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Commerce Ministry upbeat on exports sustaining momentum

G. Srinivasan

NEW DELHI, Sept. 18

THE Commerce Ministry is upbeat about export growth maintaining its momentum throughout the rest of the current fiscal as there are ``positive expectations''.

Talking to Business Line informally here, the Special Secretary in the Ministry of Commerce & Industry, Mr Nripendra Misra, however, felt that ``if growth on this scale is maintained for a longer period, some of our infrastructure facilities will be unde r tremendous strain, including our ports'' to perform. He said the Government was making efforts to upgrade infrastructure facilities and also ``have the procedures in a manner that they at least within the existing capacity create greater efficiency''.

``I am confident that we can at least expand the existing infrastructure facilities by 25 per cent by bringing about procedural simplification and efficiency and no additional investment is required for this,'' Mr Misra added.

He said export growth to Europe has been around 6 to 7 per cent and there might be some appreciable spurt in textile exports this year with the release of exceptional flexibilities under the agreement with the EU.

Similar negotiations have been concluded with the US during the visit of the Prime Minister, Mr A.B. Vajpayee, he said, clarifying that the success of these talks hinged on tariff bindings which meant market access to their products into India. He said b inding tariff rates improves bilateral trade atmosphere by sending positive signals and resulting in much more clarity and certainty.

Referring to the auto policy on the anvil, he said auto policy does not confine itself only to import of second hand cars -- it pertains to foreign investment, excise duty regime, import duty and about the whole industry, as also domestic purchase progra mme and sales programme. The policy does not confine itself to passenger car but also other vehicles and cars. He said the auto policy and removal of QRs are not linked.

What was challenged in the WTO relate to ``our requirement regarding export obligation, indigenisation and the memorandum of understanding (MoU) signed between the DGFT and the automakers''. He said that after March 31, 2001 licensing requirement on SKD/ CKD in the form that it is today may go.

The broader issue relates to, he said, the plight of those who have signed the MoU and those who availed themselves of the import of SKD/CKD kits which was only an export facilitation measure. How these two sets of people would conduct themselves in the post-QR removal phase when no licensing is needed for import of CKD/SKD kits is something that is being ``addressed by the Ministry of Heavy Industry''.

He said the auto policy is talked about in a liberal sense here and what is challenged in this context relates only to passenger cars. The entire dispute relates to one particular notification of DGFT of December last. It only says that CKD/SKD is curren tly under import licensing and in order to bring about greater certainty and transparency and a scheme is being created that those who conform to laid down rules have automatic access to imports.

Asked whether the removal of QRs in April 1, 2001 would lead to surge in import of CKD/SKD kits from abroad, he said that if the Government and the Finance Ministry decided to raise the import duty within bound levels on components, they could do so.

He said for import of full cars there is no bound rate of tariff; neither was there any tariff negotiations for full cars either in the past or now, he said, adding that the technical position is that full car is unbound as of today and that means no cap is fixed on import duty on cars from abroad.