India 63rd in World Bank’s Ease of Doing Business ranking; among top 10 improvers

The 2020 edition of the World Bank’s Ease of Doing Business Report acknowledges India as one of the top 10 improvers, third time in a row, with an improvement of 67 ranks in 3 years. It is also the highest jump by any large country since 2011.

With the `Startup India Initiative’ reaching new heights, India is also now a global leader in Innovation. India ranked 52nd in the Global Innovation Index.

A total of 21,778 startups are now recognised under the `Startup India Initiative’, of which 2,912 startups have been recognised since 1 June 2019.

The Startup India Hub has 3,42,614 registered users of which 21,540 users have been added since 1 June 2019. With the amendment in Section 54GB of Income Tax Act on August 1st, 2019 the condition of minimum holding of 50 per cent of share capital or voting rights in the startup has been relaxed to 25 per cent.

In the past 4 years India’s rank in the Global Innovation Index (GII) has improved from the 81st rank in 2015 to the 52nd rank in GII 2019 report. India became the first developing country to launch the Global Innovation Index (GII) in association with World Intellectual Property Organisation (WIPO) and the Confederation of Indian Industry (CII).

In order to promote innovation the government has amended patent rules. The final Patent (amendment) Rules, 2019 - published on 17 September 2019 amending The Patents Rules, 2003 has led to significant simplification of rules, especially for startups and MSMEs.

The Patent (Second Amendment) Rules, 2019 published to reduce fees for small entities/MSMEs for processing of patent applications under various sections of the Patents Act, 1970 will incentivise MSMEs to file for more parents, it was pointed out.

In order to promote exports and export competitiveness, the Export Credit Guarantee Corporation (ECGC) has introduced a new Export Credit Insurance Scheme (ECIS) called ‘NIRVIK’ for exporters in which increased insurance cover for export credit has been extended by banks from existing average of 60 per cent to 90 per cent for both principal and interest.

For accounts with limits below Rs80 crore, the premium rates will be moderated to 0.60 per cent per annum and for those exceeding Rs80 crore, it will be 0.72 per cent per annum for the same enhanced cover. It is expected that the initiative will cost about Rs1,700 crore  per annum. It will provide comfort to banks, bring down the cost of credit due to capital relief, limit provision requirement and improve liquidity due to quick settlement of claims and will ensure timely and adequate working capital and relief to MSMEs.

To enhance ease of doing business, deemed export drawback has been allowed on All Industry Rate of drawback schedule. 

An online portal for filing applications under ‘Transport and Marketing Assistance (TMA)' scheme for specified agriculture products has been launched.

ECGC has prepared a database for all pending claims and online access on status of claims has been provided. This will be a critical tool for providing information access to exporters.

The online “Origin Management System” gives single access point for all exporters, for all free trade agreements (FTAs), preferential trade agreements (PTAs) and for all agencies. India has 15 FTAs/PTAs and 7 lakh ‘Certificates of Origin’ are issued annually. 

The platform will be made live for FTAs as per the concurrence of the concerned partner countries. This process is electronic, paperless and transparent with real time tracking of FTA utilisation at product level and country level. It will also lead to reduced transaction cost and time.

Scheme for Remission of Duties or Taxes on Export Product (RoDTEP) formulated to replace existing Merchandise Exports from India (MEIS) Scheme, will be a WTO compliant scheme for promotion of exports. Textiles and all other sectors which currently enjoy incentives up to 2 percent over MEIS will transit into RODTEP from 1 January 2020. RoDTEP will span all sectors and the revenue foregone will be about Rs50,000 crore.

A capital of Rs389 crore has been infused into Export Credit Guarantee Corporation (ECGC) to provide extra support to exports to emerging and challenging markets like Africa, CIS, Latin America and Asian countries.

A grant-in-aid (corpus) of Rs300 crore has been contributed to National Export Insurance Account (NEIA) trust on 21 June 2019, thereby, enhancing its risk taking capacity to support project exports in challenging markets.

To give a boost to gem and jewellery exports through resolution of various issues like removal of the requirement of paying IGST on re-import of goods which were exported earlier for exhibition purpose/consignment basis has been done away with. Partial discharge of bonds executed by nominated agencies/banks is allowed for import of gold to be supplied to jewellery exporters, thereby enabling nominated agencies/banks to release bank guarantee of jewellery exporters who have fulfilled their export obligation, thereby helping to release blocked working capital.

A National Logistics Policy is being prepared with the aim of bringing down total logistics cost from 14 per cent to 9 per cent of the country's GDP. The policy aims to boost business competitiveness, drive economic growth and make India a global logistics hub.

The Multi-Modal Transportation of Goods Bill, 2019 has been finalised for approval. This aims at facilitating the movement of goods for exports, imports and domestic trade. It will help to fix accountability and liabilities for violation of its provisions.

The Agriculture Export Policy has been approved with an outlay of Rs206 crore for 2019-20. In order to establish linkage between FPOs and the exporters, a portal has been created by Agricultural and Processed Food Products Export Development Authority (APEDA). About 740 Farmers Producer Organisation (FPO) have been registered under Farmers Connect Portal.

Budgetary Support under GST regime to the units located in Jammu & Kashmir, Himachal Pradesh, Uttarakhand and North Eastern States, including Sikkim, has been made. Rs1,700 crore has been authorised by Department for Promotion of Industry and Internal Trade (DPIIT) to Central Board of Indirect Taxes & Customs (CBIC) for disbursement to eligible industrial units. Rs1,692 crore has already been disbursed by CBIC under the Scheme till 15 November 2019. During the last 6 months, Rs86 crore was disbursed to 420 industrial units under the Special Package to the Himalayan States.

For antidumping the average number of days taken for initiation of anti-dumping investigations has come down to 32 days in 2019 (up to 1 November) as against 259 days in 2016.

The Directorate General of Trade Remedies (DGTR) for the first time initiated two cases of bilateral safeguards to protect domestic industry from injury. No bilateral safeguard has ever been initiated in the past by DG Safeguards/Directorate General of Anti-Dumping and Allied Duties.

In order to ensure interests of the Indian industry and farmers in FTAs, India successfully laid out its stand in Regional Comprehensive Economic Partnership (RCEP) India’s key concerns were not addressed. India took a strong stance to protect the interest of domestic producers. This decision will help vulnerable sectors, including farmers and the dairy sector as well as small manufacturers, who would have been threatened by RCEP rules.

India has also secured agreement for review of ASEAN FTA (ASEAN-India Free Trade Area-AIFTA) after repeated follow up. This will help in removing rules that affect Indian producers and exporters and will also promote Indian exports and Make in India.