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The Foreign Trade Policy (FTP) may announce incentives of about Rs 3,000 crore, including an amnesty scheme for traders who have defaulted on their export obligation. Sectors such as engineering and textiles are likely to be the focus of the annual supplement to the FTP 2009-14, which will be unveiled on April 18.
Incentives for incremental exports over the previous year, rationalisation of the Export Promotion Capital Goods (EPCG) Scheme, extension of interest subvention, settlement of interest subsidy dues, incentives for Jammu & Kashmir and green products are also on the cards.
“There will be some major announcements involving policy decisions as well as easing of procedures… For people who have defaulted on their export obligation there can be one-time amnesty. You clear your dues in one go by a particular date and no action would be taken,” a government official said.
Keeping in view the global economic slowdown, the commerce ministry had asked for granting more time to exporters to fulfil their export obligations. In the past too, the government has relaxed the obligation for certain products. However, the finance ministry, which is now spending every penny wisely in the light of a limited fiscal space, ruled out giving further time to the defaulters.
Under export obligation traders have to export the finished products made from the inputs purchased under advanced authorisation, failing which they might be refused further licences and penal action can also be initiated according to the law. A one-time amnesty may help exporters start afresh on a clean slate.
The last annual supplement of the five-year policy (2009-2014) may also commission two new ports at Ennore and Inland Container Depot, Faridabad for import of vehicles under export promotion schemes. In FTP 2012-13 Visakhapatnam Airport was identified as a new port for the purpose of benefits under export promotion schemes.
Incentives may be announced for incremental exports. Last time, the government provided rewards to exporters for incremental exports in the quarter ending March 2013 over the corresponding quarter of the previous year. The benefit may be extended to more than one quarter in this year’s policy.
Besides, the two per cent interest subvention scheme may be extended beyond March 2013. Also, an announcement is likely to be made for clearing interest subsidy dues pending since October 2011. A provision of Rs 1,200 crore has been made in the Budget for interest subvention to exporters, but the commerce ministry is working out the actual quantum of the outstanding amount.
The last policy provided reduced duty obligation for the Northeast to 25 per cent of the normal in order to give a fillip to exports from the region. This year, it may be extended to Jammu & Kashmir. Reduced duty obligation for green products may be extended to more areas to promote development and manufacture of such products for exports. Last year, it was cut to 75 per cent of the normal obligation.
A meeting, chaired by Finance Minister P Chidambaram, was held last Sunday between commerce ministry and finance ministry officials to decide on the contours of FTP. Officials said a consensus was reached between the two ministries on most of the issues, but there were differences in a few areas, where the finance ministry found itself constrained because of a tight fiscal situation.
ON THE CARDS
* Focus on engineering and textiles sectors
* Incentives for incremental exports over the previous year
* Rationalisation of Export Promotion Capital Goods Scheme
* Extension of interest subvention, settlement of interest subsidy dues
* Incentives for Jammu & Kashmir and green products
