The Hindu Business Line : Ministry seeks extension of DEPB, interest subvention scheme

In the run-up to the annual supplement to the Foreign Trade Policy (FTP) to be unveiled on April 7, the Commerce Ministry is negotiating with the Finance Ministry for the extension of the Duty Entitlement Passbook Scheme (DEPB) and the subvention in the rate of interest of credit by two per cent and an additional subvention of two per cent to a few sectors beyond March 31.

Talking to Business Line here, the Commerce Secretary, Mr Gopal K. Pillai, said that when the current five-year FTP was unveiled in 2004, it was forecast that the country’s export would go up from $65-70 billion to $150 billion by the end of March 2009. But all indications are that “we would achieve this level a year ahead by end-March 2008”.

Slowdown

He said that the country’s exports for the next fiscal would be targeted at $200 billion, despite the incipient slowdown in the global economy.

He said that preliminary estimates show that a number of export items including readymade garments, primary and semi-finished steel, plastic and linoleum, no-ferrous metals, marine products, handicrafts and handlooms showed negative growth and this owed primarily to the slowdown in manufacturing growth which is a cause for concern.

New incentives

Asked about any new incentives proposed to the final year annual supplement to the main FTP, Mr Pillai said a major thrust would be provided to labour-intensive segments such as textiles, leather, marine products, handlooms and handicrafts.

If no remedial measure was in place, he cautioned that the total job losses in these segments could be substantial.

He said the authorities remain conscious of the rupee appreciation fallout on exporters’ margins and this would also be factored into the policy supplement to provide some cushion to exporters.

To a specific query about the recent high-level meeting in Cambodia for overcoming the last-mile differences in the run-up to the India-ASEAN Free Trade Agreement, Mr Pillai said that “we had a good discussion.

On palm oil, tea, coffee and pepper, the differences have been almost settled.

Now the only point is that ASEAN countries have to match our offer of the margin of preference to the highly sensitive products.”

Mr Pillai said that Indonesia has to cut its tariffs much more matching the level of other members of ASEAN.

He said that nine ASEAN countries and India have agreed on 80 per cent of total trade products on the zero duty lists.

He said that Indonesia promised to come out with a fresh offer shortly. He said that all the offers would be ready before the trade ministers’ meeting scheduled to be held in Bali, Indonesia, in May.

As the heads of government would have a summit meet towards the end of this year, the details of tariff negotiations would be signed by trade ministers if it is agreed upon in Bali before it is put to the summit leaders, he added.

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