The Hindu Business Line : Commerce Ministry favours scrapping of export cess

THE Commerce Ministry, internally, is in favour of removal of all kinds of export cess slapped on various items, some of which date back to 50-60 years, like that for mica exports.

Speaking to newspersons here, after addressing an export awareness workshop on `Focus Asean plus Australia and New Zealand', organised jointly by Eastern Regional Council of FICCI and EEPC, eastern region, the Commerce Secretary, Mr S.N. Menon, said the process of examination of the need to continue with these cesses has already begun.

He said the Ministry was now looking at only those items that fall within the purview of the department, and removal of all export cesses would per se have to be an inter-ministerial exercise, with the Law Ministry playing a major part. He said this was being considered as a long-term export facilitation measure.

Mr Menon said an alternative to the existing DEPB scheme for exporters, which would neutralise the impact of duty on inputs meant for export production, will most likely be announced in the Foreign Trade Policy measures to be unveiled on March 31.

On exporters' queries with regard to the revised DEPB rates, he clarified that this was being handled by the DEPB committee spearheaded by the DGFT, which does its rate calculations based on industry cost structures and other parameters.

Citing engineering exports as a front-runner among the various groups contributing to the country's export growth of over 25 per cent for the April-January 2005 period, with January exports touching a new high of 33 per cent growth, he said the department was confident of achieving a 20 per cent figure for 2004-05. This, he felt, would put India well on course to achieve $ 75 billion exports in the current fiscal, and also double this figure to $ 150 billion by 2009.

Stressing on the importance of multilateral trade negotiations in the new world trading order, he said while all the FTAs/RTAs have to fall in place, there was also an urgent to convert the regional preferential trading agreements into more comprehensive economic cooperation agreements.

In the context of the Indo-Asean Framework Agreement in Bali last October, covering goods, services, investment and economic cooperation, he informed that the Rules of Origin were now under study. "We need to negotiate on the Rules of Origin, since there is a need to prevent circumvention."

Asean's current negotiations with China for an FTA will completely change the picture, as both India and China are very important for the Asean nations, he clarified.

Suggesting a partnership approach, he said: "We need to keep both our eyes and ears open".

On the Comprehensive Economic Cooperation with Singapore, further rounds of talks have been held and it is expected that a clearer picture would emerge soon.

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