Commerce and industry minister Murasoli Maran yesterday announced that an 18 per cent export growth target in dollar terms had been fixed for 2000-2001 on the expectations of a strong growth in iron ore, textiles, chemicals and gems and jewellery exports.
Addressing a press conference to disclose the procedures of the government's new export promotion scheme, the special economic zones, Maran said: "We have tentatively fixed the export target at 18 per cent for the current year.
"We expect iron ore exports to increase by 100 per cent to $500 million, chemicals by 21 per cent, textiles by 28 per cent and gems and jewellery by 12 per cent." The main export markets will be the United States and Japan.
Maran also pointed out that the Cabinet would take a decision on 100 per cent foreign direct investments (without any sectoral cap) in SEZ units in the next two to three weeks. He also expected that initially, at least 10 such SEZs would be established.
He said the government decided to assign the SEZ areas as foreign territory for duty and tax purposes and added there would be no inspector raj in operation. He said four of the existing export processing zones in Cochin, Kandla, Mumbai and Vizag will be made SEZs in the next four weeks.
"We have also received applications from Tamil Nadu, Gujarat, Orissa, Maharashtra, Andhra Pradesh and West Bengal to set up SEZs. Orissa is willing to give 500 hectares near Paradip, Maharashtra about 1,190 hectares in Navi Mumbai, and West Bengal 8,000 hectares in Kulpi near Calcutta," he added.
Maran felt that SEZs would be able to attract higher levels of foreign direct investment and hoped that they would "create millions of jobs". "We want India to be a launching pad for all exports," he said.
The private sector could set up the SEZs on their own or in association with state governments. "The most important feature of the scheme is that the SEZ shall deemed to be a foreign territoryfor the purpose of duties and taxes. This is a significant break from the past. This is the corner stone of the re-oriented trade policy, which aims at export-led growth for the country," Maran said.
As part of the re-oriented export promotion policies, the government in the Exim policy 2000-2001 announced on to set up SEZs where there would be no restriction on foreign direct investment except for items reserved for public sector, besides, all items, even those reserved for small scale sector will be permitted to be manufactured by units in SEZ units as the entire production is to be exported in normal course. If they sell in the domestic market, they will have to pay full custom duty.
Goods supplied to SEZs from the domestic tariff area (DTA) will be treated as deemed exports and goods brought from SEZ to DTA will be treated as imported goods.
As indicated in the EXIM policy, units may be set up in SEZs for manufacture, trading, reconditioning, repair or for service activity and goods may be imported or produced from DTA, duty free for the purpose of manufacture of goods and services, production, processing, assembling, trading, repair, reconditioning, and packaging and exports. However, the duty free import facility will not be applicable to prohibited goods under the Exim policy
Sale of finished goods including by-products and services and waste/scrap/remnants/rejects in the DTA will be permitted on payment of applicable customs duty in accordance with the Exim policy in force.
While the above DTA clearance will not be available to the trading units yet those in the SEZ may be allowed to clear the imported or indigenously procured goods in the DTA without payment of duty to other SEZ/EOU/EPZ/EHTP/STP units.
