The Director General of Foreign Trade (DGFT) has taken some steps to show that the Commerce Minister is good for his word. More steps are awaited.
When this year’s supplement to Foreign Trade Policy (FTP) was unveiled on April 11, 2008, the Commerce Minister Kamal Nath said that the Focus Products Scheme (FPS) and Focus Market Scheme (FMS) would be calibrated, so that some products of high export intensity (which were not covered under FPS) but which have low penetration in countries (which were not covered under FMS), would be considered for export incentive as a Focus Product for that country.
Now, the DGFT has issued Public Notice no. 59/2008 dated August 6, 2008, allowing 1.25 per cent duty credit against export of ten products to Tanzania, Nigeria, Kenya, Brazil and Ukraine. The list includes bicycles and their specified parts like frames, spokes, forks, wheel rims, hubs, valves and similar appliances for pipes etc. Most of these products are manufactured in and around Ludhiana.
The DGFT, RS Gujral, has also notified (Public Notice No. 60/2008 dated August 6, 2008) five more products for grant of duty credit under the FPS scheme, which include threaded nuts, screws, bolts, rods, non-threaded washers and rivets and parts of sewing machines. These dispensations follow 5 per cent extra duty credits granted under FPS to exporters of sports goods, most of them based in and around Ludhiana in Punjab.
The DGFT has also amended the Handbook of Procedures to allow clearance of capital goods, including second hand capital goods in Domestic Tariff Area (DTA) by Export Oriented Units (EoU) as per FTP on payment of applicable duty and import policy in force on date of such clearance.
He has clarified that payments received in foreign exchange or rupees against various types of specified airport services will discharge export obligation under EPCG scheme.
He has asked applicants for import of marbles to furnish copy of Chartered Accountant certified statement of accounts, filed along with balance sheet to the income tax authorities for past three years to establish their eligibility for getting licence. He has withdrawn deemed exports duty drawback benefits against supplies of high-speed diesel and furnace oil from DTA to EoU and stipulated conditions for export of onions.
Meanwhile, the Andhra Pradesh and Bombay High Courts have, in specific cases, stayed collection of customs duty on export of steel items to Special Economic Zones.
Kamal Nath has more promises to keep. He had announced an enhanced incentive under FPS @ 2.5 per cent for high value-added manufactured products, which would be notified separately. The list is awaited. The Export Promotion Council for Telecom sector is yet to be established.
He is yet to bring advance authorisation scheme and Export Promotion Capital goods (EPCG) scheme, which he said will be done by July 1, 2008. The Accredited Clients Programme for assured customs facilitation is yet to be extended to export houses.
Kamal Nath has a fairly good record of delivering on promises. The trade needs to be a bit patient because the promised measures require concurrence from the finance ministry and perhaps, it is taking time to persuade his colleague in that ministry and get the bureaucrats moving.
