The Hindu Business Line : Govt may revisit export curbs on non-food, high-value items

New Delhi, May 25 The Government will revisit the export restrictions it imposed in the wake of inflationary concerns to facilitate resumption of export of non-food, but high-value, items and some food items like non-basmati rice to African countries on geopolitical considerations and as goodwill gesture.

Disclosing this to Business Line, the Commerce Secretary, Mr Gopal K. Pillai, said export of food items was based on concern for and effect on vulnerable sections of the society. However, for non-food items, he said the Government would revisit some of the restrictions on cement and steel, and impose export duty.

“The way it has been done on a broad level, though it was intended to be only for primary products, a lot of non-primary products have also got put into that 66/2008 Customs notification. Definitely, we need to take all the non-primary items out of the export ban so that our export markets are not affected, especially the high-value, high-quality products. Therefore, we will be requesting the Ministry of Finance and Ministry of Steel to revisit the issue and take appropriate action,” Mr Pillai remarked.

Provisional official data show that while export of primary and semi-finished iron and steel logged a growth of 22 per cent at $5,301 million in 2007-08 against $4,370.88 million in 2006-07, export of iron and steel bar/rod last fiscal yielded $1,531 million ($861 million), reflecting a growth of 78 per cent.

Asked whether the proposed move to revisit export restraints would apply to non-basmati rice, Mr Pillai said the ban already does not apply to Bangladesh, Nepal and Sierra Lone. He said India received representations for rice from seven or eight African countries, and the quantity varies from 1,000 tonnes to 50,000 tonnes. “I don’t think this would pose any problem,” he said adding that as the ban was recommended by the Group of Ministers, the Commerce Ministry would request the GoM to revisit the issue.

On whether the ambitious $200-billion export target for the current fiscal was feasible given the export restrictions and a general slowdown of the global economy forecast, Mr Pillai said that though the first month export figure for the current fiscal will be known on June 1, he saw strong growth from provisional figures as exports in April 2008 would exceed 20 per cent in dollar terms. He said except handicrafts and gem and jewellery all segments of export performed exceedingly well, with engineering exports alone cranking up a growth of 60 per cent year-on-year. He said the engineering industry might not even require any incentives at this stage as its overseas opportunities are substantial. However, Mr Pillai hastened to add that “wherever possible, we will fine-tune the policy to give maximum thrust to exports”.

On the last-mile glitches in wrapping up the India-Asean Free Trade Agreement (FTA), Mr Pillai said that “with nine countries in the Asean camp everything has been sorted out, but only with Indonesia the problem is yet to be settled. He said primarily the Indonesians have to match our offer.

“We have only 5 per cent of the trade in negative list but they have 14.5 per cent and they have to bring this to 5 per cent of trade. Again, on the margin of preference in Special Products under the highly sensitive list such as palm oil, where we offered to cut duty from 80 to 45 per cent, and in others like tea, coffee from 100 to 50 per cent instead of zero. So we are saying that whatever we have put in the highly sensitive list of five products, they should also give similar margin of preferences. We have given 45 per cent average and they are offering something about 25 per cent. Once they settle this, the deal will be through,” Mr Pillai said.

He said the Trade Negotiations Committee would meet next month at official level and the trade ministers’ meeting is in Singapore and “we hope to settle that by then”. He said that though negotiations have dragged, faster reduction of duty would take place between 2009 and 2011 as scheduled for the benefit of the stakeholders in the FTA.

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