharmaceuticals can encounter regulatory hurdles outside their country, whereas textiles and leather have to contend with nations that provide lower cost of production. The committee is expected to study these nuances and provide recommendations tailored to each sector’s requirements.

The government's move to establish this panel highlights the need to tackle structural issues in India's trade setup when the rest of the world is witnessing a resurgence of protectionist policies. By convening several stakeholders, the effort aims to establish a more competitive and efficient export system. The suggestions that result from this exercise may determine changes in customs, taxation, and clearance procedures, thus enhancing India's prospects of increasing its presence in international markets.

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