The Hindu Business Line : Assocham advocates pragmatic Exim Policy

THE Associated Chambers of Commerce and Industry (Assocham) has advocated a pragmatic Exim Policy, which gives priority to areas such as employment generation, promotion of agro and rural sectors as well as initiatives to boost services and manufacturing sectors.

In a note submitted to the Ministry of Industry and Commerce, the Chamber President, Mr Mahendra K. Sanghi, has stated that hardening of the rupee against dollar, low export margins, inadequate schemes for exploring newer markets, switch off and switch on policy regarding export incentives, etc., are among the handicaps being faced by the industry especially the SMEs.

Keeping the short, medium and long-term perspectives in mind, he has suggested that India should progressively try to reach 15 per cent tariff rate in a span of two to three years, as China and other ASEAN (Association of South-East Nations) countries are already having lower tariff rates. Since India has expressed the desire to join the ASEAN free trade area, the import duty should be progressively reduced and efforts must be increased to assist industry to enhance exports to the ASEAN region.

According to the Chamber, there are a number of units in domestic tariff area which are almost 100 per cent export-oriented but are not treated at par with 100 per cent EOUs.

Thus, they do not enjoy the benefits of income-tax exemption and refund of Central Sales Tax.

Mr Sanghi, has, therefore suggested that the ambit of EOU scheme should be expanded to cover all domestic units exporting over 75 per cent of their production and such units may be recognised as Extended Export Oriented Units.

Since the general rate of customs duty has come down to 20 per cent and will be further reduced in a phased manner, there is a need to review the Export Promotion Capital Goods (EPCG) scheme provision of allowing import of capital goods at the rate of five per cent.

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