TNC Rajagopalan: Major changes in Exim Policy unlikely

EXIM MATTERS

The Directorate-General of Foreign Trade (DGFT) has put up on its website 182 suggestions for amendments to the Exim Policy and Procedures and has invited feedback from exporters and importers.

Exporters and imports can now know well in advance what changes are under consideration and express their views.

The move ensures an open dialogue before the changes are effected. The policymakers can take into consideration the views if the trade at large and know before hand whether any of the contemplated measures will have any adverse effect.

Till now, only select industry associations like the Confederation of Indian Industry (CII) could have access to policymakers. Now, anyone who has anything to say can give his views to policymakers, who can now factor in these views and make a decision.

Thus, the process of decision-making is now more participative and transparent.

Commerce Minister Kamal Nath and DGFT officers deserve all appreciation for this initiative. Let us hope that the finance ministry takes a similar initiative, reduces the suspense and secrecy of the Budget making process and moderates the expectations better. Other ministries and departments too can follow the example.

Over one-third of the suggestions (68 to be precise) relate to the duty exemption/remission schemes. Some suggestions relate to removal or dilution of the "nexus" condition for advance licences, flexibility to discharge export obligation either through physical exports or deemed exports, wider coverage of the scheme to import duty-free fuel and greater delegation of powers.

Strangely, the need to have appeal against standard norms fixation decisions is missing from the list of suggestions.

There are 31 suggestions relating to the EPCG (Export Promotion Capital Goods) scheme. One of them is to dilute or remove the condition regarding maintenance of past average export performance. There are suggestions to widen the coverage of the scheme, give more flexibility and simplify documentation requirements.

Among the 34 suggestions relating to export-oriented units, the more eye-catching ones relate to grant of "virtual SEZ" status, easier "job-work" procedures and more rational method to change duty on sale in the domestic tariff area (DTA).

Deemed exporters want no discrimination between deemed exports and physical exports. On procedural and miscellaneous matters, some sensible facilitation measures are suggested. Demands to allow second-hand capital goods on the basis of residual life instead of age of the capital goods are rational enough.

There are some frivolous suggestions to let defaulters go scot-free or give them more time. There are also some contrary views.

For example, one suggestion is to allow DEPB against steel exports and the other is to not allow DEPB against steel exports. One suggestion is to define a "group company" as per the Companies Act and the other is to define it as per the competition law.

This is possibly the first time that the Exim Policy is being drafted when no one has taken charge as the DGFT.

From the suggestions under consideration, it appears that in substance, the policy will not see major changes but some facilitation measures will be there. Major changes may be announced on August 13.

tncr@sify.com