The Hindu : Exim policy to focus on export incentives

Online edition of India's National Newspaper
Sunday, Mar 30, 2003

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Exim policy to focus on export incentives

By Our Special Correspondent

NEW DELHI MARCH 29. Export incentives and fine-tuning of schemes in line with the World Trade Organisation (WTO) regime are likely to be the focus of the Exim Policy 2003-4 being announced on March 31.

This is especially in light of the fact that import curbs are now minimal and the effort is to reach a target of $80 billion by 2007 from the expected level of nearly $50 billion in the current fiscal.

The fact that the exim policy is not likely to throw up any dramatic changes is evident from the suggestions being made by industry which are largely in the area of procedural simplification and restructuring of existing export schemes.

One of the most important areas in focus is the continuance of the duty entitlement passbook scheme (DEPB). But one of the apex chambers is in favour of clubbing this popular incentive with other export schemes into a single comprehensive drawback programme. The Federation of Indian Chambers of Commerce and Industry (FICCI) has suggested the advance licences, DEPB and duty-free replenishment certificate and duty drawback should be concerted into a single comprehensive scheme.

This should be equipped to neutralise all incidence of indirect taxes including various levies on power in the form of surcharge on transport, octroi and entry tax.

The Electronics and Computer Software Export promotion Council (ESC) has also urged the Government to continue with the Duty Entitlement Passbook Scheme (DEPB), to neutralise the incidence of customs duty on the import content of the products being exported. The ESC has additionally proposed that the scheme be expended since currently customs duty on fuel is not taken into account while fixing up the DEPB rates.

The ESC feels this is clearly a disadvantage to exporters who opt for this scheme.

The FICCI has made a slew of proposals on the broad policy front, urging the Government to look at agriculture as the new frontier of exports, giving a renewed thrust to service exports and aggressively pursuing national interests at the WTO.

The chamber has proposed that that the excise duty and sales tax regime for exports be simplified while the policy on fixing average export obligation needs to be reviewed.

The FICCI has also urged that special economic zones (SEZs) with world class infrastructure be put in place as quickly as possible.

The ESC has urged that a separate chapter on services exports be incorporated in the new exim policy to promote services export, particularly IT -Enabled Services (ITES). Incorporation of a new chapter on services will also help export of other kind of services such as healthcare, services and tourism.

Referring to the problems lately faced by IT professionals working abroad, the ESC has urged the Government to take up the issue with the WTO to accord special treatment to such professionals.

WTO guidelines highlight movement of skilled labour across the border with valid visas and documents.

The increasing tendency of the countries to turn "projectionist" due to political and social reasons should be checkmated by evolving suitable multilateral guidelines, it added.

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