The Hindu Business Line : Govt lends a hand to exports

TRADE TIME: The Commerce and Industry Minister, Mr Kamal Nath, with the Minister of State for Commerce, Mr Jairam Ramesh, during a meeting in New Delhi on Thursday. — Shanker Chakravarty

New Delhi April 19

The Annual Supplement to the Foreign Trade Policy (FTP) has extended a slew of incentives to sectors such as agri exports, gem and jewellery, handloom and handicrafts and hi-tech products, providing further impetus to exports, which touched $125 billion in 2006-07.

The Government has also exempted services tax on services rendered abroad and charged on exports from India.

This has been a long-pending demand of the exporting community.

Similarly, service tax on services rendered in India but utilised by exporters would be exempted or remitted.

Announcing the modifications designed to simplify procedures and cut down transaction costs, the Union Commerce and Industry Minister, Mr Kamal Nath, said that on the back of robust export performance in the last three years, the Government has set a merchandise export target of $160 billion for the current fiscal and $200 billion for 2008-09.

Speaking to Business Line, he said that the rationale of the policy supplement was "new product, new market, agriculture and to strengthen the small and medium sector. If I had not announced focus market last year, the slowdown in the economy would have worsened."

He added that he remained concerned over export finance and would "ask exporters what they propose and take these up with the RBI."

For hi-tech products, a new scheme would be in place providing duty-free benefit on incremental exports, subject to a ceiling of Rs 15 crore for each company.

The Duty Entitlement Passbook Scheme (DEPB) scheme has been extended till March-end 2008 and stakeholders can give their views by May 31on its replacement.

Cottage industries

For tiny and cottage industries utilising the Export Promotion Capital Goods (EPCG) scheme, the timeframe for fulfilling export obligation has been increased from eight years to 12 years.

For diversifying exports to tap unexplored markets, the focus market scheme has been expanded to include 16 new countries.

In the focus product, new items are being included such as mica and its variants, barley, oats, soyabean, cigar/cheroots, bovine fats and copra.

The Vishesh Krishi and Gram Udyog Yojana have been expanded to include value-added variants of several agricultural and forest products, besides extending the benefits of the scheme to 100 per cent export-oriented units.

To encourage agro-processing, status holders would be rewarded with duty credit scrips equal to 10 per cent of the value of agricultural exports, provided they use them for duty redemption on imports of cold storage and reefer vans.

Sector-specific fillip

Other sector-specific fillip include duty-free access to tools, machinery and equipment for gems and jewellery and handicrafts sectors and rhodium-polished silver jewellery, besides inclusion of the testing facility at Dubai in the list of certifying agencies for the diamond sector.

The limit for duty-free import of samples has been increased to Rs 75,000 to encourage product development and diversification.

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