'Exports will drop to $200 b if DEPB withdrawn'

PTI New Delhi | Updated on May 10, 2011 Published on May 10, 2011

India’s exports will drop to $200 billion in the current fiscal if sops under the DEPB duty neutralisation scheme are withdrawn, Federation of Indian Export Organisations (FIEO) has said.

The Government has set an export target of $312 billion for 2011-12, pegging the growth at 26.7 per cent vis-a-vis the 2010-11 achievement, as highlighted in the Commerce Ministry’s strategy paper.

The country had registered a growth of 37.5 per cent in overseas merchandise shipments in 2010-11, which reached $246 billion against a target of $200 billion.

“If there is no continuation of DEPB (Duty Entitlement Pass Book Scheme), exports will fall to $200 billion,” the FIEO President, Mr Ramu S. Deora, said here today.

Under the DEPB, the incidence of Customs duty on import content of export products is neutralised and reimbursed to the exporters. Several key industries like engineering, including automobiles, have been the major beneficiaries of the scheme.

On concerns that the DEPB is not compliant with the World Trade Organisation (WTO) rules, the Government has announced discontinuation of the same from June 30 this year.

Exporters are opposed to the move and have been pleading with the Government that either the scheme should remain intact or be replaced by an alternative. The annual payout on this head to exporters is Rs 8,100 crore.

Mr Deora said when the Government had announced that the DEPB would discontinue from June, it assured exporters that they would benefit from the proposed Goods and Services Tax (GST).

“GST is now delayed... Either the DEPB should be extended, if not, all the products covered under it may be brought under the all-industry drawback scheme in the same rates. Government must announce it immediately, otherwise we will lose orders,” the FIEO chief said.

He said Indian exporters, if outpriced by competition, will be forced to vacate the markets nurtured by them for many years.

Expressing concern over bans and restrictions on export of certain commodities like cotton, Mr Deora said that whenever the country is faced with domestic shortages, the sensible way would be to put an export cess, rather than curbing shipments.

Published on May 10, 2011
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