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Foreign trade policy: Rules to be set in clear words to curb graft

The government is scrutinizing the foreign trade policy to weed out provisions that give discretion to the authorities or are ambiguously framed.

"The policy is inadvertently worded in a way that it is open to interpretation of officials at customs ports. This leads to confusion and breeds corruption and has to be set right," a government official told ET.

The annual supplement to the five-year foreign trade policy is likely to be announced in April this year.

"We are going through the policy with a tooth-comb to identify all ambiguous areas," director general of foreign trade Anup Pujari told ET.

For instance, in some places the policy mentions a set of guidelines for "items of steel" and another set of guidelines for items "made of steel". "It is nowhere mentioned what comprises items of steel and how much steel has to be in a product to qualify it as an item made of steel," the official said, adding that it could be interpreted in a number of ways.

Exporters and importers say the ambiguities lead to harassment.

"Some rules are so unclear that they are interpreted in a certain way by exporters and in a different way by customs officials which leads to harassment and our goods get held up for days," said S P Agarwal, an exporter of handicrafts and madeups to Europe.

Welcoming the government's attempt to bring clarity in the policy, Agarwal said in case some confusion still remains, it is the DGFT and not the customs officials who should take the final decision.

"At times, exporters and importers bribe officials to take advantage of loopholes or to just get their consignments released," a Delhi-based textile exporter said.

The policy should lay emphasis on improving procedures and trade facilitation especially since acute constraints on finances will make it difficult for the government to announce major concessions and incentives, said K T Chacko, former DGFT and director, Indian Institute of Foreign Trade.

"The policy can be refined in a way that scope of different interpretations is narrowed down," he said, adding that the DGFT should take inputs from exporters, export promotion councils and commodity boards to identify all problem areas.