Fearing a slowdown in exports due to external headwinds, the government on Thursday announced a slew of measures to boost exports from the high-value engineering, pharma and chemical sectors as well as traditional textile items.
The measures, announced by commerce minister Anand Sharma at a review of the Foreign Trade Policy, will have revenue implications of Rs 800-900 crore this fiscal. Along with a two per cent interest subvention on rupee export credit to some labour intensive sectors announced by the Reserve Bank two days back, these steps will hit the exchequer by Rs 1,700 crore this fiscal.
The sops will allow exporters in these areas to get cheaper imports, depending on the value of their exports.
Stating that it was difficult to put a number on revenue implications, commerce secretary Rahul Khullar said, “In a ballpark range, excluding interest subvention, it will be Rs 800-900 crore. For interest subvention, it will be Rs 800-1,000 crore... a total of about Rs 1,700 crore.”
| NEW MEASURES |
| SPECIAL BONUS BENEFIT SCHEME: Concession on duty rates on imports to the tune of 1% of export value (freight on board) to 50 products in engineering, pharma and chemical sectors SPECIAL FOCUS MARKET SCHEME: Concession of 1% of value of freight-on-board exports for exporting to countries in South America, Africa and Confederation of Independent States SUPPORT TO APPAREL SECTOR: Apparel sector exports will get benefits to the tune of 2% of their exports to the US and EU FOCUS PRODUCT SCHEME: Concession of 2% of freight-on-board value of exports MARKET-LINKED FOCUS PRODUCT SCHEME: Scrip to the tune of 2% of freight-on-board value of exports |
Sharma said, “I have taken up the issue of extending a scheme for the import of capital goods at zero duty for exports of certain items and the status-holder incentive scheme beyond March 31, 2012 with the finance minister.”
Sharma said the finance minister was receptive to the idea and a decision could come soon. He said a committee was set up to address the issue of dollar availability for exporters. The committee comprises the secretaries of finance, commerce and financial services.
The measures annnounced on Thursday include providing scrips to the value of one per cent of the freight-on-board value of exports, which could be used while importing goods. The special bonus benefit scheme will be provided to the engineering, pharmaceutical and chemical sectors.
The scheme would come into effect from October 1 to March 31, 2012. However, commerce ministry officials believe exporters will start to benefit from November onwards. Though the scheme is for six months, officials do not rule out an extension.
Engineering goods were the success story behind good exports during the first six months of this fiscal, growing 103 per cent at more than $42 billion.
