Exports get big push.
THE new foreign trade policy announced on Thursday has extended the tax holiday and duty refund schemes for exporters, allowed duty- free capital goods imports and introduced higher incentives for exports to Latin American, African and CIS countries as part of the strategy to bring exports back on the growth path.
Special incentives have been extended to labourintensive sectors such as textiles, handicrafts, leather and gems and jewellery, which have reported large- scale job losses due to the contraction in exports.
Unveiling the five- year policy, commerce minister Anand Sharma set a target of $ 200 billion for the country's exports for 2010- 11 which is the same as the target that had been set for 2008- 09 before the global crisishit exports.
The minister said he could not hazard a guess for quantifying exports in the current fiscal ( 2009- 10) as world trade was expected to contract by as much as nine to 12 per cent due to the recession.
" However, we expect to achieve an annual growth rate of 15 per cent for exports in 2010- 11," he added.
The new policy provides incentives to encourage exporters to look beyond the traditional markets of the US and western Europe. Exporters supplying goods to countries in Latin America, Africa and CIS countries will be allowed to import goods valued at three per cent of their total exports without paying any duty.
The popular Duty Entitlement Pass Book ( DEPB) incentive scheme, used for neutralising the incidence of customs duty on the import content of export products, has been extended by one year to December 2010.
" The income tax benefits under Section 10( A) for the IT industry and Section 10( B) for 100 per cent export- oriented units ( EOUs) would continue for one additional year till March 31, 2011," the minister announced.
Meanwhile, the adjusted assistance scheme which was initiated in December last year for the adversely affected sectors will continue till March 2010.
Enhanced insurance coverage and exposure for exports through Export Credit Guarantee Corporation ( ECGC) Scheme has been ensured till March 31, 2010, the minister said.
ECGC provides a range of credit risks insurance cover to exporters against loss in exports of goods and services.
It also extends guarantees to banks and financial institutions to enable exporters to obtain better facilities from them. The two per cent interest subvention for pre- shipment credit for seven specified sectors has been extended till March 2010.
The government has also relaxed the Export Promotion Capital Goods ( EPCG) scheme to facilitate export of second hand plant and machinery.
Export obligation on import of spares, moulds and others under the EPCG scheme has been reduced to 50 per cent of the normal specific export obligation to reduce the burden on exporters.
In order to cut red tape and reduce the transaction cost for exporters, the government has scaled down various fees promoting the use of online exchanges among exporters and the customs and directorate general of foreign trade.
The new policy exempts exporters from paying fees for availing incentives under various export development schemes and reduced other charges.
The maximum fee charged on licence applications on schemes like focus product, focus market, market access initiative and market development assistance, have been slashed to Rs 1 lakh from Rs 1.50 lakh ( manual applications) and to Rs 50,000 from Rs 75,000 for electronic applications.
The policy has also extended the time within which exporters can convert shipping bills from one export scheme to another, from one month to three months, according to the Foreign Trade Policy 2009- 14 released on Thursday.
The government has decided to form an inter- ministerial committee, which would help resolve issues of exporters more quickly. Further, export promotion councils have been advised to issue registration- cum- membership certificates through an online system.
For EDI ( electronic data interchange) ports double verification of shipping bills by customs for any of the DGFT schemes shall be dispensed with from December, 2009.
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|Publication:||Mail Today (New Delhi, India)|
|Date:||Aug 28, 2009|
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