Worried over rising duty refund claims, which have touched over Rs 5,000 crore, engineering exporters today sought urgent intervention of the finance ministry saying that it will impact shipments.
In a letter to Finance Minister P Chidambaram, EEPC India said that complete stoppage of duty drawback payments by customs authorities from December is creating considerable problems and is impacting production schedules of exporters.
"A direct consequence of this would be on exports and employment. Total arrears for the export sector amount to more than Rs 5,000 crore," Engineering Export Promotion Council (EEPC) said in a statement.
The council's chairman Anupam Shah expressed grave concern over "complete stoppage" of duty drawbacks.
"Our member exporters are facing considerable hardships and their financial planning has been affected which is disturbing their production schedule," he said.
Engineering exports contribute maximum to the country's total shipments. In 2012-13, the sector's exports were USD 59 billion, as against the total shipment of USD 301 billion.
Federation of Indian Export Organisations (FIEO) President Rafeeque Ahmed had recently raised serious concern over the matter and requested the authorities to release the funds.
EEPC has also asked the Commerce and Industry Ministry to take up the issue of duty drawbacks with the Finance Ministry so that the exporters' liquidity crisis is resolved without further delay.
"The total dues are over Rs 5,000 crore for all sectors and engineering will be around Rs 2,000 crore. It is held up at different customs ports have created a big liquidity problem for the exporters, who are facing tough competition from China," Shah said.
The government is expecting 10 per cent growth in exports during the 2013-14 fiscal and has fixed a target of USD 325 billion from the overseas shipments.
