The Hindu Business Line : Govt extends focus market benefits to auto sector

New Delhi, Sept. 28 Automobile export from the country is set to get a boost, with the Centre extending the focus market scheme benefits for motor cars and motor cycle exports to certain notified countries.

Introduced in April 2006, the focus market scheme was devised to offset the high freight cost and other disabilities faced by exporters in accessing certain international markets.

The scheme allowed duty credit facility @ 2.5 per cent of the free on board (fob) value of exports of specified products to the notified countries.

The countries to which exports of motor cars (excluding racing cars) would now be entitled for focus market scheme benefits are Bahrain, Bangladesh, Kenya, Kuwait, Nigeria, Pakistan, the Philippines, Saudi Arabia, Singapore, Russia, Tanzania, Turkey, the UAE and Ukraine.

For motor cycles (including mopeds), the export destinations where the focus market benefits would be available are Nigeria, Indonesia, Kenya, Tanzania, Mexico, Singapore, South Africa and Egypt.

Faced with a slowdown in the domestic automobile market, the Society of Indian Automobile Manufacturers (SIAM) had earlier this year sought Government support on the exports front in view of the appreciating rupee.

Plea to Minister

It had represented to the Commerce Minister, Mr Kamal Nath, that in the absence of Government incentives, the sector would be badly hit on the export front also.

The automobile industry had highlighted that it was incurring huge costs on developing new export markets and that there were no export benefits coming its way from schemes such as focus market and focus product.

“Automobiles were not getting benefits of either focus market or focus product schemes. Now, they have got focus market scheme benefits. Soon, we expect automobiles to be specified as high value added products and, therefore, be made entitled for focus product scheme benefits also”, an industry official familiar with the development said.

The Indian auto industry had shipped more than a million units in fiscal 2007-08, with export value of about $ 2.8 billion.

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