The Hindu Business Line : Relax export obligation norms: FICCI

Emphasising the need for a more exporter-friendly Export Promotion Capital Goods Scheme (EPCG), industry chamber FICCI has sought relaxation of export obligation conditions under the scheme in its memorandum submitted to the Directorate-General of Foreign Trade for the forthcoming Foreign Trade Policy 2007-08.

So, the maintenance of average level of exports over and above this already high level of exports in the preceding three years (24 per cent) is almost impossible now for exporters. Also, in many cases, capital goods are imported under the EPCG to replace the old ones, which implies that there is no creation of additional capacity in such cases. So, to expect an exporter to maintain such a high level of exports when there is no increase in capacity has no justification, the chamber pointed out.

This problem is more acute for large exporters where absolute level of exports is already high, Government could consider some special dispensation or window for large exporters to fulfil this particular export obligation condition under EPCG, the chamber suggested.

In the memorandum, the chamber has also suggested that capital goods import be at reduced rate of customs duty of one or two per cent from the existing five per cent. FICCI observed that with the steady fall in import duties in general each year, benefits under the five per cent EPCG scheme have considerably reduced.

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