The Hindu Business Line : Raise drawback rates to 5%: FICCI

New Delhi, Aug. 4 Concerned over the recent slowdown in exports, the Federation of Indian Chambers of Commerce and Industry (FICCI) has sought enhanced relief package for exporters to counter the impact of rupee appreciation.

The chamber has suggested that the drawback rates need to be increased from three per cent to five per cent and interest on export credit should be reduced to below five per cent.

Other measures that are required to compensate the exporters for the loss incurred as a result of rupee appreciation include reducing interest on export to below five per cent and allowing conversion of shipping bills.

The lower interest rate on export credit as announced under the relief package last month was going to have little impact, according to a survey conducted by the chamber among exporters.

Under the relief package, the interest rate on export credit has been lowered by two per cent that works out to be less then one per cent relief on the sales, the respondents said. It was also reported in the survey that the value caps for DEPB scheme were grossly low in many cases.

For instance, in the case of zinc oxide, DEPB rates are six per cent subject to the value cap of Rs 25 per kg.

However, the survey noted that the average price of this product has been around Rs 128 per kg on the basis of which DEPB benefit should be six per cent of Rs 128 per kg or Rs 7.68 per kg, whereas due to value cap of Rs 25 per kg, DEPB benefit is only Rs. 1.5 per kg.

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Raise drawback rates to 5%: FICCI