Mini-Exim policy today

With double-digit export growth on the horizon, the government is likely to announce a mini-Exim Policy on Wednesday with a focus on reduction of transaction costs and sops for sectors like textiles, where quotas will be phased out from January 2005.

Commerce Minister Arun Jaitley updated the Prime Minister's Office on Tuesday evening about the export scenario and the policy stance of the government.

Jaitley's presentation was followed by a Cabinet meeting. According to officials, the commerce ministry, which will notify the amendments beginning Wednesday, has decided to retain the focus on services and agricultural sectors, besides giving a further push to special economic zones.

While the details of the policy were being worked on till late in the evening, the commerce ministry is keen that the Reserve Bank of India allows lower interest rates for export credit besides making access to credit simpler.

The ministry is also planning to reduce verification of export and import consignments and introducing a credit card payment to reduce transaction costs.

The ministry is also trying to accord deemed export status to certain infrastructure sectors and companies participating in project exports.

"According to indications available from exporters, we are hopeful of meeting the 12 per cent target despite the hardening of the rupee and we will continue our focus on thrust sectors," a ministry official said.

Officials said that initiatives announced by Jaitley in his maiden Exim Policy speech last year had not really taken off with the proposed benefits for sectors like entertainment not yet off the ground.

Similarly, the scheme enabling service exporters to import goods worth 10 per cent of the of their foreign exchange earning duty free has not found many takers.

The hotel industry, which can import 5 per cent of forex earning duty free has availed of the scheme to import alcoholic beverages but the benefit has not been passed on to consumers.

Similarly, the commerce ministry's proposal to extend tax benefits to companies that invest in creation of common infrastructure in agricultural export zones has not been cleared by the revenue department.

An e-commerce initiative focusing on electronic filing of all forms with the directorate general of foreign trade will be launched on Wednesday. The directorate's electronic data interchange can be used by exporters by purchasing a card from the designated company on payment of Rs 5,000.