The Union commerce ministry is adopting diverse strategies to cope with the slowing in exports and a widening trade deficit, in the wake of uncertainties in the global markets and abolition of the Duty Entitlement Passbook (DEPB) scheme.
Last week, the commerce minister chaired a meeting of his ministry’s consultative committee of MPs, when the members raised concerns on trade deficit with China, protecting the labour-intensive sectors, currency volatility (rupee-dollar fluctuations), infrastructure constraints and shortage of cheap labour for textiles,beside expediting work on the new manufacturing policy.
The ministry’s aim for a doubling of India’s exports to $500 billion by 2014 (26.7 per cent annual growth) is based on four pillars -- product strategy, market strategy, technologies/R&D and building brand image. Ambitious targets have been set for engineering, chemicals, pharmaceuticals and electronics sectors, identified as having good export growth potential and deserving attention.
The big news is the one per cent Status Holders Incentives Scrip made available for exports during 2012-13, too. This direct subsidy was been introduced as a short-term measure to help exporters but has now become an established feature. The scheme is restricted to select sectors and can be used for import of capital goods. The scrip is non-transferable.
The ministry has revised the conditions for export of meat and edible meat. In relaxation of the prohibition, 1,053.6 mt of casein and casein products manufactured on or before February 18, 2011, have been permitted to be exported. As many as 49 items eligible for the one per cent special bonus benefit under the Focus Product Scheme have been notified and a residual item, ‘Others-bulk drugs/APIs’ has been added under the New Focus Products Table.
The good news from neighbouring countries is that low-decibel diplomacy is paying off, with Pakistan trying to normalise trade relations and others looking to increase economic cooperation through the Saarc structure. The ministry is pushing ahead with negotiations of trade treaties with other developing countries, as well as with Japan and the European Union.
While these should help, sorting glitches at the operational levels is also getting some attention, with clarifications that sound inconsequential but are, in practice, helpful. For example, the directorrate general of foreign trade (DGFT) has clarified that incorporation of barcodes encoding a unique product identification code (GTIN), batch number, expiry date and unique serial number of the tertiary pack (shipper/carton) on export consignments of pharmaceuticals and drugs is mandatory for those manufactured on or after October 1. DGFT has also clarified that DEPB claims can be admitted against free shipping bills converted to DEPB shipping bills for exports between January 28, 2003, and January 15, 2004. And, that the basis for calculation of the exchange rate for composition fee to regularisw advance authorisation cases would be the rate on the date of authorisation issue.
Similar helpful measures have been announced by the Reserve Bank and the Central Board of Excise and Customs. Conscious and unrelenting efforts are required from all the agencies dealing with exporters to understand and resolve ground-level problems.
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