Trade policy gives sectoral push

Cess goes for all farm commodities; export obligation cut.

The annual supplement to the five-year foreign trade policy for 2004-09 has proposed the abolition of export cess on all agricultural commodities and eased the norms under the export promotion capital goods scheme.

While the diluted export obligation norms will benefit the small-scale and agriculture sectors, the scheme's coverage has been extended to the retail business.

Setting a 15 per cent increase in the export target to $92 billion for the current year, Commerce Minister Kamal Nath today announced import duty concessions to the gems and jewellery, marine, dairy and poultry sectors.

The policy proposed the setting up of an inter-state council to help state governments promote international trade and promised to modify the Target Plus scheme aimed at rewarding incremental exports.

Though the policy was silent on the new scheme to replace the Duty Entitlement Passbook Scheme, it contained several measures to liberalise existing ones like the advance licence scheme to enhance its coverage to include all categories of exporters with past performance.

The minister also announced that Prime Minister Manmohan Singh had directed that all outstanding income tax claims under the DEPB be put on hold till the issue was resolved by the Prime Minister's Economic Advisory Council.

Several other contentious issues, including service tax exemption to export oriented units and the sunset clause for phasing out tax benefits to EOUs, have also been referred to the council.

Under the modified EPCG scheme, exporters who complete 75 per cent of their export obligation in four years rather than eight years will be freed from fulfilling the balance export obligation.

Further, imports made by the agriculture sector have been allowed a lower export obligation of six times the duty saved over 12 years instead of eight years. The export obligation has also been reduced for the small-scale sector.

Norms for imports of machinery have been eased for the retail and marine sector under the EPCG scheme. The three categories of advance licence have been merged into a single category and the annual entitlement has been increased to three times the exports from two times earlier.

Similarly, duty free benefits under the Vishesh Krishi Upaj Yojana have been extended to poultry and dairy products.

The quantum of bank guarantee for units in agri export zones, established service providers and other manufacturer exporters has been reduced from 25 per cent to 15 per cent.

In keeping with the objective of reducing the transaction costs for exporters, the Directorate General of Foreign Trade has introduced a single common application form called the 'Aayat Niryat form' which reduced the documents required from 120 to 50.

Towards a $92 bn export target

Advance licence entitlements increased

EoUs can claim IT exemption within 12 months of exports

Bank guarantee reduced for units in agri export zones

No safeguard and anti-dumping duty on inputs under advance licence

"Served from India" scheme made more liberal

Inter-state trade council proposed for boosting exports